Ethos Technologies Inc.

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 and nine months ended September 30, 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 subsidiaries. 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 and 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 Class A common stock 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 D-1 redeemable convertible preferred stockholders upon the IPO.

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 hasone 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 September 30, 2026 and December 31, 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. As of September 30, 2026, three insurance carrier customers accounted for 64%,16% and 10% 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. Insurance carrier customers representing 10% or more of total revenue are presented in the following table:

*Less than 10% of total revenue.

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 were 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.

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 channel (in thousands):

Accounts Receivable, Net

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

(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 areno contract liabilities recorded in the condensed consolidated balance sheets.

4. Marketable Securities

The following tables summarize the amortized cost, gross unrealized gains and losses, and estimated fair value of debt securities as of September 30, 2026 and December 31, 2025 (in thousands):

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 September 30, 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):

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.

The estimated fair value of debt securities as of September 30, 2026 and December 31, 2025, by contractual maturity, were as follows (in thousands):

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):

6. Balance Sheet Components

The Company’s prepaid and other current assets recorded in the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025 were as follows (in thousands):

The components of the Company’s property and equipment, net as of September 30, 2026 and December 31, 2025 were as follows (in thousands):

The Company recorded depreciation and amortization expense related to property and equipment, net, excluding developed software, of$0.3 million and $0.3 million for thethree months ended September 30, 2026 and 2025, respectively, and$1.0 million and $0.7 million for thenine months ended September 30, 2026 and 2025, respectively.

The Company capitalized developed software costs of$2.2 million and$1.4 million for thethree months ended September 30, 2026 and 2025, respectively, and$7.2 million and $3.5 million for thenine months ended September 30, 2026 and 2025, respectively. Amortization expense related to developed software costs, included in depreciation and amortization in the condensed consolidated statements of operations, was$1.4 million and $1.1 million for thethree months ended September 30, 2026 and 2025, respectively, and$3.7 million and $3.5 million for thenine months ended September 30, 2026 and 2025, respectively.

The Company’s accrued expenses recorded in the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025 were as follows (in thousands):

The Company’s other current liabilities recorded in the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025 were as follows (in thousands):

(1)The estimated carrier advances represent cash commission amounts received in excess of revenue recognized related to certain insurance carriers pursuant to our contracts with these 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 September 30, 2026, future lease payments under the Company’s operating lease agreements were as follows (in thousands):

Letter of Credit

On June 30, 2025, the Company entered into an unsecured letter of credit of $30.0 million with Citizens Bank in favor of two of its carriers. The letter of credit could not be drawn upon in the normal course of business and could only be drawn upon automatically to fund the letter of credit obligation if such carrier called on the letter of credit. If there was a draw on the letter of credit, the Company was obligated to 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 expired in June 2026.

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):

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 7.07% and 8.31% asof September 30, 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 was authorized to issue on December 31, 2025, was 1,040.0 million shares of common stock with a par value of $0.0001 and 37.4 million shares of preferred stock with a par value of $0.0001.

Upon the closing of the IPO on January 30, 2026, the Company had 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.

Share Repurchase Program

During the three months ended September 30, 2026, the Board of Directors of Ethos authorized a share repurchase program of up to $100.0 million of the Company’s outstanding Class A common stock. Repurchases may be effected, from time to time, either on the open market (including pre-set trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws. The timing and the amount of any repurchased Class A common stock will be determined by the Company’s management based on its evaluation of market conditions and other factors. The repurchase program does not obligate the Company to acquire any particular amount of Class A common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. No shares have been repurchased under the repurchase program as of the date of this Quarterly Report.

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):

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 Class A common stock issued in accordance with the contractual conversion rights of the Company's Series D and D-1 redeemable convertible preferred stock. The Company recorded a $5.6 million deemed dividend to Series D and D-1 redeemable convertible preferred stockholders upon the IPO.

Immediately prior to the closing of the IPO, the Company was 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 September 30, 2026.

Common Stock

As of December 31, 2025,16.6 million shares of common stock were issued and outstanding, 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 entitledto 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 the 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, and 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.

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. 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 September 30, 2026 (in thousands):

10. Stock-Based Compensation

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. 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 defined Capitalization Adjustments, the aggregate number of shares of the Company's common stock reserved 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. Previously, under the 2016 Plan, the Board of Directors was permitted to grant incentive stock awards to employees, and non-statutory stock options to employees, directors and consultants. The 2016 Plan provided for the grant of stock options, restricted stock, and other stock-related and performance awards that could be settled in cash, stock, or other property. 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 ESPP provides that the maximum number of shares of the Company's common stock that may be issued under the 2026 ESPP 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.

Stock Options

The following table summarizes the stock option activities under the Company’s stock plans for thenine months ended September 30, 2026 (in thousands, except for per share data):

• 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. All outstanding options were fully vested as of December 31, 2025.

Restricted Stock Units

RSUs granted under the 2026 Plan are generally subject only to a service-based vesting condition. The time-based RSUs generally vest over periods ranging from two to four years, subject to continued service. As of September 30, 2026, total unrecognized stock-based compensation expense related to unvested RSUs was$69.0 million, excluding additional stock-based compensation expense related to any future grants of stock-based awards. The remaining unrecognized compensation cost for RSUs is expected to be recognized over a weighted-average period of 2.6 years.

Performance-based Restricted Stock Units (“PRSUs”)

Pre-IPO PRSUs

PRSUs granted under the 2016 Plan prior to the completion of the IPO (“pre-IPO PRSUs”) were generally subject to both a service-based vesting condition and a performance-based vesting condition. In February 2025, the performance triggers were lifted for 0.3 million pre-IPO PRSUs, the awards vested and $8.0 million was recognized as compensation expense. On January 29, 2026,5.7 million pre-IPO PRSUs meeting both service and perfor mance triggers vested and were 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.

As of September 30, 2026, total unrecognized stock-based compensation expense related to unvested pre-IPO PRSUs granted under the 2016 Plan was$43.2 million. The remaining unrecognized compensation cost for pre-IPO PRSUs is expected to be recognized over a weighted-average period of 1.7 years.

2026 PRSUs

In July 2026, the Company granted a total of 4.8 million PRSUs (“2026 PRSUs”) to its Chief Executive Officer and its President under the 2026 Plan. The 2026 PRSUs vest based on Adjusted EBITDA Compound Annual Growth Rate (“CAGR”) targets achieved over the performance periods ending December 31, 2027 and 2028, respectively (ranging from 0% to 200% of target), subject to continued service, with the number of shares exceeding 100% of the target also subject to a market condition.

Each annual tranche of the 2026 PRSUs is evaluated independently based on the performance period for the respective fiscal year. Stock-based compensation expense associated with the 2026 PRSUs is recognized using a graded attribution method, based on the Company's periodic assessment of the probability that the performance condition will be achieved. At the end of each performance period, actual results will be measured against the predetermined targets to determine the shares of 2026 PRSUs earned as compensation.

The Company measured the fair value of the 2026 PRSUs on the grant date using a Monte Carlo simulation valuation model. The following table summarizes the assumptions used to determine the fair value of the 2026 PRSUs:

During the three and nine months ended September 30, 2026, the Company recognized $6.7 million stock-based compensation expense related to 2026 PRSUs. As of September 30, 2026, total unrecognized stock-based compensation expense related to unvested 2026 PRSUs was$78.0 million. The remaining unrecognized compensation cost for 2026 PRSUs is expected to be recognized over a weighted-average period of 3.1 years.

The following table summarizesthe RSUs and PRSUs activity under the Company’s stock plans for the nine months ended September 30, 2026 (in thousands, except for per share data):

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. 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.

The amount of stock-based compensation related to stock-based awards in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):

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 April 2027, andnone vested during thethree and nine months ended September 30, 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 September 30, 2026 and 2025, the Company recognizednil for both periods, related to the issuance of the April 2024 Warrant. For thenine months ended September 30, 2026 and 2025, the Company recognizednil and less than $0.1 million, respectively. 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 Company recognizednil and $1.3 million during thethree and nine months ended September 30, 2025, respectively, related to the issuance of the January 2025 Warrant. In October 2025, all of 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 April 2027, andno warrants vested during thethree and nine months ended September 30, 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 recognizednil for thethree and nine months ended September 30, 2026. The Company recognized less than $0.1 million for thethree and nine months ended September 30, 2025, respectively. A total of 0.05 million April 2025 warrants 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 April 2024 Warrant, January 2025 Warrant, and April 2025 Warrant were determined using the Black-Scholes option pricing model using the following assumptions:

11. Income Taxes

The Company’s effective tax rates were 14.5% and 10.5% for the three months ended September 30, 2026 and 2025, respectively, and(3.2)% and 8.0% for the nine months ended September 30, 2026 and 2025, respectively. The effective tax rates 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.

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 because 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):

(1)In connection with our IPO, our Series A-1, Series A-2, Series A, Series B, Series C, Series D and 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. For the nine months ended September 30, 2026, these shares were weighted in the denominator of net income (loss) per share for Class A and Class B common stock for the portion of the time outstanding subsequent to our IPO.

The potential shares of common stock that were excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows (in thousands):

(1) The number of unvested RSUs and PRSUs excludes 4.8 million unvested 2026 PRSUs for which performance conditions have not been established as of September 30, 2026, as they are not considered outstanding for accounting purposes. For further information refer to Note 10, Stock-Based Compensation.