Ethos Technologies - Q4 2025

Transcript

Operator (participant)

Good day. Thank you for standing by. Welcome to the Ethos Technologies Inc. fourth quarter 2025 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd like to hand the conference over to your first speaker today, Aaron Turner, Head of Investor Relations. Please go ahead.

Aaron Turner (Head of Investor Relations)

Good afternoon, welcome everyone to Ethos Technologies fourth quarter of fiscal year 2025 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, 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 our financial outlook for the first quarter and full 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 additional carrier partnerships, 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-Looking 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 based on information available to us as of today, and 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. A 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.

Peter Colis (CEO)

Good afternoon, everyone, welcome to our fourth quarter 2025 earnings call. At Ethos, we are on a mission to protect families by democratizing access to life insurance and empowering agents at scale. I'm pleased to share that in Q4, we continued our strong execution. We delivered $110.1 million in revenue in Q4, representing a 65% year-over-year revenue growth, and achieved adjusted EBITDA of $26 million and an adjusted EBITDA margin of 23%. We activated over 54,000 new policies this quarter, bringing us to over 500,000 policies activated through Q4. We also ended the year with over 15,000 agents selling on our platform in 2025. For the full year 2025, we generated revenue of $388 million, representing growth of 52%.

This marks our third consecutive year with growth over 50%. We also generated a Rule of 40 score of 75, demonstrating our ability to balance growth and profitability. For those of you joining us for the first time, and as a refresher for others, I'd like to share an overview of how Ethos is transforming the buying, selling, and underwriting process of life insurance. Our goal at Ethos is to become the largest issuer 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. That control lets us deliver a level of speed, accessibility, and approval rates that don't 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 1 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 logic IP. developed over the previous six years. Surrounding the engine is the industry's only natively built, 100% digital and modern vertically integrated technology platform. Ethos draws tremendous strength and competitive moat from our application engine, underwriting engine, admin system, payments and commissions infrastructure, agent operating system, unified data infrastructure, and AI and ML layers.

To achieve our 98% gross margin, we have leveraged those AI and machine learning layers on top of our data infrastructure to deliver lead-level revenue predictions, better agent quality, more accurate policy recommendations, and automated fraud management that traditional carriers simply cannot replicate. Our mode is structural. Every application engine, underwriting decision, issued policy, retention event, and claim feeds back into our system. More data improves risk selection. Better risk selection strengthens carrier performance. Stronger carrier performance expands take rates, capacity, and product breadth. Simply put, our platform gets better as it gets bigger. Our advantage is a cutting-edge technology platform and years of structured underwriting data, real-time feedback loops, and deeply integrated carrier relationships trained on our unified system. A significant portion of our team are engineers and data scientists. That shows up in the model.

Revenue scales without proportional headcount growth, automation expands margins. Underwriting accuracy improves with data density. Our three-sided technology platform serves consumers, agents, and carriers alike. For consumers, Ethos transforms what can be an eight-week purchase process into as little as 10 minutes online. We've removed the friction, no invasive medical exams, no long waits, no endless coordination between multiple parties, just a seamless, tech-driven experience. For agents, we transform their workflow, allowing them to sell policies instantly and accelerate their working capital cycle. Our agent operating system transforms how agents sell life insurance and how agencies operate. By digitizing the sale, Ethos allows agents to focus on what they do best, building relationships and growing their business. Agents can control the application or send clients a link to self-serve.

Agents use Ethos to market to their consumers, nurture their pipeline, sell instantly, track incentives and rewards, automate payments, and automate agency operations. In the absence of the Ethos Agent OS, agents are stuck using multiple unintuitive legacy platforms. For carriers, we deliver scaled, incremental growth on modern technology, and we prioritize their underwriting profitability above our own. That is why these relationships are deep, long-term, and expanding. For many of our carriers, Ethos is their single largest source of new life premiums. We are proud of the six carriers we work with today. We've intentionally focused our carrier network, which allows Ethos to form stronger relationships with each carrier. For Ethos, this translates into better pricing, prioritization on the carrier's IT roadmap, and faster product development.

Historically, we've introduced three to four new products a year. In Q4, we brought two new products to market with two new carriers. Our Accumulation Indexed Universal Life product with North American Sammons targets consumers who are looking for protection as well as investment features in their life insurance products. We also launched a supplementary health product with Aflac that allows us to provide additional coverage, like cancer insurance. We believe these products open up new revenue streams and expand our addressable market, strengthening the ecosystem that fuels our growth. Looking ahead, we see three durable growth vectors. First, growing our ecosystem by bringing more consumers into our direct channel and recruiting more agents to the platform. Second, enhancing our platform by making agents more productive and increasing our share of their sales. Third, expanding our product portfolio to broaden our addressable market.

Ethos is a business that gets better as it gets bigger. All three constituents on our platform benefit from our scale and extensible nature, delivering great network effects. Every new client improves our risk models, client and agent experience, and marketing machine learning models' efficiency. Better risk models improve pricing and unit economics for our clients, our carrier partners, and Ethos. More scale and underwriting experience allow us to grow our product portfolio and carrier panel, delivering more value to clients and agents. A broader product portfolio both 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 both the consumer and agent journeys. While the legacy industry is hindered by on-prem technology and manual processes, our end-to-end digital platform fuels a virtuous data cycle that is spinning faster and faster.

As an example, in 2023, it typically took around three weeks to reach statistically significant results in our product development and marketing experiments. As of January 2026, it takes us as few as three days. This dramatically increases our testing velocity, allowing us to run more experiments in parallel, iterate faster, and bring successful innovations to market with greater speed and confidence. This quarter's results prove that our three-sided technology platform has strong product market fit with consumers, agents, and carriers alike. With that, I will pass it to Chris for a review of our fourth quarter 2025 financial results.

Chris Capozzi (CFO)

Thanks, Peter. Good afternoon, everyone. To begin, I'll review the highlights of our fourth quarter results. I'll outline our expectations for the first quarter and the full year 2026, before opening up to your questions. We concluded the fourth quarter with consistent execution across several key strategic priorities. Our financial results demonstrate both strong top-line momentum across our direct consumer and third-party channels and the earnings power of our platform. Before reviewing the details of our results, I'd like to remind everyone that some of the financial measures and metrics that I'll 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 fourth quarter, we delivered $110.1 million in revenue, representing a 65% increase from the same period last year. In our direct channel, fourth quarter revenue increased to $74.2 million, representing 93% year-over-year growth. This performance was fueled by optimized advertising spend and innovation up and down our vertical stack. By refining everything from the initial user experience to our core underwriting algorithms, we've driven meaningful compounding improvements in our conversion rates. In our third-party channel, fourth quarter revenue was $35.9 million, representing a 27% increase over the same quarter last year. This growth was driven by an increase in both active agents and revenue per agent. Moving to our non-financial metrics, we activated 54,714 policies in the fourth quarter, representing 42% year-over-year growth.

The average revenue per policy was $2,012. The fourth quarter was also strong from an efficiency perspective. We recorded a contribution profit of $47.2 million, representing a 43% contribution margin. As a reminder, we define contribution profit as gross profit, less sales and marketing expenses. This includes agent payments and underwriting costs for non-activated policies, but excludes non-cash, stock-based compensation, and allocated overhead. We continue to maintain a two-month payback on variable costs while prioritizing growth of contribution profit dollars. By diversifying our product portfolio to reach historically underserved segments, we're maximizing the yield on every dollar of marketing spend and leveraging the fixed investments in our technology stack. Fourth quarter adjusted EBITDA was $25.8 million, representing a margin of 23%. This quarter's performance reflects our commitment to balancing growth and operational efficiency.

We remain focused on disciplined spending and strategic investments in both of our go-to-market channels. As of December 31st, 2025, our cash equivalents, and investments totaled $157.4 million, and we ended the year with a commission receivable balance of $290 million, which we expect will convert to cash over the coming years. I'll walk you through our expectations for the first quarter and full fiscal year 2026. For the first quarter of 2026, we expect total revenue in the range of $144 million-$146 million. At the midpoint, this represents 53% year-over-year growth. We also expect adjusted EBITDA in the range of $30 million-$32 million.

For the full year 2026, we expect total revenue in the range of $510 million-$514 million. At the midpoint, this represents 32% year-over-year growth. We also expect adjusted EBITDA in the range of $99 million-$103 million. In 2026, we're focused on driving sustainable growth by further diversifying our revenue sources, specifically through the continued ramp of our new product lines and the strategic expansion of our third party and direct-to-consumer channels. By deepening our brand recognition and leveraging the inherent efficiencies of the Ethos platform, we are well positioned to capture significant market opportunity while meeting our profitability targets. With that, I'll turn the call over to the operator to begin the Q&A session. Operator?

Operator (participant)

Thank you. At this time, we'll conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Eric Sheridan of Goldman Sachs. Your line is now open.

Eric Sheridan (Managing Director)

Thanks so much for taking the questions, and thanks for all the details in the prepared remarks. Maybe two, if I can. First, Peter, what do you see as the biggest strategic priorities for the company when you think about the way you've laid out the potential for revenue growth in 2026, that you're most focused on executing against to deliver against that top-line performance? Maybe a second question would be: As you continue to scale the platform, what is the landscape like in terms of deploying marketing dollars and earning a stable to rising return on marketing dollars as a growth stimulant for the business? Thanks so much.

Peter Colis (CEO)

Thanks for the question, Eric. We're glad to be here. We're excited to be on this first earnings call with you all. First, let's talk about our priorities for 2026. I'll talk about our kind of business as usual priorities, and then AI as well. Business as usual priorities, we have three very durable vectors for growth. The first is recruit more clients to the platform and recruit more agents to the platform. The second is make agents more productive through optimizations to the agent operating system. The third is to broaden our product portfolio and enhance the value that we are delivering on a per product basis.

When you look at our results over the past year, and when we think about the guidance that we've provided going forward, all three of those vectors are really firing with full cylinders. You know, we're excited to just continue executing and doing a great job across all of those. The second is really, you know, taking advantage and implementing AI across every vector of the company, whether it's... And which we have been doing for the past year. Whether it's accelerating engineering, analytics, marketing, client service, agent service, fraud management models, agent quality, automating operations, internal tooling, and more. You know, this has really been a key driver behind our 98% gross margins and our client satisfaction ratings, if you look at our NPS of over 70, you know, for the past year.

We think there's a lot more opportunity to continue harnessing the power of AI and improve. Second, as far as the landscape of, you know, efficient marketing dollar spend, if you look at this past year, and if you look at our results in Q4, you know, I really think it's, you know, an illustration where we were able to grow our direct business in Q4 at really an eye-popping rate with consistent year-over-year direct-to-consumer unit economics. That's really the virtuous data cycle spinning at full speed, where we are a business that gets better as we get bigger. Our machine learning models that power our marketing become more intelligent. We're able to run more user experience optimization tests that improve the conversion rates and efficiency.

We are able to approve more people at better prices as we get better at risk management with underwriting. We're able to negotiate better take rates or better client pricing. We're able to become more efficient at administrating clients and post-purchase. Really, the machine is getting more intelligent and more efficient as it gets bigger. The second component of that is really, we have a diverse, you know, panel of marketing channels where we're not overly reliant on any one given channel. You know, the majority of our spend is in upper funnel channels, where the user is not looking for life insurance, like television, social media, radio, et cetera. That's great because those channels are really scalable at the right unit economics for us.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Ross Sandler, Barclays. Your line is now open.

Ross Sandler (Managing Director and Senior Internet Research Analyst)

Great. Peter, I was just curious, the market seems very jittery around the AI topic, not as it relates to how you guys might be using it internally, but more how consumers, you know, use agentic AI for research or prospecting, in the process of buying various types of insurance, including life insurance. I was just curious, like, how are you guys thinking about the opportunity as it relates to, partnering or integrating with, you know, third-party agentic AI services? Or, you know, how you see this playing out as it relates to, you know, the purchase funnel for buying life insurance in general? Thanks a lot.

Peter Colis (CEO)

Yeah, thanks for Ross. It's a great question. AI is a huge opportunity for us to further accelerate both our growth and our profitability as a company. You know, we have been and will continue to be, I think, uniquely positioned to harness the advancing powers of AI, really across all the dimensions of the business that I spoke to earlier, while doing so, you know, operating in a highly regulated industry. If you just take a step back before we talk to the specifics of consumer behavior and online shopping, carriers rely on really, you know, the incumbent carrier, set really relies on a disjointed mix of on-premise and vendor-managed systems built on top of a fragmented data infrastructure, which is oftentimes filled with low quality, you know, and conflicting data.

Conversely, because we have a native end-to-end technology platform with a cutting-edge data infrastructure, it's really enabled us to embed AI and ML across the entire business. I think there's a lot more opportunity to continue harnessing the power of AI to improve. If you think about, you know, sales and marketing specifically, which consists for us of advertising spend and agent commissions, it's our largest expense. If AI reduces the cost of distribution or changes the medium in which life insurance is bought, as the leading D2C provider in the category, these shifts in consumer behavior should uniquely be an accelerant to our growth and our margin expansion. I would say that our advantage isn't really, you know, just access to AI tools, which are widely available.

It's really a native platform, years of structured underwriting data, real-time feedback loops, and deeply integrated carrier relationships that are trained into a unified system. Our mode is structural, I would say. Every application engine, underwriting engine, issued policy, retention event, and claim feeds back into our system, and it makes our AI and ML models more intelligent and more efficient. Like, simply put, our machine gets better as it gets bigger. We have specific initiatives related to GEO, where we are maximizing that opportunity as a source of user acquisition and further, building our brand as consumers use, you know, LLMs for research.

We are actively focused on integrating with these LLMs in the manner that you described, where I think, you know, we are most uniquely and best able to do that, given our incredible, you know, native technology platform, so.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Colin Sebastian of Baird. Your line is now open.

Colin Sebastian (Managing Director and Senior Research Analyst of Internet and Digital Media)

Oh, great. Good afternoon, and thanks for taking my question. I guess I'm curious, as you move into some of the more adjacent products, what you launched in Q4, as well as what's in the pipeline, curious how much is embedded in the outlook from those new products, maybe how quickly they're ramping? The additional investment necessary to, you know, from both the perspective of customer acquisition as well as back-end, data, the data platform and the integrations there, how much is required incrementally as you sort of roll out those additional products? That would be helpful. Thank you.

Peter Colis (CEO)

That's a great question, Colin. Thanks for it. I'll first talk about our guidance, then I'll talk about the specific products. You know, just important to understand our guidance philosophy. We ascribe very little revenue in our forecasting to newer or less proven products. We really take a wait and see approach. It's early days for both of the products that we launched in Q4. As a reminder, we launched a new Accumulation Indexed Universal Life insurance product, and we launched a cancer insurance product. We are seeing healthy agent adoption of our Accumulation IUL product. That is a permanent life insurance product with a compelling investment feature performance and the same incredible Ethos 10-minute purchase process. We're encouraged. It's early days, but we're excited for it to continue growing and compounding.

Our cancer insurance product, it's really early innings of testing and iteration, so I think it's too early to make a judgment call on its potential. While cancer insurance is not typically sold outside the workplace in the U.S., we think it's a compelling value proposition given the rate of cancer diagnosis. You know, if you look at our track record historically, we tend to launch around three to four new products per year. Our teams are actively working on, you know, new products with more in the pipeline. As far as the incremental investment needed, when we launch a new product, launching a new product can take anywhere from four months to, you know, up to a year for the more complicated ones.

It's really a company-wide effort across not only building that new product, but integrating it with our distribution systems, with all of our analytics and our infrastructure. There is incremental cost to launch each new product. It's not massive, it's more the time and effort to do it right, and, you know, set up these deep integrations and build the relationships with our carrier partners, so.

Colin Sebastian (Managing Director and Senior Research Analyst of Internet and Digital Media)

Thank you.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Ron Josey of Citi. Your line is now open.

Ron Josey (Managing Director)

Great. Thanks for taking the question. Peter, I wanted to better understand the 93% growth in D2C revenue from this past quarter. I know we talked about sales and marketing and advertising and ability to really target, but specifically would love your thoughts on just what changes were made to the product or the application path that drove that, and any insights on conversion rates because of these changes. Question number one is on the 93% growth in D2C and product changes that might be driving greater conversion rates. You know, I think the second durable vector you mentioned, make agents more productive, optimized through the Agent OS. We now have 15,000 agents on the platform. I think that's a notable step up from the last disclosure.

Just talk to us about the drivers that's attracting more agents to the platform here. Thank you.

Peter Colis (CEO)

That's a great question. Thank you so much, Ron. On the first topic, it really wasn't any one change to the platform that drove that exceptional direct growth. It was really the vertically integrated, you know, up and down the cycle, seeing gains. We saw gains in efficiency of our marketing models. As they've gotten larger, they've gotten more intelligent. We saw a number of, you know, user experiment improvements, which are leading to, you know, more people buying life insurance. We saw gains in underwriting, being able to approve more people at better prices. It's really up and down the vertically integrated stack.

I think when you think about our direct business in comparison to a lot of other direct businesses, we benefit from having a very, a very deep stack of real estate on which to optimize. There's, you know. We've been able to really consistently improve our unit economics, and we expect to be able to going forward, which allows us to then go and increase our marketing spend, you know, across a myriad of channels. If you look at, you know, year-over-year, we've increased marketing spend really across the portfolio of marketing channels, both our upper funnel channels, where people are not looking for life insurance, as well as bottom-of-funnel channels, where people are looking for life insurance.

Within our category, we're really winning in both of those, in both of those parts of the advertising market. Drivers of agent growth to the platform, it's really a combination of adding new agencies and growth of our more tenured agency partners. If you think about our agency business, it's a highly recurring model where we benefit not only from the new agencies, but the more tenured partners on the platform, right? When we add a new partner, they roll Ethos out to their existing agents, and then those agents repeatedly sell policies, and that agency is constantly recruiting more new agents onto the platform at no incremental cost to us.

Ethos can make those agents more productive through enhancements to our operating system, and then ultimately, we attempt to grow our share of that agency's sales by broadening and enhancing our product portfolio. If you look at this past year's results, we saw excellent growth both in the more tenured cohort of agencies as well as productive new agencies who are joining the platform.

Operator (participant)

Great. Thank you, Peter. Thank you. One moment for our next question. Our next question comes on the line of Lee Horowitz of Deutsche Bank. Your line is now open.

Lee Horowitz (Co-Head of Internet Equity Research)

Great, thanks for taking the questions. You mentioned sort of impressive unit economic stability in the quarter, despite the really fast growth in the B2C business. I guess, can you expand upon that and how you're looking at perhaps unit economics on a go-forward basis? Why is this maybe not the right time to lean into growth given sort of the competitive landscape that you're playing against as the, you know, only scale digital player left in the market? Secondly, you know, there's certainly some opportunities to expand the monetization of the platform over the longer term into perhaps some more traditional recurring revenue streams. How are you thinking about that opportunity set and where that may fit in sort of your list of many priorities as you grow your business?

Peter Colis (CEO)

It's a great question, Lee. Thanks for asking it. I'll start on how we think about the right balance between growth and profitability in our direct business. If you take a step back, really the standard that we hold ourselves to is whether or not we're selling through our direct business or our third-party business, and whether or not we're selling a term or a whole life or an Indexed Universal Life product, we really attempt to be cash profitable by month two of the policy's life cycle, right? We have a very efficient working capital cycle, and we build up a contribution margin over that life of the policy. You know, we take that in, we think about that as a constraint to the growth model.

In all direct businesses, unit economics are the governor. We're looking at how efficiently can we grow at, you know, the standard of unit economics that we want to achieve. That's how I would think about just generally, you know, the rate at which we grow our advertising spend. Remember, we're constantly improving our platform, improving unit economics, which then allows us to increase advertising spend or bench higher unit economic, you know, gains. As far as our revenue model, we don't have any near-term plans to change it.

We're really focused on becoming the largest issuer of life insurance, and it's an incredibly important market, where we have a unique opportunity and advantage, by virtue of having built this modern digital, you know, machine that is vertically integrated, that is a three-sided platform, delivering incredible value proposition to clients, agents, and carriers. We're accumulating great momentum and advantage in this market, and that's really our focus going forward at this point.

Operator (participant)

Thank you. One moment for our next question. Our next question comes on the line of Michael McGovern of Bank of America. Your line is now open.

Michael McGovern (Senior Financial Advisor and VP)

Hey, thanks for taking my questions. I have two. First, could you speak to your carrier relationship dynamics underpinning guidance for the full year of 2026? You know, like, for example, do you have any multiyear contracts that might be coming up, and there's any assumptions around the negotiations or anything on that front? Secondly, could you speak to kind of the relative strength in your revenue growth guidance in Q1 relative to the full year? You know, are there any assumptions throughout the second half of the year that change relative to Q1? Thank you.

Peter Colis (CEO)

Hey, Mike, thank you for the question. Our carrier partner contracts are typically evergreen. I wouldn't think about any, you know, material upcoming negotiations that are influential in our guidance. You know, if you think about our existing panel of carrier partners, there's much more demand and capacity for Ethos premiums than there is supply of Ethos premiums today. Now, we don't want a panel of 30 off-the-shelf carrier products. We've intentionally built a focused panel of carriers, where we really work to co-develop custom proprietary products with deep technical and operational integrations from the carriers into our unified platform.

Importantly, scale with our partners provides Ethos the necessary position in negotiating the economics we have today. That scale in the relationship puts our priorities at the front of the carrier's IT and operational roadmaps, where we often have to dislodge some other important work on their roadmap related to maintaining a legacy system or some other initiative they have. When the 10-K flips in the near future, you'll see our carrier concentration disclosure decline by around 10 percentage point within our existing six partners. We've built a considerable amount of redundancy into our business among our 10 products in the portfolio, given that we have multiple products in multiple categories.

It's also important to remember that in our contracts, we typically have an extended notice of cancellation period that lasts well beyond the time that's required for us to build a new product with a new carrier. We expect to continue building more products with more partners in the future, and we're very happy with our existing panel of carriers.

Chris Capozzi (CFO)

Mike, in terms of the revenue guidance, you know, the Q1 guidance reflects very strong operational momentum that we've carried into 2026. The new policy activations in January were strong. February is pacing ahead of internal targets. I think, you know, when we look beyond Q1, we continue to be very encouraged by the momentum of growth in the direct channel, as Peter noted, the contributions that we're starting to see from new agencies that we brought onto the platform in 2026, that are help fueling revenue growth. I'm sorry, we brought onto the platform in 2025. They're helping fuel revenue growth here in 2026. I think you're seeing some of that confidence flow through these gains in the full year revenue guidance that we shared with you.

You know, other things to think about just as you model revenue throughout the year, you know, as we've noted in the past, our business does exhibit seasonality with Q1 and Q4 being our strongest quarters from a seasonal perspective, and then Q2 and Q3 seeing much less seasonal effects. In terms of, you know, revenue mix, you'll tend to see the direct business index up here in the first quarter. You kind of think of it as like a 75%, 25% split, and then for the year, probably takes on a profile along the lines of a two thirds, one thirds mix, again, weighted towards direct. But, you know, very consistent. I think what you've seen in terms of our historic performance, it really is what informs our 2026 guidance.

Michael McGovern (Senior Financial Advisor and VP)

Great. Thank you.

Operator (participant)

Thank you. One moment for our next question. Again, as a reminder, to ask a question, you'll need to press star one one on your telephone. Our next question comes from the line of Pablo Singzon of JPMorgan. Your line is now open.

Pablo Singzon (Executive Director)

Hi, good afternoon. First question, DTC sales have historically been a minor portion of overall industry sales in life insurance. The question is, what is your longer view of the opportunity here, and are there differences of note between the customers you cater to in DTC versus the customers that legacy DTC providers have historically served? That's question one, and then question two is about your agency strategy, right? Can you just talk about your strategy for adding agency partners? On the carrier side, it sounds like your approach is to target category leaders for specific verticals, which makes sense if you think about the growth impact you wanna deliver. On the agency side, I'd be interested to hear about your thought process for selecting which agencies to partner with. Thank you.

Peter Colis (CEO)

Hi, Pablo. Thanks for the great questions. On the first question about generally, what is our long-term view for direct? I think that before Ethos, you know, direct was very difficult to do, and our innovations really up and down the entire stack, by building a completely native technology platform, by innovating and being able to accelerate underwriting, by bringing elite level, you know, tech execution, and go-to-market execution, really has made it possible. Ethos is really the first, you know, demonstration of scaled, profitable unit economics in this category. I think that if you fast forward the future, this market could take a similar dynamic to where the auto market, you know, the auto insurance market, you know, went through over the last couple of decades.

Where you had a purely agent-dominated, high, you know, high transactional, you know, friction-heavy process, and a company like GEICO or Progressive was able to make it simple and easy and online. Over time, you know, direct went from a, you know, an insignificant part of the market to, you know, roughly half or a bit more than half of the market. I really think that Ethos, you know, has the potential to deliver the same kind of transformation of the life insurance market. I think part of it, a large part of it, is also going to be incremental to the existing market today.

You know, one of the things we love about the life insurance business is it's highly reoccurring in that every year, around 10 million Americans are gonna buy life insurance, whether or not Ethos exists, right? They're pushed into that purchase journey by virtuous of having, you know, new children, getting married, taking out a mortgage or debt, having health scares, watching their parents age. Ethos is really the most efficient way for those families to get protected and are also the most efficient way for agents to sell. you know, we're excited to continue capturing both that large reoccurring demand. we're also excited to protect families that wouldn't otherwise have gotten protected that year.

Because we make it so simple and easy and efficient, they're able to take a step that they, that they otherwise wouldn't have taken through a more traditional, high-friction experience. As far as how we go about, you know, bringing agencies onto a platform, we try to be really thoughtful about which ones are going to be successful and appreciate our incredible value proposition for agents, which is a, you know, very fast transactional velocity, right? The ability to sell a policy in 10 minutes instead of taking, you know, weeks to sell a policy, that frees up so much time and space for them to go prospect for clients and convince them to buy instead of case managing people through a bureaucratic process.

We are paying agents very quickly as well, which allows them to reinvest those commissions into prospecting and lead buying to go find more clients. We look for agents that really have a match with our transactional velocity, that have a match for the products that we have in our portfolio. The agent onboarding process, it's a fairly organic process, I would say, where it's typically an agency-to-agency or agent-to-agent referral, where someone says, "Hey, I've had a great experience with Ethos. I launched them in the past year, and they now account for X% of my sales, and the agents really love it." We're excited for that organic agency onboarding process to continue, you know, evolving.

The other thing I would say is that if you look at the latest Indexed Universal Life product that we launched with a carrier partner, it's a first unique distribution model for Ethos, where it's a combined effort between the carrier's distribution team and Ethos's distribution team of bringing it to market. How we'll benefit from that is, you know, it will accelerate agents coming into the platform that carrier might have relationships with that we previously have not served. Those agents are going to come into the agent platform, and we're going to do a great job serving them into that new Accumulation Indexed Universal Life product, so.

Pablo Singzon (Executive Director)

Thanks, Peter.

Operator (participant)

Thank you. I'm showing no further questions at this time. I'll now turn it back to Aaron Turner for closing remarks.

Aaron Turner (Head of Investor Relations)

Great. Thank you all for joining us today on our first call as a public company. We'll speak with you all again next quarter.

Operator (participant)

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