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Date

Thursday, May 7, 2026 at 5:00 p.m. ET

Call participants

  • Chairman and Chief Executive Officer — Jay Jackson
  • Chief Investment Officer — Elena Plesco
  • Chief Financial and Chief Operating Officer — William McCauley
  • Head of Investor Relations — Robert Phillips

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Takeaways

  • Adjusted Net Income Guidance Raised -- Updated full-year 2026 adjusted net income guidance to $100 million–$106 million, up from the prior $96 million–$104 million range; new adjusted EPS range is $1.00–$1.05.
  • Longevity Fundraising -- Raised $288 million into longevity funds during the quarter, above the $275 million brought in during Q4, and nearly matching the $630 million raised in all of 2025.
  • Qualified Policies Reviewed -- Reviewed nearly 9,000 qualified policies in the quarter, compared to under 11,000 for all of the prior year.
  • Q2 2026 Guidance -- Expects adjusted net income of $24 million–$26 million, translating to adjusted EPS of $0.24–$0.26.
  • Operating Cash Flow -- Generated $91.7 million in operating cash flow, compared to negative $61.6 million in the prior year period, representing a swing of over $153 million.
  • Total Revenue -- Reported $59.4 million in total revenue, up 34.6% from the prior year’s $44.1 million.
  • Segment Revenue -- Life Solutions contributed $50.6 million; Asset Management fees reached $8.5 million; Technology Services generated $0.4 million (totals do not sum due to omission of other segment data).
  • Total Operating Expenses -- Incurred operating expenses of $34.8 million (excluding specific accounting impacts), compared to $19.6 million in the year-ago period; increase attributed to higher sales, marketing, G&A, acquisitions, and special projects.
  • Adjusted Net Income – Actual -- Delivered $20.1 million, up 16.6% from the prior year’s $17.3 million, on an adjusted basis.
  • Adjusted EBITDA -- Achieved $32.7 million, a 33.3% increase from $24.5 million in the prior year; adjusted EBITDA margin was 55%, down from 56%.
  • GAAP Net Income -- GAAP net income attributable to shareholders was $7.3 million, or $0.07 per diluted share, up from $4.6 million, or $0.05 per diluted share, an increase of 59%.
  • Adjusted Return Metrics -- Adjusted return on equity was 19%; adjusted return on invested capital was 17%; both improved from the prior year.
  • Balance Sheet Position -- Ended the quarter with $37.2 million in cash, $392.8 million in policy assets, and $330 million in outstanding long-term debt.
  • Fund Term and Debt Reduction -- Concluded the LMA Income II Fund’s initial term, removing approximately $76.7 million in fund-level obligations from the balance sheet and reducing reported debt from $405.8 million to $330 million.
  • Portfolio Turnover -- Annualized portfolio turnover was 1.9x, consistent with the company’s long-term target range of 1.5x–2x.
  • Average Realized Gain -- Achieved a 26% average realized gain, surpassing the 20% benchmark target.
  • Portfolio Characteristics -- For assets seasoned beyond 365 days, weighted average life expectancy was 46 months; weighted average insured age was 88 years (both flat versus last quarter).
  • Capital Deployed -- Deployed $163.6 million in capital for the quarter.
  • Buyback Utilization -- Deployed approximately 50% of the last $20 million Board-approved buyback authorization; significant remaining capacity exists.
  • Debt Capacity -- Recourse debt-to-EBITDA ratio is near 2x, with management indicating capacity up to 4x.
  • Manning & Napier Alliance -- Strategic alliance and distribution agreements in process; early results expected in the next quarter.
  • Securitization Activity -- Targeting a second significant securitization in late Q2 or early Q3 to further capitalize funding flexibility and prove asset credibility.
  • Capital Allocation Approach -- Management continues to focus on both operating capital (supporting the origination engine) and investing capital (returning funds to shareholders, M&A, and platform investment), with flexibility cited as critical.
  • M&A Pipeline -- Evaluating accretive acquisitions mainly in the RIA and technology data platform spaces, prioritizing cultural fit and profitability.

Summary

Management highlighted substantial growth in both capital inflows and qualified policy opportunities, enabling a guidance increase for 2026. The termination and successful wind-down of the LMA Income II Fund led to a notable reduction in reported long-term debt and improved leverage ratios. Disciplined underwriting and operational selectivity yielded portfolio gains well above target, reinforcing the quality of assets under management. New partnerships and capital initiatives, including the pending Manning & Napier alliance and another securitization, are positioned to drive product distribution and funding scale. Investors received proof of model sustainability and confidence as one-third of fund investors extended or reinvested capital at the term close, with remaining capacity in share repurchases and strategic investments underscored.

  • Jackson affirmed that "A lower purchase discount rate in our business is a positive outcome," attributing it directly to rising asset values and expanded long-term spreads on existing contracts.
  • Plesco clarified, "Our business generates the cash flow to fund its own growth, and we intend to keep it that way," emphasizing inorganic capital is only considered for M&A.
  • Jackson noted the target for capital deployed per quarter is typically "$130 million to $150 million," with flexibility to exceed that range if inflows are robust.
  • Approximately one-third of LMA Income II Fund investors opted to extend their investment, and another one-third reinvested in new products after capital was returned at term-end.
  • Management stated that the contribution from wealth advisers is projected to reach 25% of revenue over the next few years, supported by both organic and inorganic growth.
  • Current repurchase activity has used about half the approved authorization, and management is actively weighing the repurchase program against ROI of potential investments and M&A opportunities.
  • Jackson confirmed: "the deals that we're looking at now in our pipeline are accretive even at this pricing," highlighting the focus on transaction quality for upcoming M&A.
  • External leverage remains well below management’s stated 4x EBITDA capacity, suggesting headroom for capital deployment without dilution.

Industry glossary

  • Originations: The process of sourcing and structuring life insurance policy settlements between original policyholders and buyers, often investors.
  • Policy Turnover: The annualized rate at which portfolio policies are traded or monetized, indicating velocity of capital recycling.
  • Purchase Discount Rate: The discount rate applied to life insurance policy purchases reflecting valuation and competitive dynamics in acquiring policies; lower rates denote higher policy prices and, in this model, indicate asset value accretion.
  • Longevity Fund: An investment vehicle focused on acquiring and managing life insurance policies, with returns typically tied to actuarial outcomes.
  • Registered Investment Adviser (RIA): A firm providing investment advice, often managing assets for clients, and regulated under relevant securities laws.
  • Interval Fund: A closed-end fund offering periodic, typically quarterly, share repurchases from investors at NAV, subject to regulatory approval and liquidity constraints.

Full Conference Call Transcript

Robert Phillips: Thank you, operator, and thank you, everyone, for joining Abacus Global Management's first quarter earnings call. Here with me today are Jay Jackson, Chairman and Chief Executive Officer; Elena Plesco, Chief Investment Officer; and Bill McCauley, Chief Financial and Chief Operating Officer. This afternoon at 4:15 p.m. Eastern Time, Abacus Global Management released our first quarter 2026 results. This afternoon's call will allow participants to ask questions about our results. Before we begin, Abacus Global Management refers participants on this call to the Investor web page, ir.abacusgm.com, for the press release, investor information and filings with the SEC for a discussion of the risks that can affect the business.

Abacus Global Management specifically refers participants to the presentation furnished today on Form 8-K with the Securities and Exchange Commission and to remind listeners that some of the comments today may contain forward-looking statements and as such, will be subject to risks and uncertainties, which, if they materialize, could materially affect results. For more information on the risks, uncertainties and assumptions relating to forward-looking statements, please refer to Abacus Global Management's public filings. During the call, we will reference certain non-GAAP financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under U.S. generally accepted accounting principles or GAAP.

Please see our public filings for additional information regarding our non-GAAP financial measures, including references to comparable GAAP measures. With that, I'd now like to turn the call over to Jay Jackson, Abacus Global Management's Chairman and Chief Executive Officer.

Jay Jackson: Thank you, Rob, and good afternoon, everyone. Having had the pleasure of speaking with many of you in the weeks following our fourth quarter earnings call, I will keep my remarks focused and direct. I want to lead with the headline. Based on what we are seeing in the business today, we are raising our full year 2026 adjusted net income guidance from a range of $96 million to $104 million to a new range of $100 million to $106 million, lifting both the low end and the high end of our range. The new range translates into $1 to $1.05 in adjusted EPS. The conviction behind that decision comes from a few drivers we are seeing in real time.

We raised $288 million into our longevity funds this quarter on top of the $275 million in Q4. By way of context, we raised $630 million across all of 2025. The step change in fundraising we saw at year-end has carried cleanly into the new year, and our pipeline continues to grow. In Q1 alone, we reviewed nearly 9,000 qualified policies compared to roughly 11,000 across all of 2025. The flywheel is working exactly as designed. Increased assets under management drives origination and our infrastructure is meeting that demand. That near-term visibility is what gives us the confidence to provide a forward quarter guide alongside our full year range.

For Q2 2026, we expect adjusted net income of $24 million to $26 million or $0.24 to $0.26 in adjusted EPS. I want to spend a moment in the shape of the year because the pace of our growth over the past several years has obscured a normal dynamic in how we operate. Revenue does not flow evenly across quarters. January is typically our lightest month with activity picking up through February and March, then running robustly through spring and summer. August is generally a slower month for both deployment and fundraising before momentum picks back up in the fall and builds through a strong fourth quarter finish. Q1 ANI came in at $20 million.

Q2 is guided to $24 million to $26 million. The back half is historically our strongest, and that is the path to our raised full year range. Bill will walk you through business operations and financial results, and you will see that strength reflected across the metrics that matter. Elena will cover our KPIs and capital allocation. But first, let me set up the 2 dynamics that I believe define this moment for Abacus. The first is the current macro environment and what it means for our asset class. The uncertainty that has characterized Q1 has created a defining moment across the alternatives landscape. Investors are reassessing where they allocate capital.

They are moving toward assets that are genuinely uncorrelated from market sentiment and credit cycles. That is precisely what Abacus offers. Our yield is mortality-driven, not rates driven. That means our returns are structurally uncorrelated. And this quarter, that distinction drove capital to us in a meaningful way. Assets under management grew substantially in Q1, fueled by capital inflows from investors who understand that we are not private credit, we are the alternative to it. Now, I want to address something that is important for investors to understand clearly, the relationship between increased demand and purchase discount rates. As more institutional capital has flowed into the asset class, buyers are competing more aggressively for policies.

That competition means buyers are paying more for each policy, which translates directly into lower purchase discount rates. I want to be emphatic about this. A lower purchase discount rate in our business is a positive outcome. It reflects rising asset values and expanded long-term spreads on the contracts we already hold, and we believe this dynamic will continue through 2026. The second thing I want to highlight is what I consider one of the most important proof points this company has ever delivered, and it happened this quarter. Our LMA Income II Fund reached the end of its initial term. This is a fund we launched 3 years ago that grew to approximately $115 million in assets under management.

At conclusion of its term, we returned capital to every single investor who requested it, 100% on time as promised. Returning investor capital at the end of a fund's term should be the norm. Across the alternatives industry today, it is not. At a moment when restrictions on investor capital have been commonplace, when redemption gates have become accepted norms, Abacus did what we said we would do. And here is what makes it even more meaningful. Approximately 1/3 of those investors chose to extend their investment and another 1/3 reinvested their capital into our new products. This is not just capital retention. That is an affirmation.

Investors who had full optionality evaluated this asset, evaluated these funds and chose to put more capital to work with us. That is the strongest endorsement we can receive. Bill will address the balance sheet impact in detail, but I will note that this event reduces debt on our balance sheet by more than $75 million, further strengthening our capital position as we move through the remainder of the year. Looking ahead, I want to highlight 2 transformational growth opportunities that I believe will define the next chapter for Abacus. The first is our investment in Manning & Napier. This relationship continues to progress with real momentum.

The strategic alliance and distribution agreements are both taking shape, and we are already working to integrate our respective platforms. Manning's existing infrastructure is robust and well suited to support what we are building together. This is not a passive investment. It is a distribution partnership that we expect to materially expand the reach of our products to a broader base of advisers and their clients. We expect early results from that alliance in Q2, and we'll have more to say as that relationship matures. The second is our securitization program. Following the success of our first securitization, we are actively targeting a second significant securitization in late Q2 or early Q3. Securitization is a powerful tool for us.

It allows us to recycle capital efficiently, diversify our funding sources and demonstrate to institutional markets the quality and consistency of the assets we originate. A second transaction in this time frame would represent a meaningful acceleration of that program and further validate the institutional credibility of this asset class. We will provide updates as that process advances. With that, I will turn it over to Bill.

William McCauley: Thanks, Jay. I want to cover 2 things. First, how the business operated during the quarter; and second, what our financial results reflect about the momentum Jay described. Then I'll turn it over to Elena for KPIs and capital allocation. Jay covered the headline drivers for the quarter. I want to get into the operational detail underneath them. The deployment volume Jay referenced ran through an origination process that remained highly selective. We reviewed a substantial number of qualified policies in Q1 and closed at a rate consistent with our historical standards. We did not relax underwriting to meet demand. The higher inbound flow simply gave us more to choose from.

Elena will take you through the specific metrics, but the headline is that volume went up and quality held. The most direct evidence of how the operational pieces came together this quarter is the cash flow statement. We generated $91.7 million in operating cash flow in Q1 2026 compared to negative $61.6 million in Q1 2025, a swing of more than $153 million year-over-year. That reflects 3 things converging at once: policies on our balance sheet, generating cash through trading and maturities, the LMA Income II Fund completing its initial term and releasing capital and the underlying operating leverage of the platform as we scale revenue without a commensurate increase in cash costs.

Cash conversion is the ultimate test of whether the model is working and Q1 passed that test decisively. On the portfolio, the short version is that quality and margin are both tracking ahead of target. Realized gains for the quarter exceeded our 20% long-term benchmark, and our seasoned assets continue to appreciate in line with actuarial expectations. Elena will walk through the detailed KPIs of turnover, weighted average life expectancy and insured age, but the directional read is clean across the board. On LMA Income II, Jay described the fund outcome and what it means for investor confidence. I want to add the financial reporting dimension.

Because of the fund's initial structure, we were required under GAAP to consolidate it as debt on our balance sheet. With the conclusion of the fund's initial term this quarter, that obligation unwinds. The result is a reduction in reported balance sheet debt of more than $75 million. I want to be precise about this. It is not a corporate deleveraging event. It is the reduction of a fund level consolidation from our balance sheet. The practical effect is that our reported leverage ratios improved significantly without any change in our underlying capital structure. I will address the specific metrics next in the financial section. Turning to our financial results.

Total revenue in the first quarter grew 34.6% to $59.4 million compared to $44.1 million in the prior year period. Growth was primarily driven by strong performance in Life Solutions, which generated $50.6 million, along with continued expansion in asset management fees, which reached $8.5 million, reflecting the growth in fee-paying AUM across our longevity fund strategies. Technology Services contributed $0.4 million, consistent with our continued early-stage build-out of that segment. Turning to expenses. Total operating expenses for the first quarter were approximately $34.8 million compared to $19.6 million in the prior year when excluding the impact of gain on change in fair value of debt and gain on equity securities.

The year-over-year increase was primarily driven by higher sales and marketing spend in support of our distribution build-out, along with increased G&A expenses associated with our platform investments, business acquisition and special project expenses. These are deliberate investments in the growth profile of the business. On an adjusted basis, excluding noncash stock compensation, business acquisition and special project costs, amortization and changes in the fair value of investments, adjusted net income for the first quarter grew by 16.6% to $20.1 million compared to $17.3 million in the prior year. Adjusted EBITDA for the quarter grew 33.3% to $32.7 million compared to $24.5 million in the prior year.

Adjusted EBITDA margin was 55% for the quarter compared to 56% in the prior year. We are committed to growing the business responsibly, which is demonstrated by our ability to grow revenue and EBITDA by over 30% while sustaining margins in that range. GAAP net income attributable to Abacus Global Management for the quarter was $7.3 million or $0.07 per diluted share compared to $4.6 million or $0.05 per diluted share in the prior year period, representing growth of 59%. Turning to our balance sheet. For Q1, adjusted return on equity was 19% and adjusted return on invested capital was 17%, both improvements from Q1 2025.

As of March 31, 2026, the company had cash of $37.2 million, balance sheet policy assets of $392.8 million, and outstanding long-term debt of approximately $330 million. The reduction in reported debt from $405.8 million at year-end reflects the conclusion of the initial term for the LMA Income II Fund I described earlier, which removed approximately $76.7 million in fund level reporting obligations from our balance sheet. In summary, we are very pleased with our strong start to 2026. We delivered meaningful top line growth, sustained profitability and strengthened our balance sheet, all while continuing to invest in the platform initiatives that will drive the next chapter of this company's growth. With that, I'll turn it over to Elena.

Elena Plesco: Thanks, Bill. I want to use my time today to walk through 2 things: how our balance sheet performed during the quarter and how we think about capital allocation at Abacus. Turning to the performance of our balance sheet. For Q1, our annualized portfolio turnover was 1.9x, in line with our long-term target of 1.5x to 2x. Our average realized gain was 26% for the quarter. These margins reflect rigorous origination, precise actuarial targets and patience, exceeding our target of 20%. Portfolio quality continues to be strong. Assets seasoned beyond 365 days had a weighted average life expectancy of 46 months and a weighted average insured age of 88 years compared to 45 months and 88 years last quarter.

These positions reflect conviction in our underwriting, and we expect them to generate attractive returns as they continue to season. During Q1, we deployed $163.6 million in capital off our balance sheet. Our origination platform reviewed more than 9,000 qualified policies during the quarter, and we remain highly selective. This metric underpins the depth of our pipeline as last year, we have reviewed a little under 11,000 policies total. I want to spend the balance of my time on how we think about capital allocation because I believe it's one of the most important things for our shareholders to understand about this business. We think about capital allocation in 2 categories: operating and investing.

Operating capital supports the day-to-day engine of the business. That means purchasing policies, acquiring other operating assets and funding organic growth across our platform. Investing capital is effectively everything else, returning capital to shareholders through dividends and buybacks, pursuing strategic M&A and supporting the growth of our asset management business, whether that means seeding new fund strategies, supporting our securitization program or providing the infrastructure for AUM expansion. These are not competing priorities. They are sequenced deliberately, and our goal is to ensure we always have the flexibility to do both well. When we look at where our capital comes from, the starting point is our balance sheet.

We view our active balance sheet, our managed assets, as approximately $450 million in cash and liquid assets that we convert into cash in short order through our normal origination to monetization cycle. That is the core funding mechanism of the business, and it is self-sustaining. We do not need incremental balance sheet capital to grow our core Life Solutions business. Beyond that, we have 2 external levers, debt and equity. On debt, we're currently meaningfully under-levered. Our recourse debt-to-EBITDA ratio stands at around 2x compared to capacity, we believe extends to 4x. That gives us significant incremental borrowing ability to deploy into high-returning opportunities without diluting shareholders.

On equities, we're not looking to raise primary capital outside of any potential M&A activity. Our business generates the cash flow to fund its own growth, and we intend to keep it that way. When I step back and look at the business today, the story is straightforward. We have a core origination engine in Life Solutions that continues to perform at a high level, supported by disciplined underwriting and consistent monetization. On top of that, we're building a scalable asset management platform designed to generate growing fee-related earnings for our longevity funds, our ETFs, our asset-based finance strategy and continued expansion of our distribution capability.

Since inception, the new vintage of longevity funds has attracted nearly $1 billion in investor capital. Growing fee-related earnings remains a central priority. As we scale fee-paying assets across our strategies, we generate contractual high-margin management fee income without requiring additional balance sheet capital. And our capital allocation framework is designed to ensure that every dollar we deploy, whether into operations or investments is building toward that outcome. We're executing on this deliberately step-by-step with a long-term perspective. And we believe that approach will continue to create value for our shareholders. With that, I'll turn it over to Jay for closing remarks.

Jay Jackson: As I reflect on this quarter, what stands out is not any single result, but the convergence of everything we have been building toward. Capital is flowing into this asset class because investors are seeking exactly what we provide: consistent, predictable, uncorrelated returns. Our operational infrastructure is meeting that demand. Our funds are performing, and our strategic initiatives are positioning us to capture a much larger share of the opportunity in front of us. The foundation is strong and the trajectory is clear. These initiatives represent the kind of strategic scaling that moves the company from small cap to mid-cap. We are executing with both urgency and conviction.

I want to thank our investors for their continued confidence, our team for their exceptional execution this quarter and our partners for their commitment to what we are building. We look forward to updating you on our progress and delivering on the opportunity this moment represents. We will now turn it over to the operator for any questions.

Operator: [Operator Instructions] Our first question will come from Patrick Davitt with Autonomous Research.

Patrick Davitt: First on flows. Since you say in the release that the second securitization could slip into 3Q, if that did fall in 2Q, would that be incremental to the $500 million first half inflow expectation?

Jay Jackson: Patrick, yes, that would be in addition to that $500 million.

Patrick Davitt: Okay. Great. And could you update us on where we are in the SEC process for the interval fund?

Jay Jackson: Sure. Thanks for asking. We've been working diligently with the SEC. And while we can't specifically state where and how their specific process timing is, we feel good about potentially being able to make an announcement in Q2.

Operator: Our next question will come from Andrew Kligerman with TD Cowen.

Andrew Kligerman: Looking at your Slide 11, I thought that was pretty interesting. So it implies that wealth advisers would move from 0 to about 25% of revenue over the next few years. Could you walk us through kind of like a little road map as to how you get to 25% of revenue? Is it Manning & Napier? Is it existing advisers? Do you expect a fair amount of deals? Just curious as to the road map there on that.

Jay Jackson: Thanks for asking that, Andrew, and great to hear from you. Yes, our road map to the financial advisory/really private wealth division is really consistent with the premise that it's the build it or buy it. And we have a number of opportunities that we think will come to fruition and help us meet those targets. The Manning & Napier initial investment here, I think, made a ton of sense for us to demonstrate and show the synergies that we've talked about between sourcing contracts, sending them and processing potentially lead gen for them, and then kind of operating those synergies with additional cash flow from both entities.

And we're already seeing some success there and very close to kind of finalizing our strategic alliance agreement and the go-forward agreement. And we have a number of additional opportunities in place of registered investment advisers that I think are seeking that same type of partnership, whether that's in a minority position or a full position, full acquisition. And so we're really excited about the pipeline for that. I think we'll see more of that through year-end and certainly more heavily into '27.

Andrew Kligerman: Got it. Makes a lot of sense. And then just looking at Slide 27, I thought it was a nice trend to see the days held on the sold policies increased really significantly to 290, which maybe you could share with us the kinds of gains that you have by holding that for quite a bit of time. And then on the flip side, the days held on the owned policies kind of decreased meaningfully to 209. So what are you thinking about both of those metrics as we move forward? Are they right in the band where they should be? Or do you see one of them moving up or down? What are your thoughts going forward?

Jay Jackson: Thank you. And I think you nailed it on the last part of the question was that we believe we're in kind of the band where we target. If you look at kind of historically where that's been at, whether it's days held and/or days held via transactions, we're finding a little bit of a sweet spot there. And there was -- in the prior quarter, we saw a little bit of shift where we had taken advantage of some contracts that were very opportunistic and moved a larger percentage of those.

But I think historically, where we're trading at right now is kind of where you should see those numbers start to kind of think about modeling going forward, right? I think in the quarter, we were somewhere around 1.9x to 2x on an annual basis related to our book turnover. And I think that's reflective of the opportunities we see in the market. One of the things I'll highlight, though, is that we are seeing significant increased demand for the underlying asset, driven by certainly uncorrelated nature.

But if you consider some of the volatility that we've seen in other kind of adjacent asset classes, if you will, this opportunity, I think, in this asset class has certainly been more appealing to institutional investors who are looking for maybe a little bit less yield, but they want that uncorrelated stability nature that these policies represent.

Operator: Our next question will come from Mike Grondahl with Northland Securities.

Mike Grondahl: I just wanted to ask about the 9,000 policies you reviewed in 1Q '26 versus the 11,000 in 2025. Would you say that's all organic growth, all inbound? Any extra marketing or anything to drive that?

Jay Jackson: Sure. Thanks, Mike. It's a very astute pickup. Yes, it is organic. It's also, I would argue, a bit opportunistic from our perspective. And then we're seeing opportunities out there as we continue to have demand and increased capital related to our own funds and certainly other funds, that's driving up supply. And I think what I'm really trying to highlight there is that as we continue to raise capital on our funds, securitizations and some of these other products, sometimes that leads to the question of do we have the policies to support that demand. And I think clear evidence shows in Q1, we do. And some of that's carrying over into Q2, and we're excited about that.

So that is organic. We're not necessarily turning up the advertising budget. I think the budget year-over-year was fairly stable in Q1. But instead, I also believe that the work of '25, where we did increase our budget, right, particularly Q3, Q4, you start to see that paying off in Q1 and Q2 and Q3.

Mike Grondahl: Got it. And then you talked about rising asset value and the demand for those policies resulting in that lower purchase discount rate. Can you quantify that for us a little bit, Jay? Like, is that worth a point or 2? Or how do we measure that or get a sense?

Jay Jackson: Sure. I think the best way to think about it, right, is when you look at the slide related to our gross trade spread margin, right? When you see that number, I think we're plus or minus around 26% for the quarter. That's the best way to quantify it. So even though you might see demand increase, which in most markets, when you have demand increase driving prices up, you would historically see those discount rates or the forecasted purchase rates compressing. In our case, what we're stating is that can actually be a good event for us, right? Because prices go up, we sell at a higher price and that demand then drives additional revenue.

And my point is I believe we're going to see more of that, right? When you just look at the cash flows into our owned funds, but then demand from investors who are seeking capital sources that, again, are less volatile and correlated, those kinds of attributes, it becomes a positive outcome for us. So to be specific, if you were to kind of quantify this to kind of a percentage point, I think that's a bit of a challenge because we'll see that happen in any given quarter. But my point is that whether it's 100 basis points or 200 basis points, it's ultimately a positive outcome for us.

Operator: Our next question will come from Crispin Love with Piper Sandler.

Benjamin Graham: This is Ben Graham in for Crispin Love. I'm just wondering if you could share a little bit more about your current thoughts on M&A, just specifically what types of assets you're most interested in currently? And basically, would it be more on the RIA side, technology or some other areas?

Jay Jackson: Yes, sure. Great question. The pipeline is fairly robust right now. And the areas that we're most interested in, you nailed it on the RIA side. We think that there are some very interesting opportunities there. And for us, we're also super selective. We want to make sure that this is the type of platform that meets our expectations culturally, that is profitable. And most importantly, and I think this is the biggest takeaway for any of our M&A, it's got to be accretive. right? It's super important that these opportunities are accretive to us both from an EPS basis, but in addition to that, accretive in relationship to our synergies.

We want to show that this is the type of acquisition that's going to help grow the business into '27, '28 because I think that's what our shareholders want us to do. So we're very disciplined in that. We want accretive businesses. When we look at our technology platforms, we're still developing, I think, some very exciting things in-house that in the next probably 60 days, we're going to start announcing certainly at our Investor Day, we're going to roll some of those out that are going to fundamentally have a significant transformative shift in private wealth management.

And those types of programs where we're incorporating lifespan into financial planning is starting to happen in real time and adopting different AI platforms to assist with that to accelerate that process is all happening in real time. So if we're looking at technology-type platforms, it's the type of platforms that can provide data and information to our clients that is incredibly useful for a customized solution of whether it's insurance or financial planning, but all related to their longevity data. I just spoke to the Milken Institute on this. And this was a huge, huge talking point because there's $1 trillion of wealth transferring. Our point is, wouldn't the world like to know when that's going to transfer.

And you can know that better if you better understand the longevity and lifespan data behind it. So those companies are super interesting to us.

Benjamin Graham: Awesome. And then just briefly on the carrier buyback program. I'm just wondering if there's anything new to call out here, new announcements, expectations for the year? And just if anything's baked into the guide there?

Jay Jackson: There still continues to be a very high level of interest and structure that we're working directly with carriers on. I think in addition to the buyback, we're also working and speaking with carriers about new product issuance related to our underwriting. So it's amazing how this is really coming full circle in our partnerships and strategic partnerships with carriers as well as reinsurance companies. And when I talk about structure in relationship to a buyback, there's some structural advantages that we're working through with some of our carrier partners that can actually make that buyback more affordable as well as easier to execute on. So we're continuing that program through 2026.

And we're also, in addition to that, adding to some of our carrier relationships, even potentially new product sales.

Operator: Our next question will come from Timothy D'Agostino with B. Riley Securities.

Timothy D'Agostino: I joined a bit late here, so apologies if anything is repeated. Looking at capital deployed for policy originations on Slide 26, that number for 1Q continues or was ahead again of what we were forecasting. I guess trying to understand in 2025 in the beginning part, it was about $120 million. At these current levels of $230 million in the fourth quarter and $163 million in the first quarter, are you comfortable with this kind of being the run rate? Or are you taking advantage of opportunities?

Jay Jackson: Great question. And yes, certainly opportunistic. But I would also add that we had capital demand to meet that capital deployment. Now, if we're modeling to what we think a closer range will be, we have a couple of analysts who have tracked us at a really high number, which isn't necessarily the right way to think about it either. I think where we're tracking is in that [ $130 million to $150 million ] range and certainly had a really nice quarter in Q1.

The one kind of KPI we take into consideration is that you could see that number increase over $150 million like we did in Q1, if you see our capital -- gross capital inflows higher, right? So the way that I would think about it is that, that number can be correlated to the amount of demand and capital that we have to put to work. And so I'm hesitant to come out and say, "Oh, model this at [ $200 million" ] because in any given quarter, as I have highlighted, that could change a little bit. And so we're much more comfortable in this kind of guiding to that $130 million to $150 million number.

And then if we surpass that by a little bit like we did in Q1, that's great. That's always our target is to exceed expectations. It's also why we raised our guidance. right? We kind of tried to put an indicator out there that says, look, we feel pretty good about what's going to happen in the remainder of '26, including capital deployed. We're comfortable in maybe the higher range of the $130 million to $150 million, and therefore, we'll increase our guidance to reflect that.

Timothy D'Agostino: Okay. Great. And then if I can ask a second question on AUM, relatively flat quarter-over-quarter. I understand it's a short period just the first quarter. But as we look at the 2028 guide of $30 billion of AUM, I guess, could you walk us through again how much of that is coming from like organically and how much is inorganic?

Jay Jackson: Yes. The purpose there is to get pretty close to like a 50-50 number as we get out to 2028 on organic versus inorganic. And the inorganic would be acquisition and whether that's through some very exciting opportunities on the asset management side in addition to the private wealth side, as I've spoken about before. So that's the way that we're mapping that. We see more of that taking place as we come into '27. But based upon some of the opportunities we have in our pipeline, I will tell you that we believe we're tracking at that number.

Operator: Our next question will come from Patrick Davitt with Autonomous Research.

Patrick Davitt: I don't think I saw it in the materials, but how much is left on the repurchase authorization? And through the lens of this M&A conversation, could you update us on how you're thinking about the stock here and repurchases from here?

Jay Jackson: Sure. Thank you, Patrick. We've deployed plus or minus around 50% of the last $20 million Board-approved buyback. So we still have, I think, some -- a decent amount of powder left to execute on. And we look closely at that. I mean, what you touched on is really important because we look at where we sit on a multiple basis based upon where our earnings are, our kind of consistent performance here, certainly in relationship to our recent -- we just announced we're raising again our EPS targets for '26 and then forecasted into the '27, '28. So when we look at would we consider more stock repurchase, the answer is yes.

I think that we still very much see the pricing of our stock is a very discounted price. And when we measure that against what -- where we may deploy other assets, right, we're looking at ROICs and ROEs in the high teens, low 20s. And we think that even based upon price targets from our analysts that, that is -- we're currently trading at a pretty significant discount to that. So buybacks are still very much what we believe is an important piece to -- of our kind of things that we might deploy. When that is related to M&A, you're right, right? The stock price is important to that.

And I think that in most M&A transactions, a percentage of that is related to the stock. And I think what's interesting to me is that the deals that we're looking at now in our pipeline are accretive even at this pricing. And so imagine if we pick up another 10%, 15%, 20%, 30% in stock valuation, these deals even become more accretive. And so when we're looking at a deal now, we're assuming in that M&A that, hey, this is at a very favorable stock price. Is this deal still accretive? As the stock price continues to carry some upward momentum, these deals will look even better.

So we're -- we think we're in a great spot on the M&A side.

Operator: This concludes our question-and-answer session. I would now like to turn the meeting back over to Jay Jackson for any additional or closing remarks.

Jay Jackson: Thank you. Again, we just want to express our gratitude to our partners, our analysts, our shareholders and certainly, each and every one of our employees where nearly all of them are shareholders. I think it speaks volumes into the production of our company and our ability to continue to meet these consistent goals that we have set out. We raised our targets in 2026. Our expectations are we're going to continue to push through those through '27 and through '28, and we're tracking to our $250 million EBITDA of '28. And so we are grateful and thankful for all of you to be on our journey together and look forward to our next call.

Operator: Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.