Ethos Technologies Inc. Class A Common Stock (NASDAQ:LIFE) reported record third-quarter fiscal 2026 results, with revenue rising 151% year over year to $235 million as growth accelerated in both its direct-to-consumer and third-party distribution channels.
Chief Executive Officer Peter Colis said the company delivered its third consecutive quarter of triple-digit year-over-year revenue growth. Ethos generated adjusted EBITDA of $35 million, up 87% from a year earlier, and reported a 15% adjusted EBITDA margin. The company’s Rule of 40 score, combining revenue growth and adjusted EBITDA margin, was 166.
Ethos activated 142,111 policies during the quarter, bringing its cumulative total to more than 850,000 activated policies. Average revenue per policy was $1,655, declining sequentially as policy sales shifted more toward whole life products in the third-party channel, Chief Financial Officer Chris Capozzi said.
Direct and Third-Party Channels Both Expand
Revenue in Ethos’ direct channel increased 112% year over year to $119 million. Colis attributed that growth to the company’s vertically integrated technology platform, which spans marketing, application, underwriting, policy issuance, premium collection, administration and servicing.
“By making it possible to apply and get covered in minutes, entirely online and with no medical exams, we have removed the friction that has historically kept people from buying life insurance,” Colis said.
The company said its direct business benefits from a “virtuous data cycle,” in which higher user volume supports more marketing and product testing, contributing to conversion-rate improvements. Ethos increased marketing spending during the quarter and emphasized investments in top-of-funnel brand-building channels, including television, radio and social media.
Colis said Ethos is not heavily exposed to changes in search traffic because the majority of its marketing spending is directed toward those top-of-funnel channels. The company said it is monitoring developments in large language models and agentic commerce, though it is not currently seeing material policy origination from AI agents or LLMs.
Third-party channel revenue rose 209% year over year to $116 million. The company said agencies added in 2025 and 2026 ramped quickly, while longer-tenured agency partners continued to increase agent productivity and recruit additional agents. Capozzi said each of the newer agency cohorts represented a double-digit share of third-party revenue in the quarter.
In response to analyst questions, Colis said Ethos has a pipeline of agencies in the onboarding process and characterized agency acquisition costs as a low single-digit percentage of third-party revenue. He also said the company’s partnership with Liberty Mutual is still in its early stages but is “contributing nicely.”
Margins Reflect Mix Shift and Brand Investment
Third-quarter contribution profit increased 81% year over year to $66 million, representing a 28% contribution margin. Capozzi said the company’s blended margin was affected by the third-party channel accounting for roughly 10 additional percentage points of revenue mix compared with the second quarter.
Ethos also increased direct-channel brand investment, resulting in a modest reduction in year-over-year return on ad spend. Capozzi said the change was self-determined rather than driven by external advertising-market conditions, aside from seasonal dynamics during the summer period.
Despite the increased investment, the company said policies activated in the quarter were profitable and generated positive variable cash flow within 60 days of activation.
Capozzi said operating leverage continued to emerge in general and administrative and research and development spending. Such operating expenses represented about 13% of revenue in the quarter, compared with 19% a year earlier. He said future margin expansion could also come from broader brand awareness and potential new product introductions, though margins may fluctuate based on channel and product mix.
Cash Position and Carrier Capacity
Ethos ended the quarter with $290 million in cash equivalents and investments, up from $253 million at the end of the prior quarter. Accounts and commissions receivable totaled $433 million, up 13% sequentially and 63% year over year. The company described that balance as estimated future cash flows already earned but not yet received.
Cash flow from operating activities was $41 million in the quarter, producing cash conversion above 100%, according to Capozzi. He said the rapidly growing third-party business carries a higher cash-conversion profile than the direct channel.
The company did not repurchase shares during the quarter under its $100 million repurchase authorization. Capozzi said Ethos plans to use the authorization opportunistically when it believes the market price materially differs from the underlying value of the business.
Colis also said Ethos has more carrier demand and capacity for its premiums than it currently has policy supply. The company works with six carriers across 13 products, including term, whole life and indexed universal life offerings, and is developing additional products. Ethos aims to maintain a focused carrier panel rather than offer a broad set of off-the-shelf products, he said.
During the quarter, one carrier partner experienced an internal systems outage. Colis said Ethos’ systems were not affected and that its end-to-end platform allowed the company to maintain production and servicing without material disruption. He said any effect from the event was already reflected in the company’s financial results and outlook.
Guidance Raised for Fiscal 2026
Ethos raised its full-year fiscal 2026 outlook. The company now expects:
- Fourth-quarter revenue of $220 million to $224 million, representing 102% year-over-year growth at the midpoint.
- Fourth-quarter adjusted EBITDA of $30 million to $32 million.
- Full-year revenue of $838 million to $842 million, representing 117% growth at the midpoint.
- Full-year adjusted EBITDA of $134 million to $136 million.
Capozzi said Ethos expects to provide an initial view of fiscal 2027 when it reports fourth-quarter results in February. He said the company expects its direct-channel data cycle and third-party model of adding agencies, recruiting agents and improving agent productivity to remain central to its growth strategy.
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.
