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

Key Points

• Strong growth continued: Second-quarter revenue rose 113% year over year to $189.6 million, driven by 131% growth in direct-channel revenue and 90% growth in third-party channels. Ethos activated 107,847 policies and generated $35.2 million in adjusted EBITDA.
• Full-year outlook raised: Ethos now expects fiscal 2026 revenue of $727 million to $731 million and adjusted EBITDA of $119 million to $123 million, while forecasting third-quarter revenue of $160 million to $164 million.
• Capital allocation and expansion: The board authorized up to $100 million in share repurchases. Ethos also expanded its IUL product to juvenile policies and began investing in direct-to-consumer annuities as a longer-term growth opportunity.

Ethos Technologies Inc. Class A Common Stock NASDAQ: LIFE reported second-quarter fiscal 2026 revenue of $189.6 million, up 113% from a year earlier, as growth accelerated across its direct-to-consumer and third-party agency channels. The company also raised its full-year revenue and adjusted EBITDA outlook and authorized a share repurchase program of up to $100 million.

CEO Peter Colis called the quarter “another exceptional one,” noting that Ethos generated $35.2 million in adjusted EBITDA and a Rule of 40 score of 132, based on 113% revenue growth and a 19% adjusted EBITDA margin. The company activated 107,847 policies during the quarter, surpassing 700,000 cumulative activated policies.

Direct and Agency Channels Drive Growth

Ethos said direct-channel revenue reached $116.5 million in the second quarter, an increase of 131% year over year. Third-party channel revenue rose 90% to $73.1 million, marking the second consecutive quarter of accelerating growth in that business after year-over-year growth of 27% in the fourth quarter and 42% in the first quarter.

Colis attributed direct-channel momentum to increased experimentation in marketing, product design and underwriting, supported by a growing volume of customer data. He said the company’s vertically integrated platform covers the consumer journey from marketing and applications through underwriting, policy issuance, administration and servicing.

The company’s automated underwriting engine processes hundreds of thousands of data points per application and applies more than 1 million rules of logic and more than 800 adaptive questions, according to Colis. He said Ethos has a 95% instant-decisioning rate, while certain automated decisions are audited internally and by carrier partners.

In the third-party business, management said growth came from both new and existing agencies, more agents using the platform, and improved agent productivity and conversion rates. Colis said the company has a “robust pipeline” of agencies in onboarding and that its recruitment costs for agents and agencies are in the low single-digit percentage range of third-party revenue.

Ethos’ average revenue per policy was $1,758, down sequentially due to a greater mix of whole-life policies, which are becoming a larger part of the third-party channel’s sales mix, CFO Chris Capozzi said.

Margins, Cash Flow and Capital Allocation

Second-quarter contribution profit rose 66% year over year to $62.3 million, representing a 33% contribution margin. Capozzi said the margin rate was affected by a higher mix of third-party revenue, where unit economics are “skinnier” than in the direct business. However, he emphasized that each activated policy is independently profitable and variable cash-flow positive within 60 days of activation.

Management said it is prioritizing growth in absolute contribution profit and adjusted EBITDA dollars rather than targeting a specific contribution-margin percentage.

Cash flow from operating activities totaled $35.7 million in the quarter. Capozzi said results included an $8 million timing benefit tied to a settlement with a carrier partner that is expected to reverse in the third quarter. Excluding that item, he said cash-flow performance was largely organic and tied to operations.

As of June 30, Ethos had $252.9 million in cash equivalents and investments. Commission receivables were $381.5 million, up 11% sequentially and 51% from the prior year. The balance reflects estimated future cash flows already earned but not yet received, according to the company.

Given its balance sheet and cash-generation outlook, Ethos’ board authorized a repurchase program of up to $100 million of Class A common stock. The company said it intends to deploy the authorization opportunistically when it believes its market price does not reflect the underlying value of the business. Ethos expects to adopt a Rule 10b5-1 trading plan after filing its quarterly report.

Products and Growth Initiatives

Ethos expanded its Accumulation IUL product with North American Sammons to include children, marking the first time the company has supported juvenile policies. Colis said the capability had been one of the most common requests from its distribution network.

The company also began investing in a direct-to-consumer annuities opportunity, including efforts to optimize the customer experience, expand its sales team and add carrier partners. Management said annuities are not expected to contribute materially to fiscal 2026 results, though it views the category as a significant longer-term opportunity.

Colis also discussed the potential impact of artificial intelligence and agentic commerce on life-insurance distribution. He said Ethos’ digital infrastructure could position it to benefit from AI-driven consumer demand, though the company has not yet seen meaningful changes in client acquisition from large language model-driven distribution.

“It’s still early days for the LLM-driven insurance distribution,” Colis said, adding that life-insurance purchasing involves identity verification, adaptive questioning and third-party underwriting data that may limit the extent to which the full transaction shifts into a chat-based experience.

Raised 2026 Outlook

For the third quarter, Ethos expects revenue of $160 million to $164 million, representing 73% year-over-year growth at the midpoint. It expects adjusted EBITDA of $23 million to $25 million.

For full-year fiscal 2026, the company raised its revenue outlook to $727 million to $731 million, implying 88% growth at the midpoint. It also raised projected adjusted EBITDA to $119 million to $123 million.

Capozzi said the updated outlook reflects sustained top-line acceleration, a higher revenue mix from the third-party channel and strategic growth investments. While the third-party mix is expected to weigh on margins relative to the direct channel, management said it believes the business can continue expanding while maintaining profitability.

About Ethos Technologies Inc. Class A Common Stock (NASDAQ:LIFE)

Ethos Technologies Inc operates a technology-driven, direct-to-consumer platform for the distribution of life insurance products. Through its digital underwriting, data analytics, and proprietary technology, it enables consumers to explore, compare, and purchase life insurance policies online. The platform serves consumers, agents, and insurance carriers, and supports the application and policy issuance process through an online interface. The company works with insurance carriers to offer life insurance products in the United States through digital channels and independent agents.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.