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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____to____

Commission File Number: 001-43065

Ethos Technologies Inc.

(Exact name of Registrant as specified in its Charter)


Delaware	81-3181024
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

90 New Montgomery Street, Suite 1500

San Francisco, CA 94105

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (415) 915-0665

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value	LIFE	Nasdaq Global Select Market

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	☒	Smaller reporting company	o
		Emerging growth company	☒


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ☒

As of April 30, 2026, Ethos Technologies Inc. had 30,914,997 shares of Class A common stock outstanding, and 32,079,265 shares of Class B common stock outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	5

Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	6
	Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION	36

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults Upon Senior Securities	70
Item 4.	Mine Safety Disclosures	70
Item 5.	Other Information	70
Item 6.	Exhibits	71
Signatures		73

Table of Contents

GLOSSARY OF TERMS

We provide this glossary to help those reading this Quarterly Report on Form 10-Q ("Quarterly Report") understand the industry and other technical terms that are used in this Form. For many of these terms, there is no generally accepted definition; in this glossary, we present our definition of such terms as used in this Quarterly Report.

•

Activated Policy: An insurance policy that was sold through our platform. Activated policies include insurance policies issued and sold to consumers who come to our platform directly as well as those sourced through third-party channels. The number of activated policies does not include any Wills & Estate Planning products.

•

Active Carriers: Carriers that issued at least one policy through our platform within the last 12 months and were continuing to offer products through our platform as of the reporting period of this form.

•

Active Selling Agents: Agents who have activated a policy through our platform within the last 12 months.

•

Agencies: Independent insurance agencies that are not owned or operated by us but use our platform to sell insurance products. These agencies employ, or contract with, agents who engage with consumers and submit applications through our platform.

•

Agent Payments: Amounts paid by us to agents or agencies in connection with both policy sales and sale referrals made by such agents, or in the case of payments made to agencies, their affiliated agents, on our platform. We also refer to these amounts as agent compensation.

•

Agents: Individuals licensed to sell insurance policies in the relevant jurisdiction, whether captive, independent, or affiliated with agencies, including those who sell insurance and related products through our platform.

•

Carrier: A licensed insurance company.

•

Commissions: The compensation paid by a carrier to us for an activated policy. Commissions are based on the annual premium of an activated policy and are typically paid throughout the life of the policy. The majority of a policy’s lifetime commissions are paid in the first year following activation.

•

Commission Rates: The percentage of the policy premium in each policy year paid to us as commission. Commission rates are contractually defined with carriers and reviewed on an annual basis.

•

Consumers: Individuals who apply for and purchase insurance and related products on our platform, either directly, or through our third-party channel.

•

Persistency: The term “persistency” refers to how long activated policies remain active throughout their terms. Observed persistency for policies of a particular product type changes over time as activated policies are terminated prior to the end of their terms.

•

Persistency Estimate: The term persistency estimate refers to a percentage estimating the likelihood that a currently activated policy will remain active throughout the policy’s term. We derive the persistency estimate for a policy using our observed persistency data applicable to that policy as well as relevant industry persistency data. We apply the persistency estimate for an activated policy when recognizing revenue from that policy, and we regularly review, and update as needed, persistency estimates as observed persistency applicable to that policy changes over time.

•

Third-Party Channel: Our external distribution network, which is composed of independent insurance agencies, their affiliated licensed agents, independent agents, third-party fintech companies, and other third parties that refer consumers to, or enable the sale of, insurance products through our platform.

•

Underwriting Costs: The costs incurred throughout the underwriting process for both activated and non-activated policies, including costs associated with obtaining third-party evidences (such as prescription history, credit-based insurance scores and motor vehicle records), and, separately, costs related to post-issue audits.

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future financial condition or results of operations, business strategy and plans, and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” “would,” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•

our expectations regarding the premiums set by carriers and commission rates negotiated with carriers;

•

the growth rate of the market in which we compete;

•

our business plan and our ability to effectively manage our growth and associated investments;

•

anticipated trends, growth rates, and challenges in our business, our industry, and in the markets in which we operate;

•

our ability to continue to grow across our current markets and expand into new markets;

•

our ability to sustain or improve our profitability;

•

future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;

•

effectiveness of our brand awareness and marketing efforts;

•

our beliefs and objectives for future operations and growth initiatives and ability to predict future results;

•

our ability to increase the number of activated policies on our platform;

•

our ability to maintain our relationships with agency counterparties and to develop relationships with new agencies and increase agent engagement on our platform;

•

our ability to maintain and expand our relationships with carriers, and to diversify the carriers with whom we work;

•

our ability and expectations to continue to innovate and enhance our platform and product offerings, and to keep pace with technological developments;

•

our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel;

•

our ability to obtain, maintain, protect, and enforce our intellectual property rights and any costs associated therewith;

•

our ability to successfully defend disputes, legal proceedings and governmental inquiries brought against us;

•

our ability to operate our business during fluctuations or an overall decline in economic activity, or any adverse trends in the life insurance industry;

•

our ability to compete effectively with existing competitors and new market entrants;

•

our ability to comply or remain in compliance with laws and regulations that currently apply or become applicable to our business;

•

potential volatility in our stock price and a possible decline in the value of our Class A common stock;

•

the other factors discussed under “Risk Factors”; and

•

other factors beyond our control.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report.

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You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ETHOS TECHNOLOGIES INC.

Condensed Consolidated Balance Sheets

(In Thousands, Except Per Share Data)


	March 31,			December 31,
	2026			2025
Assets
Current assets:
Cash and cash equivalents	$	107,909		$	91,091
Short-term investments		36,692			34,876
Accounts receivable, net		53,337			36,498
Commissions receivable-current, net		26,382			28,786
Prepaid and other current assets		35,032			54,553
Total current assets		259,352			245,804
Long-term assets:
Commissions receivable, net		265,021			224,219
Property and equipment, net		10,288			8,189
Operating lease right-of-use assets		1,892			2,183
Goodwill		2,238			2,238
Acquired intangible assets, net of amortization		637			662
Long-term investments		79,203			31,468
Other long-term assets		733			574
Total long-term assets		360,012			269,533
Total assets	$	619,364		$	515,337
Liabilities, redeemable preferred stock and stockholders’ equity
Current liabilities:
Accounts payable	$	65,908		$	55,070
Accrued expenses		53,026			39,224
Liabilities related to sale of commissions receivable-current		10,724			11,750
Operating lease liabilities-current		1,129			1,125
Other current liabilities		24,170			6,021
Total current liabilities		154,957			113,190
Long-term liabilities:
Liabilities related to sale of commissions receivable-non-current		10,459			12,509
Operating lease liabilities-non-current		922			1,228
Deferred tax liability		11,703			8,529
Total long-term liabilities		23,084			22,266
Total liabilities		178,041			135,456
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock, par value $0.0001, 20,000 and 37,400 shares authorized, nil and 37,228 shares issued, and outstanding as of March 31, 2026 and December 31, 2025		—			403,997
Stockholders’ equity (deficit):
Common stock, $0.0001 par value, nil and 1,040,000 shares, Class A Common Stock, $0.0001 par value, 1,000,000 and nil shares, and Class B Common Stock, $0.0001 par value, 40,000 and nil shares authorized at March 31, 2026 and December 31, 2025, respectively; nil and 16,647 shares Common Stock, 30,915 and nil shares of Common Stock Class A, and 32,079 and nil shares of Class B Common Stock issued and outstanding at March 31, 2026 and December 31, 2025, respectively		6			2
Additional paid-in capital		711,325			78,950
Accumulated other comprehensive loss		(1,103	)		(554	)
Accumulated deficit		(268,905	)		(102,514	)
Total stockholders’ equity (deficit)		441,323			(24,116	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	$	619,364		$	515,337

The accompanying notes are an integral part of these consolidated financial statements.

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ETHOS TECHNOLOGIES INC.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Data)


	Three Months Ended March 31,
	2026			2025
Revenue:
Commission	$	193,099		$	94,888
Total revenue		193,099			94,888
Costs and expenses:
Sales and marketing		144,107			56,383
General and administrative		180,644			13,396
Technology (exclusive of amortization)		27,063			9,658
Cost of revenue		3,230			1,575
Depreciation and amortization		1,369			1,337
Total costs and expenses		356,413			82,349
Income (loss) from operations		(163,314	)		12,539
Other income (expense):
Interest expense		(662	)		(973	)
Interest income		1,377			1,513
Other income, net		53			32
Total other income, net		768			572
Net income (loss) before income tax expense		(162,546	)		13,111
Income tax expense		(3,845	)		(864	)
Net income (loss)		(166,391	)		12,247
Deemed dividend on the conversion of Series D and D1 redeemable convertible preferred stock		(5,642	)		—
Net income (loss) attributable to common stockholders	$	(172,033	)	$	12,247
Per share data:
Basic net income (loss) per share	$	(3.57	)	$	0.75
Diluted net income (loss) per share	$	(3.57	)	$	0.21
Weighted-average shares used in computing basic net income (loss) per share		48,130			16,260
Weighted-average shares used in computing diluted net income (loss) per share		48,130			58,762

The accompanying notes are an integral part of these consolidated financial statements.

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ETHOS TECHNOLOGIES INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In Thousands)


	Three Months Ended March 31,
	2026			2025
Net income (loss)		(166,391	)		12,247
Other comprehensive income (loss):
Change in unrealized gain (loss) on marketable securities		(360	)		125
Unrealized foreign currency translation loss		(189	)		(119	)
Total other comprehensive income (loss)		(549	)		6
Comprehensive income (loss)	$	(166,940	)	$	12,253

The accompanying notes are an integral part of these consolidated financial statements.

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ETHOS TECHNOLOGIES INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In Thousands)


	Redeemable Convertible										Additional			Accumulated Other						Total
	Preferred Stock						Common Stock				Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares			Amount			Shares		Amount		Capital			Income (Loss)			Deficit			Equity
Balance, December 31, 2025		37,228		$	403,997			16,647	$	2	$	78,950		$	(554	)	$	(102,514	)	$	(24,116	)
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding		—			—			3,545		—		(48,419	)		—			—			(48,419	)
Issuance of common stock upon exercise of warrants		—			—			81		—		—			—			—			—
Deemed dividend on the conversion of Series D and D1 redeemable convertible preferred stock		—			—			—		—		(5,642	)		—			—			(5,642	)
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering		(37,228	)		(403,997	)		37,593		4		409,635			—			—			409,639
Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions and other offering costs		—			—			5,128		—		82,582			—			—			82,582
Stock-based compensation expense		—			—			—		—		194,219			—			—			194,219
Other comprehensive loss		—			—			—		—		—			(549	)		—			(549	)
Net loss		—			—			—		—		—			—			(166,391	)		(166,391	)
Balance, March 31, 2026		—		$	-			62,994	$	6	$	711,325		$	(1,103	)	$	(268,905	)	$	441,323

	Redeemable Convertible										Additional			Accumulated Other						Total
	Preferred Stock						Common Stock				Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares			Amount			Shares		Amount		Capital			Income (Loss)			Deficit			Deficit
Balance, December 31, 2024		37,228		$	403,997			16,032	$	2	$	66,991		$	(478	)	$	(173,665	)	$	(107,150	)
Issuance of common stock		—			—			500		1		718			—			—			719
Stock-based compensation expense		—			—			—		—		10,073			—			—			10,073
Other comprehensive income		—			—			—		—		—			6			—			6
Net income		—			—			—		—		—			—			12,247			12,247
Balance, March 31, 2025		37,228		$	403,997			16,532	$	3	$	77,782		$	(472	)	$	(161,418	)	$	(84,105	)

The accompanying notes are an integral part of these consolidated financial statements.

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ETHOS TECHNOLOGIES INC.

Condensed Consolidated Statements of Cash Flows

(In Thousands)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities
Net income (loss)	$	(166,391	)	$	12,247
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Deferred taxes		3,174			644
Depreciation and amortization		1,347			1,337
Non-cash interest expense		661			973
Amortization of discounts and premium, investments		(182	)		(432	)
Stock-based compensation expense		192,724			9,814
Operating lease right-of-use asset amortization		256			227
Unrealized foreign currency translation		(112	)		(119	)
Changes in operating assets and liabilities:
Prepaid and other assets		12,389			(7,963	)
Accounts payable		9,952			10,178
Accounts receivable		(16,839	)		(8,927	)
Commissions receivable		2,404			(1,251	)
Long-term commissions receivable		(40,802	)		(16,483	)
Accrued expenses		14,746			5,949
Other current liabilities		17,882			4,616
Net cash provided by operating activities		31,209			10,810
Cash flows from investing activities
Purchase of property and equipment		(353	)		(278	)
Purchase of investments		(77,187	)		(22,210	)
Proceeds from maturity of investments		27,015			25,200
Investment in software development costs		(1,573	)		(737	)
Net cash provided by (used in) investing activities		(52,098	)		1,975
Cash flows from financing activities
Proceeds from issuance of Class A common stock in initial public offering, net of underwriting discounts and commissions		91,580			—
Proceeds from liabilities related to sale of commissions receivable		—			5,000
Taxes paid related to net share settlement of restricted stock units		(49,085	)		—
Repayment of liabilities related to sale of commissions receivable		(3,573	)		(2,172	)
Proceeds from exercise of stock options and warrants		666			719
Payment of deferred offering costs		(1,804	)		(156	)
Net cash provided by financing activities		37,784			3,391
Net increase in cash and cash equivalents		16,895			16,176
Effect of exchange rates on cash		(77	)		(4	)
Cash and cash equivalents, beginning of period		91,091			35,075
Cash and cash equivalents, end of period	$	107,909		$	51,247
Supplemental disclosure of non-cash items:
Conversion of convertible preferred stock into common stock upon initial public offering	$	403,997		$	—
Reclassification of deferred offering costs to additional paid-in capital upon initial public offering	$	8,998		$	—
Deemed dividend on the conversion of Series D and D1 redeemable convertible preferred stock	$	5,642		$	—
Capitalized property and equipment costs in accounts payable at year end	$	26		$	79
Cash paid for income taxes	$	—		$	146
Stock-based compensation capitalized as software development costs	$	1,495		$	259
Deferred offering costs in accounts payable and accrued expenses	$	1,039		$	238

The accompanying notes are an integral part of these consolidated financial statements.

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ETHOS TECHNOLOGIES INC.

Notes to Condensed Consolidated Financial Statements

1. Organization

Ethos Technologies Inc., a Delaware corporation, and its wholly-owned subsidiaries (collectively referred to as the Company) is a technology-driven, direct-to-consumer platform that makes life insurance accessible and easy to apply for. Through its advanced digital underwriting, data analytics, and proprietary technology, the Company provides a streamlined process for consumers to explore, compare, and purchase life insurance policies entirely online. The Company contracts with top-rated insurance carriers to offer life insurance to families throughout the United States through the use of multi-channel marketing and advertising campaigns and independent third-party agents. The Company is a licensed agent in 49 states and serves as a third-party administrator (“TPA”). The streamlined application process is achieved through the Company’s full stack technology and predictive modeling platform which simplifies and automates the underwriting process allowing families to obtain same-day coverage. The Company primarily earns revenue in the form of commission payments from the contracted insurance carriers. Commission payments are received both when the initial policy is sold (first year) and when the underlying policyholder renews their policy in subsequent years.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 2 – Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("Annual Report"), which was filed with the Securities and Exchange Commission (“SEC”) on March 17, 2026. There have been no significant changes to these policies during the three months ended March 31, 2026.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), consistent in all material respects with those applied in the Company's Annual Report. The accompanying condensed consolidated financial statements include the wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements are unaudited but include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's quarterly results. The Company's condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes in the Company's Annual Report.

Initial Public Offering

On January 30, 2026, the Company completed its initial public offering (the “IPO”) of a total of 10.5 million shares of its Class A common stock, including 5.1 million shares of Class A common stock offered by the Company and 5.4 million shares of Class A common stock sold by existing investors (“Selling Stockholders”), at a price to the public of $19.00 per share. The gross proceeds to the Company from the IPO were $97.4 million and the net proceeds amounted to $82.6 million, after deducting $5.8 million underwriting discounts and $9.0 million commissions and offering expenses paid or payable by the Company. The Company did not receive any proceeds from the sale of shares of Class A common stock by the Selling Stockholders. Immediately prior to the closing of the IPO, each outstanding share of the Company’s Series A-1, Series A-2, Series A, Series B, Series C, Series D, Series D-1 redeemable convertible preferred stock converted into 18.5 million and 19.1 million shares of the Company’s Class A common stock and Class B common stock, respectively (see Note 9 for additional information). Included in this amount were 0.2 million incremental shares of Common Stock A issued in accordance with the contractual conversion rights of the Company's Series D and D-1 redeemable convertible preferred stock, and we recorded a $5.6 million deemed dividend to Series D and Series D1 redeemable convertible preferred stockholders upon the IPO.

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Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. These estimates, judgments and assumptions take into account historical and forward-looking factors that the Company believes are reasonable. Significant items subject to such estimates, judgments, and assumptions include revenue recognition, commissions receivable, liabilities related to sale of commissions receivable, website and software development costs, stock-based compensation, and income taxes. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, the Company’s condensed consolidated financial statements will be affected.

Segment Reporting

The Company has one reportable segment, which has been identified based on how the chief operating decision maker (“CODM”), manages the business, makes operating decisions and evaluates operating performance. The Company’s CODM is the Chief Executive Officer. The CODM reviews the Company’s revenue, expenses and net income as reported under GAAP, which is the primary measure of segment profit or loss. While the Company’s CODM also reviews the revenue streams attributable to individual products, operations are managed, resources are allocated, and financial performance is evaluated on a consolidated basis.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The Company believes the potential for collection issues with any of its customers is minimal as of March 31, 2026 and 2025 based on the lack of collection issues in the past and high financial standards the Company requires of its customers. The Company does not require collateral to secure trade receivable balances. For the three months ended March 31, 2026, three insurance carrier customers accounted for 45%, 33% and 10% of total revenue. For the three months ended March 31, 2025, three insurance carrier customers accounted for 38%, 33% and 17% of total revenue. As of March 31, 2026, three insurance carrier customers accounted for 67%, 13% and 12% of total accounts and commissions receivable. As of December 31, 2025, two insurance carrier customers accounted for 71% and 14% of total accounts and commissions receivable.

Deferred Offering Costs

Deferred offering costs, consisting of legal, accounting, and other fees and costs relating to the Company’s IPO are capitalized within prepaid and other assets on the condensed consolidated balance sheets. The deferred offering costs offset against the proceeds received by the Company upon the closing of the IPO. At the closing of the IPO, a total of $9.0 million of deferred offering costs were reclassified to additional paid-in capital within stockholders’ equity (deficit).

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The updates in this ASU may be applied on a prospective or retrospective application basis and are effective for annual periods beginning after December 15, 2026 and interim reporting beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and expands the existing guidance on capitalizing implementation costs for cloud computing arrangements that are service contracts. The new guidance is effective for public business entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statement disclosures.

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In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), which provides clarity on current interim disclosure requirements. The guidance is effective for the Company’s fiscal years and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements.

3. Revenue

The following table presents our revenue disaggregated by product (in thousands):


	Three Months Ended March 31,
	2026		2025
Commission revenue
Term life insurance	$	149,073	$	67,477
Other products		44,026		27,411
Total commission revenue	$	193,099	$	94,888

Accounts Receivable, Net

Accounts Receivable balances are summarized as follows (in thousands):


	Three Months Ended March 31,
	2026			2025
Beginning balance	$	36,498		$	30,303
Additions from commissions receivable		152,078			75,916
Other additions (1)		4,045			3,557
Collections		(139,277	)		(75,544	)
Change in allowance for doubtful accounts		(7	)		(2	)
Ending balance	$	53,337		$	34,230

(1)

Other additions are primarily comprised of amounts arising from revenue that does not flow through commission receivable along with other partnership-related amounts.

Contract Balances

After a policy is sold, the Company has no material additional or recurring obligations to the policyholder or the insurance carrier. As such, there are no contract liabilities recorded in the condensed consolidated balance sheets.

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4. Marketable Securities

The following tables summarize the amortized cost, gross unrealized gains and losses, and estimated fair value of debt securities as of March 31, 2026 and December 31, 2025 (in thousands):


	Cost or Amortized		Gross Unrealized					Allowance for Credit		Estimated Fair
March 31, 2026	Cost		Gains		Losses			Loss		Value
U.S. government bonds	$	17,101	$	—	$	(1	)	$	—	$	17,100
Corporate debt securities		65,224		49		(144	)		—		65,130
Commercial Paper		4,681		1		—			—		4,681
Agency bond		29,062		—		(78	)		—		28,984
Total investments	$	116,068	$	50	$	(223	)	$	—	$	115,895


	Cost or Amortized		Gross Unrealized					Allowance for Credit		Estimated Fair
December 31, 2025	Cost		Gains		Losses			Loss		Value
U.S. government bonds	$	9,230	$	4	$	—		$	—	$	9,234
Corporate debt securities		44,994		180		(1	)		—	$	45,173
Agency bond		11,935		4		(2	)		—	$	11,937
Total investments	$	66,159	$	188	$	(3	)	$	—	$	66,344

The Company examined its securities at each balance sheet date to determine if there was a need to recognize an allowance for credit loss pertaining to these securities. Upon review of all holdings, it was concluded that the unrealized losses on the fixed maturity securities were chiefly attributable to the interest rate environment, rather than the credit quality of the issuers. The Company has no plans to liquidate these investments, and it is unlikely for a necessary sale to occur before the recovery of their amortized cost basis. Therefore, no allowance for credit loss was recognized as of March 31, 2026 and December 31, 2025.

The gross unrealized losses and estimated fair values on investments aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position were as follows (in thousands):


	12 months or greater				Less than 12 months
March 31, 2026	Unrealized Losses		Estimated Fair Value		Unrealized Losses			Estimated Fair Value
U.S. government bonds	$	—	$	—	$	(1	)	$	17,100
Corporate debt securities		—		—		(144	)		48,749
Agency bond		—		—		(78	)		28,984
Total investments	$	—	$	—	$	(223	)	$	94,833


	12 months or greater				Less than 12 months
December 31, 2025	Unrealized Losses		Estimated Fair Value		Unrealized Losses			Estimated Fair Value
Corporate debt securities	$	—	$	—	$	(1	)	$	4,597
Agency bond		—		—		(2	)		7,060
Total investments	$	—	$	—	$	(3	)	$	11,657

Net realized and unrealized gains and losses on investments are a function of the difference between the amount received by us on the sale of a security and the security’s cost-basis, mark-to-market adjustments, credit losses recognized in earnings, and unrealized gains and losses on equity securities. Unrealized gains and losses on fixed maturity securities are recognized as a component of other comprehensive income and do not impact the Company’s net income.

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The estimated fair value of debt securities as of March 31, 2026 and December 31, 2025, by contractual maturity, were as follows (in thousands):


March 31, 2026	Amortized Cost		Estimated Fair Value
Due in one year or less	$	36,707	$	36,692
Due after one year through five years		79,361		79,203
Total investments	$	116,068	$	115,895


December 31, 2025	Amortized Cost		Estimated Fair Value
Due in one year or less	$	34,849	$	34,876
Due after one year through five years		31,310		31,468
Total investments	$	66,159	$	66,344

5. Fair Value Measurement

Certain assets and liabilities are required to be recorded at fair value on a recurring basis.

The accounting guidance for fair value measurements prioritizes valuation methodologies based on the reliability of the inputs in the following three-tier value hierarchy:

Level 1 Quoted prices in active markets for identical assets or liabilities.

Level 2 Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

The Company applied the following methods and assumptions in estimating its fair value measurements. The Company’s investments in U.S. Government bonds are classified as Level 1 within the fair value hierarchy given that they are valued based on quoted market prices for identical assets in active markets. Agency bonds and corporate bonds are classified as Level 2 within the fair value hierarchy because they are valued using inputs other than quoted prices in active markets that are observable directly or indirectly.

Financial instruments measured at fair value are as follows (in thousands):


March 31, 2026	Level 1		Level 2		Level 3		Total
U.S. government bonds	$	17,100	$	—	$	—	$	17,100
Corporate debt securities		—		65,130		—		65,130
Commercial paper		—		4,681		—		4,681
Agency bond		—		28,984		—		28,984
Total assets measured at fair value	$	17,100	$	98,795	$	—	$	115,895


December 31, 2025	Level 1		Level 2		Level 3		Total
U.S. government bonds	$	9,234	$	—	$	—	$	9,234
Corporate debt securities		—		45,173		—		45,173
Agency bond		—		11,937		—		11,937
Total assets measured at fair value	$	9,234	$	57,110	$	—	$	66,344

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6. Balance Sheet Components

The Company’s prepaid and other current assets recorded in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 were as follows (in thousands):


	March 31, 2026		December 31, 2025
Agent advances (1)	$	26,911	$	40,294
Deferred offering costs		—		7,241
Other assets		8,121		7,018
Total prepaid and other assets	$	35,032	$	54,553

(1) During the three months ended March 31, 2026, we updated our third-party agent compensation and persistency estimates to reflect both maturing cohort experience and the impact of recent operational improvements. The effect of this change in accounting estimate was an increase to operating expenses and net loss by $16.5 million for the three months ended March 31, 2026.

The components of the Company’s property and equipment, net as of March 31, 2026 and December 31, 2025 were as follows (in thousands):


	March 31, 2026			December 31, 2025
Developed software	$	25,588		$	22,535
Computer equipment		4,143			3,798
System consulting		141			141
Furniture and fixtures		61			53
Leasehold improvements		7			7
Property and equipment		29,940			26,534
Accumulated depreciation and amortization		(19,652	)		(18,345	)
Total property and equipment, net	$	10,288		$	8,189

The Company recorded depreciation and amortization expense related to property and equipment, net, excluding developed software, of $0.3 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively.

The Company capitalized developed software costs of $3.1 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively. Amortization expense related to developed software costs, included in depreciation and amortization in the condensed consolidated statements of operations and comprehensive income (loss), was $1.1 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively.

The Company’s accrued expenses recorded in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 were as follows (in thousands):


	March 31, 2026		December 31, 2025
Accrued sales and marketing expenses	$	41,188	$	27,761
Accrued payroll and compensation		4,041		2,890
Accrued underwriting expenses		4,780		2,615
Accrued professional services expenses		1,205		1,004
Deferred offering costs payable		52		934
Other accrued expenses		1,760		4,020
Total accrued expenses	$	53,026	$	39,224

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The Company’s other current liabilities recorded in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 were as follows (in thousands):


	March 31, 2026		December 31, 2025
Persistency reserve liability	$	21,862	$	4,879
Taxes payable		1,862		1,092
Other current liabilities		446		50
Total other current liabilities	$	24,170	$	6,021

The persistency reserve liability represents amounts received in excess of revenue recognized related to certain insurance carriers.

7. Commitments and Contingencies

Operating Lease

The Company has non-cancellable contractual obligations and commitments primarily related to operating lease agreements for its office facilities in San Francisco, California, as well as in India, which expire at various dates through November 2028. For its primary operating leases, the Company has the option to extend the lease terms.

As of March 31, 2026, future lease payments under the Company’s operating lease agreements were as follows (in thousands):


Remainder of 2026	$	905
2027		771
2028		503
Total future lease payments		2,179
Less interest		(128	)
Present value of lease liabilities	$	2,051

Letter of Credit

As of March 31, 2026, the Company had an unsecured letter of credit of $30.0 million with Citizens Bank in favor of two carrier partners. The line of credit cannot be drawn upon in the normal course of business and will only be drawn upon automatically to fund the letter of credit obligation if the carrier partner calls on the letter of credit. If there is a draw on the letter of credit, the Company must reimburse the bank in cash, in immediately available funds, within one business day following notice of such draw from the lender. The letter of credit expires in June 2026. As of March 31, 2026, there were no borrowings outstanding under the senior unsecured letter of credit or the unsecured line of credit.

8. Liabilities Related to Sale of Commissions Receivable

The table below shows the activity of the liabilities related to sale of commissions receivable (in thousands):


	Three Months Ended March 31,
	2026			2025
Beginning balance	$	24,259		$	33,545
Non-cash interest expense		497			973
Repayment of liabilities related to sale of commissions receivable		(3,573	)		(2,173	)
Ending balance	$	21,183		$	32,345
Less: Liabilities related to sale of commissions receivable-current		10,724			11,150
Liabilities related to sale of commissions receivable, non-current	$	10,459		$	21,195

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The aggregate future estimated payments less proceeds received will be recognized as interest expense over the life of the agreement. The Company’s estimated effective annual interest rate was 8.48% and 8.31% as of March 31, 2026 and December 31, 2025, respectively.

9. Stockholders’ Equity (Deficit)

As of December 31, 2025, the Company was authorized to issue two classes of stock: common stock and redeemable convertible preferred stock. The total number of shares that the Company is authorized to issue on December 31, 2025, is 1,040.0 million shares of common stock with a par value of $0.0001 and 37.4 million of preferred stock with a par value of $0.0001.

Upon the closing of the IPO on January 30, 2026, the Company has two classes of authorized common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to 20 votes and is convertible at any time into one share of Class A common stock.

Redeemable Convertible Preferred Stock

A summary of the redeemable convertible preferred stock shares authorized, issued, and outstanding as of December 31, 2025 is as follows (in thousands):

          
         Shares

          
         Shares

         Issued and

         Carrying

         Liquidation

          
         Authorized

         Outstanding

         Value

         Value

Balance at December 31, 2025

37,400

37,228

4

404,801

Immediately prior to the closing of the IPO on January 30, 2026, all 37.2 million shares of the Company’s Series A-1, Series A-2, Series A, Series B, Series C, Series D, and Series D-1 redeemable convertible preferred stock converted into an aggregate of 18.5 million shares and 19.1 million shares of the Company’s Class A and Class B common stock after adjusting the conversion ratios of the redeemable convertible preferred stock, respectively, and such shares of redeemable convertible preferred stock were cancelled, retired, and eliminated from the shares of stock that the Company is authorized to issue and shall not be reissued by the Company. Included in this amount were 0.2 million incremental shares of Common Stock A issued in accordance with the contractual conversion rights of the Company's Series D and D1 redeemable convertible preferred stock. We recorded a $5.6 million deemed dividend to Series D and D1 redeemable convertible preferred stockholders upon the IPO.

Immediately prior to the closing of the IPO, the Company authorized to issue 20.0 million shares of preferred stock. No shares of redeemable convertible preferred stock were outstanding following the IPO and as of March 31, 2026.

Common Stock

As of December 31, 2025, 16.6 million shares of authorized common stock were issued and outstanding, respectively, and each holder of common stock has one vote per share of common stock held on all matters that are submitted for stockholder vote. The majority of the outstanding common stock has been issued as founder’s stock. Holders of the Company’s common stock are entitled to dividends if and when declared by the Board of Directors. The Company did not hold any shares as treasury shares as of December 31, 2025.

On January 30, 2026, the Company completed its IPO of a total of 10.5 million shares of its Class A common stock, including 5.1 million shares of Class A common stock offered by the Company and 5.4 million shares of Class A common stock sold by existing investors (“Selling Stockholders”), at a price to the public of $19.00 per share. The gross proceeds to the Company from the IPO were $97.4 million and the net proceeds amounted to $82.6 million, after deducting $5.8 million underwriting discounts and $9.0 million commission and offering expenses paid or payable by the Company. The Company did not receive any proceeds from the sale of shares of Class A common stock by the Selling Stockholders. Immediately prior to the closing of the IPO, each outstanding share of the Company’s Series A-1, Series A-2, Series A, Series B, Series C, Series D, Series D-1 redeemable convertible preferred stock converted into 18.5 million and 19.1 million shares of the Company’s Class A common stock and Class B common stock, respectively.

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In connection with the closing of its IPO, the Company’s certificate of incorporation was amended and restated to authorize 1,000.0 million shares of Class A common stock, par value $0.0001 per share, 40.0 million shares of Class B common stock, par value $0.0001 per share, and 20.0 million shares of preferred stock, par value $0.0001 per share.

In connection with the IPO, the Company’s board of directors adopted, and its stockholders approved, the 2026 Equity Incentive Plan (the “2026 Plan”), which became effective upon the effectiveness of the Company’s Registration Statement on Form S-1. In connection with the effectiveness of the 2026 Plan, the Company’s 2016 Equity Incentive Plan (the “2016 Plan”) terminated, and no further awards will be granted under the 2016 Plan. However, all outstanding awards will continue to be governed by their existing terms. Under the 2026 Plan, 19.0 million shares of the Company’s common stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, consisting of 13.0 million new shares and up to 6.0 million shares underlying outstanding awards granted under our 2016 Plan that, after the date the 2026 Plan became effective. Additionally, the Company’s board of directors adopted, and its stockholders approved, the 2026 Employee Stock Purchase Plan (the “2026 ESPP”), which became effective upon the effectiveness of the Company’s Registration Statement on Form S-1, with an initial reserve of 1.3 million shares of the Company’s Class A common stock.

The Company has reserved shares of common stock for future issuance for the following purposes at March 31, 2026 (in thousands):


	March 31, 2026
Warrants to purchase common stock		463
Common stock options outstanding and unvested RSUs		5,369
Shares available for grant under 2026 Plan		12,946
Shares available for grant under 2026 ESPP		1,300
Total shares of common stock reserved		20,078

10. Stock-Based Compensation

The Board of Directors has authorized the 2016 Plan. Under the 2016 Plan, the Board of Directors may grant incentive stock awards to employees, and non-statutory stock options to employees, directors and consultants. The 2016 Plan provides for the grant of stock options, restricted stock, and other stock-related and performance awards that may be settled in cash, stock, or other property. During 2023, the 2016 Plan was amended to allow for a maximum of 12.4 million shares of unauthorized or unissued common stock to be available.

In connection with the IPO, the Company’s board of directors and its stockholders:

•

Adopted and approved the 2026 Plan. Under the 2026 Plan, 19.0 million shares of the Company’s common stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, and other stock-based awards. In connection with the effectiveness of the 2026 Plan, the Company’s 2016 Plan terminated, and no further awards will be granted under the 2016 Plan. However, all outstanding awards will continue to be governed by their existing terms. The 2026 Plan provides that the initial aggregate number of shares that may be issued pursuant to Awards will not exceed 13.0 million plus up to 6.0 million returning shares, as they become available from time to time. In addition, subject to any adjustments as necessary to implement any Capitalization Adjustments (as defined therein), the aggregate number of Shares will automatically increase on January 1 of each year for a period of ten years commencing 2027 and ending on (and including) 2036, in an amount equal to 5% of the total number of shares of capital stock outstanding on the preceding December 31. The aggregate maximum number of shares that may be issued pursuant to the exercise of Incentive Stock Options is 39.0 million shares.

•

Adopted and approved the 2026 Employee Stock Purchase Plan (the “2026 ESPP”). The 2026 ESPP provides that the maximum number of Shares may be issued under the Plan will not exceed 1.3 million shares of the Company’s Class A common stock, plus the number of shares that are automatically added on January 1 of each calendar year for a period of up to ten years, commencing on January 1, 2027 and ending on (and including) January 1, 2036, in an amount equal to the lesser of (a) 1% of the total number of shares of capital stock outstanding on the last day of the preceding calendar year, or (b) 2.6 million shares.

The Company capitalized stock-based compensation expenses as website and software development costs of $1.5 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

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Stock Options

The following table summarizes the stock option activities under the Company’s stock plans for the three months ended March 31, 2026 (in thousands, except for per share data):


	Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value		Weighted- Average Exercise Term (Years)
Outstanding at December 31, 2025		1,136		$	3.18	$	20,715		4.38
Forfeited		—		NM		NM		NM
Exercised		(237	)		2.81		3,310		—
Outstanding at March 31, 2026		899		$	3.27	$	7,377		4.15
Vested and expected to vest at March 31, 2026		899		$	3.27	$	7,377		4.15
Exercisable at March 31, 2026		899		$	3.27	$	7,377		4.15

* NM - not meaningful

On January 29, 2026, 0.2 million fully vested stock options were exercised resulting in issuance of 0.2 million shares of common stock which immediately converted into 0.2 million shares of Class A common stock upon the closing of the IPO. The Company recorded compensation expense for stock options of nil and $10.1 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, all outstanding options were fully vested and there was no unrecognized compensation cost.

Restricted Stock Units

The following table summarizes the restricted stock units activity under the Company’s stock plans for the three months ended March 31, 2026 (in thousands, except for per share data):


	Shares			Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2025		10,451		$	26.10
Granted		145			12.56
Forfeited		(64	)		28.30
Vested		(6,062	)		22.90
Unvested outstanding at March 31, 2026		4,470		$	29.97

Share-based compensation expense for awards with only service conditions is recognized on a straight-line basis over the requisite service period of the related award. For stock-based awards with both service and performance conditions, the Company records compensation expense when it is deemed probable that the performance condition will be met and records compensation expenses for each vesting tranche for awards subject to graded vesting method.

During the three months ended March 31, 2025, the performance triggers were lifted for 0.3 million RSUs, the awards were vested and $8.0 million was recognized as compensation expense. On January 29, 2026, 5.7 million restricted stock units meeting both service and performance triggers became vested and released, resulting in the recognition of $181.7 million in compensation cost and net issuance of 3.1 million shares of common stock after considering the withholding tax impact, which subsequently converted into 2.0 million and 1.1 million shares of Class A and Class B common stock, respectively, upon the closing of the IPO. During the three months ended March 31, 2026, the Company recorded total $193.3 million compensation expense for restricted stock awards.

As of March 31, 2026, unrecognized compensation costs related to unvested RSUs and PRSUs were $1.1 million and $72.1 million, respectively. The remaining unrecognized compensation costs for RSUs and PRSUs are expected to be recognized over a weighted-average period of 3.6 years and 1.8 years, respectively, excluding additional stock-based compensation expense related to any future grants of share-based awards.

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Stock-based Compensation— The Company recognizes stock-based compensation expense for awards with only service conditions on a straight-line basis over the requisite service period of the related award and recognizes stock-based compensation expenses for awards with performance conditions when it is deemed probable that the performance condition will be met and record compensation expenses for each vesting tranche for awards subject to graded vesting method.

The amount of stock-based compensation related to stock-based awards in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 were as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Sales and marketing	$	9,933	$	1,987
General and administrative		166,555		5,474
Technology (exclusive of amortization)		16,236		2,353
Stock-based compensation, net of amounts capitalized	$	192,724	$	9,814
Capitalized stock-based compensation		1,495		259
Total stock-based compensation	$	194,219	$	10,073

Common Stock Warrants

April 2024 Warrant

In April 2024, the Company issued warrants to a third party to purchase an aggregate of up to 0.4 million shares of common stock at an exercise price of $10.15 per share (“April 2024 Warrant”). The April 2024 Warrant expires in 2027, and none vested during the three months ended March 31, 2026. The remainder of the shares underlying the April 2024 Warrant may vest and become exercisable over the contractual term, contingent upon the achievement of certain performance conditions. For the three months ended March 31, 2026 and 2025, the Company recognized nil and $0.2 million, respectively, related to the issuance of the April 2024 Warrant. The April 2024 warrant remained outstanding following the closing of the IPO and will convert to Class A common stock upon exercise of this warrant.

January 2025 Warrant

In January 2025, the Company issued fully vested warrants to a third party to purchase an aggregate of up to 0.03 million shares of common stock at an exercise price of $0.07 per share (“January 2025 Warrant”). The January 2025 Warrant expires in 2030. During the three months ended March 31, 2026 and 2025, the Company recognized nil and $1.3 million, related to the issuance of the January 2025 Warrant. In October 2025, all the 0.03 million warrants were exercised and became outstanding Class A Common Stock.

April 2025 Warrant

In April 2025, the Company issued warrants to a third party to purchase an aggregate of up to 0.08 million shares of common stock at an exercise price of $40.32 per share (“April 2025 Warrant”). The April 2025 Warrant expires in 2027, and no warrants vested during the three months ended March 31, 2026. The remainder of the shares underlying the April 2025 Warrant may vest and become exercisable over the contractual term, contingent upon the achievement of certain performance conditions. The Company did not recognize any expenses related to the issuance of the April 2025 Warrant during the three months ended March 31, 2026 and 2025. The April 2025 warrant remained outstanding following the closing of the IPO and will convert to Class A common stock upon exercise of this warrant.

The grant date fair value of the January 2025 Warrant, and April 2025 Warrant were determined using the Black-Scholes option pricing model using the following assumptions:


	April 2024 Warrant			January 2025 Warrant			April 2025 Warrant
Expected volatility		68.0	%		63.6	%		64.2	%
Expected risk-free interest rate		4.8	%		4.3	%		3.7	%
Expected term (in years)		2.69			2.50			1.73
Expected dividend yield	N/A			N/A			N/A
Fair value	$	12.65		$	40.25		$	14.14

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Secondary Sale of Stock

In February 2025, the Company completed a secondary sale of 0.5 million shares of common stock from employees to new investors. The secondary sale price was based on an independent appraisal of the Company’s fair market value.

11. Income Taxes

For the three months ended March 31, 2026 and 2025, the Company’s effective tax rates were (2.4)% and 6.6%, respectively, which differ from the U.S. statutory tax rate primarily due to income taxes in foreign jurisdictions, partially offset by valuation allowance in the U.S. jurisdictions where the Company does not benefit from losses and tax credits.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law. The legislation did not have a material impact on the Company’s condensed consolidated financial statements.

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12. Net Income (Loss) Per Share Attributable to Common Stockholders

Basic earnings per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration for common stock equivalents. Diluted net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period and potentially dilutive common stock equivalents. For periods of net loss, basic and diluted earnings per share are the same as the effect of potential common stock is anti-dilutive.

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share attributed to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.

A reconciliation of the denominator used in the calculation of basic and diluted net income (loss) per share is as follows (in thousands, except for per share data):

          
         Three Months Ended March 31,

          
         Class A

         Class B

         Consolidated

         Common

         Basic net income (loss) per share:

         Numerator:

Ethos Technologies Inc. 10-Q