Earnings call transcript: Abacus Life Q3 2025 sees revenue soar 124%

Abacus Life Inc. reported strong financial results for Q3 2025, with total revenue climbing 124% to $63 million. The company also saw a 60% rise in adjusted net income, reaching $23.6 million. Despite this robust performance, Abacus Life's stock price remained stable in aftermarket trading, declining slightly by 0.19% to $5.29. The company has raised its full-year adjusted net income guidance to between $80 and $84 million, representing a growth of 72% to 81%.

Key Takeaways

• Revenue surged 124% year-over-year, reaching $63 million.
• Adjusted net income increased by 60% to $23.6 million.
• The company initiated a $0.20 annual dividend and a $10 million share repurchase program.
• Abacus Life completed its first $50 million securitization of life insurance assets.
• The stock price remained largely unchanged in aftermarket trading.

Company Performance

Abacus Life demonstrated remarkable growth in Q3 2025, significantly outperforming its peers in the alternative asset management sector. The company's revenue growth rate of 124% is notably higher than the industry average of 20% to 30%. This performance is driven by strategic acquisitions, such as the purchase of AccuQuote, and the successful launch of new financial products and services.

Financial Highlights

• Revenue: $63 million, up 124% year-over-year.
• Adjusted net income: $23.6 million, up 60% year-over-year.
• Adjusted EBITDA: $37.9 million, up 127% year-over-year.
• Annualized adjusted return on equity: 22%.
• Annualized adjusted return on invested capital: 21%.

Outlook & Guidance

Abacus Life has revised its full-year adjusted net income guidance upwards to between $80 and $84 million, indicating strong growth expectations. The company plans to increase the frequency of its life insurance asset securitizations and expand its wealth advisory and technology services. Abacus Life is also targeting significant growth in institutional investor demand and aims to track over 3 million lives by the end of Q4 2025.

Executive Commentary

"Our results continue to speak for themselves: record profitability, consistent growth, and expanding market recognition," said Jay Jackson, CEO of Abacus Life. He emphasized the company's disciplined execution in the longevity-based investing sector, highlighting the significant ownership of company stock by employees as a testament to their commitment.

Risks and Challenges

• Market volatility: The company's reliance on longevity-based assets, while uncorrelated to traditional markets, could still face challenges from broader economic conditions.
• Integration risks: The recent acquisition of AccuQuote may present integration challenges.
• Regulatory changes: Potential changes in financial regulations could impact operations.
• Competitive pressure: Maintaining its growth momentum in a competitive market is crucial.
• Investor sentiment: Any deviation from projected financial targets could affect investor confidence.

Q&A

During the earnings call, analysts inquired about the structure of the securitization and the level of interest from institutional investors. The company's marketing investment and origination strategy were also discussed, along with its dividend and capital allocation philosophy. Executives elaborated on the potential synergies from the AccuQuote acquisition, highlighting the strategic benefits expected from this move.

Full transcript - Abacus Life Inc (ABL) Q3 2025:

Operator: Good day, and welcome to the Abacus Global Management third quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Rob Phillips, Abacus Global Management Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Rob Phillips, Senior Vice President of Investor Relations and Corporate Affairs, Abacus Global Management: Thank you, Operator, and thank you, everyone, for joining Abacus Global Management's third quarter 2025 earnings call. Here with me today are Jay Jackson, Chairman and Chief Executive Officer; Elena Plesco, Chief Capital Officer; and Bill McCauley, Chief Financial Officer. This afternoon at 4:05 P.M. Eastern Time, Abacus Global Management released its third quarter 2025 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 webpage, ir-abacusgm.com, for the press release, investor information, and filings with the U.S. SEC for a discussion of the risks and uncertainties that can affect the business.

Abacus Global Management specifically refers participants to the presentation furnished today on Form 8-K with the U.S. 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, Chief Executive Officer.

Jay Jackson, Chairman and Chief Executive Officer, Abacus Global Management: Thank you, and good afternoon, everyone. I'm pleased to report that Abacus delivered another record quarter, our 10th consecutive quarter of beating consensus projections, keeping us firmly on track with our long-term growth targets. Our third quarter results were just as impressive. Total revenue increased 124% year-over-year to $63 million. Adjusted net income rose 60% to $23.6 million, and adjusted EBITDA increased 127% to $37.9 million. Due to these strong Q3 results, we are once again in a position to increase our 2025 guidance to $80-$84 million, resulting in a year-over-year growth of 72%-81% for 2025. I want to highlight an important inflection point for Abacus that further reinforces our commitment to long-term shareholder value creation. Earlier today, we announced the initiation of an annual dividend of $0.20 per share and a $10 million share repurchase program.

These actions represent a defining moment for Abacus, underscoring both our confidence in the strategy and its validation as we continue building durable, recurring earnings. Our balance sheet and cash generation are at record levels, supported by increasing capital inflows into our longevity funds, growing fee income, and expanding margins. As stated in the release, we have the capital strength to fund ongoing growth through new originations, accretive acquisitions, and technology investment, while also returning capital to shareholders. I'm incredibly proud of what our team has built and the position of strength their unwavering dedication has created for Abacus. The introduction of a dividend and buyback is not a shift in strategy, but a natural evolution of it. With recurring revenues expected to approach 70% of total revenue over time, our capital allocation framework is designed to balance growth investment with consistent shareholder returns.

Importantly, these actions also further align Abacus with leading public alternative asset managers, many of whom have long demonstrated that recurring fee-based earnings can support both strong growth and meaningful capital returns. This disciplined approach ensures we continue to scale our platform, strengthen our market position, and allow shareholders to directly benefit from the visibility and sustainability of our earnings. I think it's important to take a moment and reflect on where Abacus stands relative to our public asset manager peer group. The numbers tell a clear story, one that I believe deserves your close attention. When we look across our peer group of publicly traded alternative asset managers, Abacus's performance continues to stand out across key financial metrics. We lead our public peer group in year-over-year revenue growth by five times. Abacus has revenue of 124% year-over-year.

By comparison, other public alternative managers reported average year-over-year revenue growth between 20% and 30% during the same period. These aren't projections or aspirations. These are results we're delivering today, quarter after quarter, demonstrating both our market leadership and the depth of our growth opportunity. Abacus's growth trajectory remains the strongest in the asset manager industry and is expected to continue outpacing public peers, driven by disciplined execution, strong origination, and increasing investor demand for uncorrelated returns. The company's accelerating fundamentals, combined with increasing visibility, highlight a clear path towards sustained value creation that sets Abacus apart. When we look at the broader valuation picture, the disconnect becomes more pronounced. The average publicly traded alternative asset manager trades at roughly 20 times projected 2025 earnings. Abacus trades in the mid-single digits. This disconnect represents a deep discount to our peer group and an opportunity for investors.

While valuation comparisons have their limits, the combination of strong fundamentals, consistent execution, and short-term share price dislocation reflects a familiar dynamic. One that historically corrects itself in favor of fundamentals. At Abacus, we are continuing to diversify our revenue with increased assets under management. Year to date, we have raised $468 million across all of our fund strategies, and Q3 inflows represented $102 million. We are committed to increasing our AUM and generating a greater portion of our total revenue from recurring fee-based revenue, which naturally commands higher valuations. Now, let me be direct. I take responsibility for ensuring the market fully understands this evolution. While we're executing operationally and consistently exceeding expectations, we have more work to do to communicate the depth of our business model and the durability of our results.

Beginning with last quarter's results, we introduced new KPIs specifically to simplify our message and to make the Abacus story more transparent and accessible. We're committed to clear, consistent communication that helps investors understand what drives our business and how we measure success together. We also made significant strides in expanding our investor outreach program. Between now and the end of 2025, we continuing into 2026, you'll see Abacus represented at more conferences, more speaking engagements, and increased visibility through television and media advertising. Our management team remains fully accessible and engaged across both institutional and retail channels, prioritizing transparency and long-term relationship building. We're also advancing strategic, accretive acquisitions that enhance our competitive position and broaden both our origination and global wealth platforms. The recently announced acquisition of AccuQuote is a clear example.

AccuQuote, a premier online life insurance brokerage, provides customers with quotes from multiple insurance providers through a single digital platform. This transaction is strategically and financially accretive, adding a new digital origination funnel, expanding our client lifecycle coverage, and supporting accelerating growth in policy origination and asset acquisition volumes. Near-term, AccuQuote contributes modestly to revenue and profit. Over the long term, it will serve as a scalable growth engine feeding directly into our underwriting and asset management businesses. Our strong free cash generation and high returns on invested capital give us the flexibility to continue funding strategic initiatives while returning capital to shareholders. Let me address the current market environment. Our longevity-based assets are fundamentally uncorrelated to traditional markets. Their performance is driven by actuarial and demographic trends, not market sentiment or interest rate cycles. This structural differentiation provides consistent, non-correlated exposure at a time when diversification is most needed.

To that point, we achieved a major milestone following quarter-end with a $50 million above investment-grade securitization product note backed by life insurance assets sold to institutional investors, insurance companies, and banks. This transaction marks the beginning of a scalable and reoccurring funding mechanism while validating the strong institutional demand for longevity-linked, less correlated assets. It also reinforces Abacus's position as the market leader in a highly regulated industry, supported by favorable demographic trends expected to persist for decades. We view this transaction as the first of many as we continue building the infrastructure to make it a repeatable and scalable component of our long-term funding strategy, lowering our cost of capital, expanding our distribution channels to banks and insurance investors, converting balance sheet assets into recurring service and fee-based income, and further enhancing profitability and return on equity. To summarize, the financial performance is clear.

10 consecutive quarters of strong earnings growth, industry-leading returns on capital, expanding recurring revenue, and a defined path towards greater visibility and scale. Our focus remains on translating these fundamentals into long-term shareholder value. With that, I'll now turn the call over to Elena Plesco, our Chief Capital Officer, to discuss our key performance indicators and capital structure in more detail.

Elena Plesco, Chief Capital Officer, Abacus Global Management: Thanks, Jay. I'd like to highlight some recent strategic milestones and then discuss our balance sheet efficiency metrics and KPIs. As Jay mentioned, we announced a significant milestone on October 22nd. We successfully sold $50 million of securitized life insurance assets structured as an investment-grade rated collateralized note with a mid-single digit yield. This transaction represents a strategic breakthrough for Abacus on multiple fronts. First, it establishes a new institutional distribution channel that complements our existing monetization pathways, allowing us to access a broader universe of capital providers, including banks, insurance companies, and fixed-income investors who typically require rated structures. Second, it validates our underwriting and portfolio construction capabilities. Specifically, the ability to secure an investment-grade rating demonstrates that our credit and actuarial processes meet institutional standards. Third.

This transaction creates a scalable template for future executions, potentially improving our overall capital efficiency as we develop a track record in the securitized products market. Finally, by demonstrating that life insurance assets can be packaged into rated instruments with mid-single digit yields, we're effectively expanding the addressable market for these assets and reinforcing Abacus's position as a leader in bringing institutional-grade structures to the longevity space. This is not just a one-time financing event. It's a proof of concept that opens up significant optionality for how we think about asset monetization and balance sheet management going forward. Now, turning to our operational metrics. Last quarter, we stated that our long-term target for portfolio turnover is one and a half to two times. For Q3 2025, our annualized turnover ratio was 2X. In line with expectations.

Another key indicator of our balance sheet management efficiency is our ability to monetize seasoned policies at optimal timing. In the third quarter of 2025, policies we sold had been held on our balance sheet for an average of 363 days, compared to 253 days for policies still owned, underscoring our ability to efficiently rotate mature inventory while preserving overall portfolio quality. This 110-day delta for sold policies validates our proactive approach of realizing gains on well-seasoned positions rather than engaging in reactive selling. This metric clearly demonstrates that we're managing the balance sheet strategically rather than simply churning newer acquisitions. As we've discussed previously, some assets spend a longer period on our balance sheet. Those are our best ideas. At the end of Q3 2025, 19.6% of our total portfolio value, including cash, was held for over 365 days.

These seasoned holdings maintain a weighted average grade reflective of their low risk and strong credit profile, weighted average life expectancy of 49 months, and weighted average age of 86 years, underscoring the quality of our long-term hold decisions. This concentration in our best ideas reflects our disciplined approach to portfolio construction and our confidence in our underwriting capabilities. Finally, while portfolio turnover demonstrates capital efficiency, profitability of our sales is equally important, measured by the difference between what Abacus paid to originate a policy and the actual sales price received. Our average realized gain on sale for Q3 2025 was 36.9%. As you can see, this quarter, we have been able to resell inventory that we have purchased a year ago during a different interest rate environment, validating our strategic balance sheet management approach and rigorous cost discipline through our operations. With that.

I'll now hand it over to our CFO, Bill McCauley, to discuss the specifics of our third quarter results.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Thanks, Elena. Hello, everyone. As Jay mentioned, we delivered another outstanding quarter of revenue growth and profitability. Total revenue in the third quarter grew 124% to $63 million, compared to $28.1 million in the prior year. This growth was driven by strong Life Solutions performance, increased asset management fees, and contributions from our technology services business. Our Life Solutions segment continues to benefit from our highly efficient origination platform and active trading division. Capital deployed increased 10% to $102.4 million in Q3, compared to $93.2 million last year. Beyond deployment, we had another strong quarter with regards to realized gains. Realized gains for Q3 2025 were $46.4 million, which was primarily driven by the sale of 282 policies to 17 different counterparties. As of September 30, we hold 522 policies valued at $424.7 million on our balance sheet.

Based on historical track record, we expect to monetize these assets within approximately six months, with spreads averaging above 20%. We continue to be pleased with our asset management segment, which is now in its third full quarter following the Q4 2024 acquisitions. This business generated $8.6 million in revenue during Q3 and had $102 million of new inflows, demonstrating the value of our strategic M&A activity. Turning to expenses, total operating expenses, excluding unrealized and realized gains and losses on investments and the change in fair value of debt, was $32.9 million, compared to $19.4 million in the prior year. This increase reflects operating expenses of our acquired companies, increased G&A, higher depreciation and amortization, and strategic marketing investments to support our growth trajectory. We typically see returns on marketing spend within 90-120 days.

On an adjusted basis, excluding non-cash stock compensation, business acquisition costs, amortization, and changes in warrant liability fair value, net income was $23.6 million, compared to $14.7 million last year. Adjusted EBITDA grew 127% to $37.9 million versus $16.7 million in the prior year, with margins of 60.2%, consistent with the comparable period. GAAP net income attributable to stockholders was $7.1 million, compared to a net loss of $5.1 million in the prior year. This improvement was driven by higher revenues across all segments, which is partially offset by increased operating costs and interest expense. Our balance sheet metrics continue to reflect our highly profitable business model. Annualized adjusted return on equity was 22%, and annualized adjusted return on invested capital was 21% for the quarter. As of September 30th, we held $86.4 million in cash and cash equivalents and $424.7 million in balance sheet policy assets.

As Jay mentioned in his opening remarks, given our strong performance through September, we are raising our full-year adjusted net income guidance on a gross basis to a range of $80 million-$84 million, up from our prior range of $74 million-$80 million. This represents growth of 72%-81%, compared to 2024 adjusted net income of $46.5 million. In summary, we continue to deliver record revenue growth while significantly expanding profitability on an adjusted basis. Our diversified business model is performing well across all segments, and we're well positioned for continued success. I'll now turn it back to our CEO, Jay Jackson, for closing comments.

Jay Jackson, Chairman and Chief Executive Officer, Abacus Global Management: Thanks, Bill. Before I turn the call back to the operator for your questions, I want to close by reinforcing what makes Abacus unique. We are executing with discipline and purpose in one of the most compelling corners of alternative asset management, longevity-based investing. Our results continue to speak for themselves: record profitability, consistent growth, and expanding market recognition. At a time when investors are seeking stability and true diversification, Abacus stands apart, offering uncorrelated assets, scalable returns, and a platform designed for sustained value creation. The disconnect between our fundamentals and our current valuation is clear. It also represents one of our greatest opportunities. We're addressing that gap head-on through transparent communication, active investor engagement, and continued execution across every part of our business.

Further to this point, our dividend and buybacks send a clear message: we have the strength, the cash flow, and the conviction to invest in growth while directly returning value to shareholders. As we look ahead, our focus remains unchanged: deliver strong financial performance, deepen institutional adoption of longevity-based assets, and create enduring value for our shareholders. I'm proud of what our team has accomplished, and I'm even more excited about where we're headed. With that, we want to thank you for joining our call today and look forward to your questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we'll pause momentarily to assemble our roster. The first question today comes from Patrick Davis with Autonomous Research. Please go ahead.

Patrick Davis, Analyst, Autonomous Research: Hey, good evening, everyone. First, I have a few questions on the securitization. Firstly, are there any incremental economics for you other than just the gain on sale, like a structuring fee or a transaction fee? Secondly, could you give us an idea of how many large institutions participated and what portion of those were new to the asset class? Finally, is there an opportunity to package more of these into some sort of third-party asset management product that you could charge fees on? Thank you.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Sure. Hi, Patrick. Thank you. First of all, on the securitization, the first question was related to additional fees or outcomes that we may experience. One thing to note is that we also remain the servicer of the underlying assets. We will retain servicing fees on these assets on a go-forward basis, which ultimately produces additional fee-related earnings associated with that. What we stated too in both the initial press release and even going forward is that we expect this particular type of structure to continue to grow and be very successful. It was very well received. We purposely chose to make it a little bit smaller offering initially with $50 million. We had excess support of that, or excess demand, rather, where we could have done a larger product here. When we were considering the partners that we wanted to do this with.

All of the partners were new and effective investing directly into this type of collateralized product. We were very encouraged by that. They consisted of both insurance companies and commercial banks. To that end, I think that that was really a piece to this that was incredibly successful, right, as you have new adoption of the asset. A lot of what they were looking for was this uncorrelated or less correlated yield in a rated structure. We see this continuing to grow as another type of distribution that we would be able to use to sell policies into and really aggregate policies into at an incredibly, I think, competitive cost of capital, which is also very, very compelling to us. I think the last piece to that was, would we see this structure growing into other third-party funds?

Certainly, taking that into consideration, there's been interest from other types of structures and vehicles who are looking for this kind of product even within their own third-party funds. I think as we continue to move forward, what was important was that getting this first one done was incredibly valuable, being that now we have the platform in place to where effectively we can rent and repeat and do it over again and even larger in scale, which we anticipate doing on a regular basis. I would expect to see more of these more consistently. We're trying for every quarter or every two quarters is kind of the target there.

Patrick Davis, Analyst, Autonomous Research: Thanks. Helpful. As a follow-up, the advertising blitz has broadened, it feels like, in the last couple of months to the point where I feel like Jay is living in my apartment on some days when I'm working from home. Maybe you could update us on any KPIs you might have on that effort converting to real volumes. How are you measuring the sense of what looks like a fairly big uptick in the marketing investment at this point? Thanks.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Sure. Thank you, Patrick. You'll typically see larger advertising attempts as we get more into Q4. We've seen that to be typically a larger quarter for us in relationship to our origination. It brings me to my point of if you look at Q3, compare Q3 to Q3 of last year, we're actually up 10% on Q3 over Q3 of last year. We kind of ramp into some of that advertising coming into Q4, as that's historically been a very productive quarter for us. While I apologize for living in your living room, I certainly don't apologize from a revenue point of view because it's working. That's great news. We'll try to turn them off in your zip code.

Patrick Davis, Analyst, Autonomous Research: Thanks a lot.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Thank you, Patrick.

Operator: The next question comes from Kristen Love with Piper Sandler. Please go ahead.

Kristen Love, Analyst, Piper Sandler: Thanks. Good afternoon. First, just on capital deployed, $102 million in the quarter, below the second quarter, but still able to put up really solid life settlements revenues. Was that driven primarily from the outsized average gains in the quarter or anything else there? Just curious on some of the puts and takes there. And then forward expectations for capital deployed, is $120 million a good run rate, or how are you thinking about that?

Bill McCauley, Chief Financial Officer, Abacus Global Management: Sure. Yeah, you're exactly right. In the Q3, if you notice the adjusted EBITDA margin increased to the highest EBITDA margin that we've ever had, over 60%. Yes, we were a little more strategic in Q3, where we saw some very interesting opportunities. Put that money to work. Historically, we've seen sometimes when you look at Q3, particularly as you're coming towards the end of the summer months, you've got a little bit of a shortened period there and then teeing up for Q4. We're actually quite pleased where Q3 ultimately came out and with the increase in margins just made a ton of sense to us. How we strategically deploy capital, we still want to be very thoughtful and very smart about it.

On a go-forward run rate basis, yeah, as we look at Q4 last year and compare Q4 to this year, our expectation is that we'll continue to see this maintain and grow from here. Some of that is capital dependent based upon new capital that we're obviously raising within our funds, but not just that, but also demand. We're seeing a pretty high uptick in demand from institutional capital who want to access this asset class due to the underlying nature of the asset class, being that it's an uncorrelated yield. As more volatility in the market gives us more opportunity to not just originate policies as people are seeking liquidity, but beyond that, fill larger portfolios for investment funds who are seeking to capitalize on this asset within their own funds. We expect that to continue to grow.

We are definitely out there, as Patrick had alluded to quite often, increasing our ad spend, and we're able to capitalize that, I think, in a successful way. From the one, whether that's going to be $120 million or slightly above or below that, what we see in Q4 or even going forward, I think that that's a fair run rate. We are obviously driving on a consistent basis to increase it. We're always looking to increase it. I mean, if you look at this number over the last two years, I mean, I think we're a 2X. Or even more on that number. At some point, you go 1.5-2X to where we are today. We're starting to see some normalization and predictability around as we predict capital.

However, as more opportunities present themselves over the next, I think, six months to one year, we could see that go up.

Patrick Davis, Analyst, Autonomous Research: Okay. And then just on the maintaining and growing from here, kind of maintaining and growing off of the $102 million in the third quarter, is that fair?

Bill McCauley, Chief Financial Officer, Abacus Global Management: Yeah. I mean, I think I would look at it if you look at Q4 of last year, right? And even if you look at, looking at Q2, where we were north of $120, I mean, I think that's a fair way to model as you're looking at where we think we would potentially be in Q4. I think that on top of that, though, there are some opportunities that we see in the market as we continue to utilize thought processes around new structures like securitizing or using a securitized type format in this asset. Crispin will have, I think, a significant impact on that capital deployed number, right? I mean, those two will ultimately go hand in hand. As you have cheaper cost of capital or lower cost of capital, that's going to impact even how much more you can originate.

We would expect that growth to continue.

Patrick Davis, Analyst, Autonomous Research: Perfect. Thank you. Appreciate all that. On the new dividend, can you share yours and the Board's thoughts on that, discussions you had versus just deploying excess capital into buying more policies or more buybacks or having a more nominal dividend? Just curious on your view on capital allocation, dividend buyback, deployment of capital.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Sure. We put a lot of thought into the dividend. As a business, as an asset manager, it's not unusual for asset managers to pay dividends. One of the things that you'll see is that as our recurring revenue continues to grow, as a percentage of the recurring revenue, we're right in line with other asset managers in what type of dividend would be paid. If you compare that against, for example, our adjusted net income, we're on very much the low side as conservatives. I think, as you would see out there, in the low 20s as a % of adjusted net income as. 8% for that dividend. We felt like, from a dividend perspective, this was a way to capitalize our shareholders in a very thoughtful way and not pulling anything away from the opportunities that we had to acquire new contracts.

We're targeting this year, Crispin, if you look at our new guidance, we're looking at 80% year-over-year growth. And a small dividend. I think that our shareholders are getting the best of both worlds. And that's not pulling back from our growth at all. We're continuing to expand and continuing to see our growth. And as we looked at our liquidity and then we looked at our recurring revenue, we felt, as a company that is maturing over time into a larger fee-related earnings business, that the logical next step for us was to pass those additional earnings onto our shareholders in the form of dividend, and we'll pay that dividend on an annual basis. And as we highlighted in the press release, it'll be based upon, again, a very conservative metric as a percent of less than 25% of our adjusted net income or 55% of our recurring revenue.

Patrick Davis, Analyst, Autonomous Research: All right. Great. Sorry, just one clarification. Will it be paid quarterly, or will it be an annual payment?

Bill McCauley, Chief Financial Officer, Abacus Global Management: That's an annual payment. You bring up a good point. We purposely chose to make it an annual dividend versus a quarterly so that we could opportunistically reinvest into some of these higher ROEs throughout the year and then ultimately pass that dividend on to our investors. It was a way for us to maximize our growth in capital while still providing a dividend and capitalization to our shareholders.

Patrick Davis, Analyst, Autonomous Research: Thank you, Jay. I appreciate you taking my questions.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Yeah.

Operator: The next question comes from Mike Grondahl with Northland Securities. Please go ahead.

Mike Grondahl, Analyst, Northland Securities: Hey, guys. Congrats on the securitization in the quarter. You gave a lot of good insight into the securitization. Could I maybe get you guys to go one step further? With that $50 million securitization, could you kind of talk about unit economics and revenue and adjusted EBITDA that comes from that transaction? Just so as we think about 2026, whether you're going to do one every other quarter or one every quarter, we can just kind of get a sense for how it lifts the business.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Sure. Thanks for the question, Mike. The way to think about it is that when you're looking at the unit economics on a securitization like this, I think it's fair to say that we will be able to capture servicing fees as we would normally capture in this kind of product on a go-forward basis, right? The way that I would compare this to on a unit economics basis, you actually see this as it's equally profitable as a sale. I mean, it is a true sale to a securitization in the way that we've set this structure up. Those unit economics exist. This is just another structure that we're able to utilize to capitalize on that true sale and policy.

When you look at our ROE and ROIC, those numbers would effectively be an indicator as to how we're managing the unit economics of the securitization because those policies are being sold in a true sale to that vehicle. I hope that makes sense. The unit economics for us are very compelling as they are for our business. What I think the securitization does really long-term is that it offers us more consistency over time when you think about when we're asked frequently about maintaining the strength of our ROEs and ROICs. This structure provides that over a very long period of time. I think that's one of the things I'm just really excited about.

As people look at our profitability or our margins, I think that this is a great structure that will allow us to maintain that profitability and margins for years to come.

Mike Grondahl, Analyst, Northland Securities: Great. It looks like you've made some progress from the slide deck on Abacus Wealth Advisors. A teams together and you're hiring some RIAs and have an AUM goal. Can you just talk about some of the progress you've made there?

Bill McCauley, Chief Financial Officer, Abacus Global Management: Sure. While we have a number of opportunities in consideration that we're not able to disclose at this time, we are incredibly excited about the growth of that segment of our business. One of the things we were highlighting was that the addition of AccuQuote over time. And AccuQuote was really one of our early steps into, for those individuals that we speak to, that we generate thousands of inquiries per month, could we potentially meet the lifecycle of that person and potentially sell them a new insurance product versus potentially trying to buy their policy that they may not qualify for? That was one of the first steps into really monetizing that relationship of individuals who may not qualify to sell their policy.

From the wealth advisory, I know we have what looks to be a pretty compelling five-year target in our deck in relationship to our fee-related earnings diversification. We still feel strongly about that. We have, like I said, a number of opportunities that we're considering right now. We have a great pipeline, and that's going to continue to build. I'm still very confident in what we've put out as a five-year target there in relationship to earnings. I think the biggest thing for us is that we are incredibly selective in any group that we speak with, specifically around acquisition. You have to be, right? They have to be very disciplined, and you have to make sure it's the right fit.

You have to ensure that you're looking at the type of earnings that you want because we've got a margin here, an EBITDA margin of what, 60%? Not just us, but most businesses don't have that kind of margin. When you look across the board, we want to be thoughtful to try to capture and not sacrifice our margin or impact negatively any of our other portions of our business. That is where some of the discipline falls in. We're making sure that we're looking for the right type of advisors that would fit that.

Mike Grondahl, Analyst, Northland Securities: Sounds good. Thank you.

Operator: The next question comes from Andrew Kligerman with TD Cowen. Please go ahead.

Andrew Kligerman, Analyst, TD Cowen: Hey, good evening, everyone. I was struck by the 37% realized gain, which outpaced last quarter and the year-over-year quarter, which were both peaks at 26%. Could you give a little color into what drove such a large gain? How can we think about going forward, 37% every quarter?

Bill McCauley, Chief Financial Officer, Abacus Global Management: Andrew, come on. Thank you for asking that. That's a big number. I think one way to think about this is that Elena touched on it during her comments. The average days on the book of policies we had sold was a little bit longer this quarter, meaning that on average, those were around 363 days. When you're letting those policies mature a little bit longer, inherently, your spreads are increasing. I think it just goes to point that there is a lot of strategy around ensuring that you're selling your contracts and monetizing those contracts at the right time, either through new underwriting, additional underwriting that could be relationship to premiums, as well as medical underwriting. Lastly, as these policies age and mature, they inherently become more valuable.

If you go back a year ago and you think about where rates were, right, or even more than that, a year and a half ago when we were really buying some of the, well, not quite a year and a half, but certainly over a year ago when we were buying these policies, we were buying these policies at, effectively, a lower price. Now that you have seen some movement in rates in a positive direction with lower cost of capital, you are able to sell that same contract for a larger spread. That is very simply what occurred over this time period. If we go back to when we were having conversations a year ago, we have actually kind of spoken about this opportunity where we are able to buy contracts at a very favorable pricing just due to market conditions.

We were able to capitalize on that for Q3. I think that if you're looking to kind of mark where we are historically, I think it's fair to say that where we were in Q2 and Q1, as you track these, I think we're always targeting north of 20%. In this case, we were able to capitalize on that a little bit more. I would look for kind of where we've been historically as our norm.

Andrew Kligerman, Analyst, TD Cowen: That's very helpful. You mentioned the 363-day holding period. I think, historically, at least on the outset, you were kind of targeting more like six months. I think last quarter, you kind of thought about maybe letting it season a little longer because of precisely what you're saying. Are you thinking, Jay, about 363 days or a year, rather, being—

Bill McCauley, Chief Financial Officer, Abacus Global Management: No, I mean. Yeah. I mean, in the chart. You see above the average realized gains, you'll see the holding period. And now if you look at the remaining days held of owned policies, it's at 253. For us, this was potentially more opportunistic than it has been in other quarters. As good stewards of capital, that's our job, is to maximize revenue and maximize returns on contracts that we think make the most sense. I think more broadly that if we continue to utilize, whether that's through funds or securitizations or as we see increased demand related from institutional investors who want to invest in this product, the holding period could actually come down, just depending on from the balance sheet perspective. I think that for our very best ideas, certainly, you might see some of those.

I think, as Elena highlighted, that was less than 20% of our balance sheet, as I would say, those types of policies that were really late-season, which has been in line with kind of where we've been. We haven't seen that number significantly move. Based upon these structures, you might actually see the hold period actually come down based upon the demand we have for the balance sheet contracts.

Andrew Kligerman, Analyst, TD Cowen: The hold period of like 250-plus days or maybe even lower.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Yeah.

Andrew Kligerman, Analyst, TD Cowen: That's helpful. I guess just lastly, Jay. AccuQuote. It's a—of course, it's life insurance, but it's different than the settlements business. Do you see any—or maybe I missed it on the intro remarks—but are there any overlaps where AccuQuote could drive life settlements business? And secondly, I don't know if you could share any of the economics of what the price tag was or anything like that, but I'd be interested if you could.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Sure. In relationship to synergies and crossovers, they definitely exist, right? It's a very large audience who are looking at a variety of different ways to capitalize on initially a new policy or potentially, as the road continues to age, maybe selling their policy. What we have found is that there are a number of kind of cross-selling opportunities throughout both books of business, but doing it in a really thoughtful way. We have also been utilizing their team for a variety of other things, in relationship to follow-up and education of clients. More to come there. What we really like about that specific platform initially is to kind of keep it focused on what it does best, right, which is capitalizing on and selling new term-style life insurance policies. There are a number of businesses out there that, from.

SelectQuote and others, that are running advertisements on this. To be able to offer that same type of opportunity for our clients who are calling in that do not qualify to sell their policy, we think just makes a ton of sense. I think initially here, we are going to be able to use AccuQuote for what it is designed to do. There are definitely synergies on a go-forward basis in relationship to acquisition. Currently, we have not put out the economics in relationship to the acquisition. I can tell you that from an acquisition size, meaning the scale of the acquisition, it was reasonably small in a sense that it was not necessarily material to both our earnings or balance sheet. This was not a—it was not large enough that we needed to report on it, if that makes sense.

Andrew Kligerman, Analyst, TD Cowen: Yes. Helpful, Jay. Thank you.

Operator: The next question comes from Timothy DeAgostino with B. Riley. Please go ahead.

Timothy DeAgostino, Analyst, B. Riley: Yeah. Hi. Thank you. Regardless of securitization coming in at $50 million. As investor demand increases, could we see larger securitizations going forward, maybe upwards of like $75 million? Or would we just see more securitizations at $50 million? Thanks.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Thanks, Timothy. Yeah. The answer is you will see larger securitizations over time. I think. As we highlighted before, the initial securitization was to ensure that the platform was effective, was efficient, that there was demand. There is excess demand for that current product. I would expect larger securitizations and more frequent ones.

Timothy DeAgostino, Analyst, B. Riley: All right. Great. If I could ask a second question. On slide 27 of the earnings deck, looking at the number of lives tracked for ABL, it seems like a lot went from in trial to paid lives. I was just kind of wondering how quickly those turned from in trial to paid. What is the growth looking like going forward? Because obviously, that number in trial has now decreased as they have been turned on. Thanks.

Bill McCauley, Chief Financial Officer, Abacus Global Management: Great question. Thank you, Timothy. Yes. That can turn pretty quickly. I mean, typically, you'll see that turn within the quarter. Somebody will stay in trial for 30-60 days. As that happens, you'll turn over a new. The actual underlying pipeline for the number of lives that we actually have is pretty significant. I mean, we're on track for north of 3 million lives by end of Q4. Just because they're not in trial, it also means that they could just be in the pipeline and they don't need a trial, right? We just wanted to show what's beyond. I think impressive to me when you're looking at that chart is look at where that business was a year ago. I mean, you're talking about nearly a 20-30 time multiple over where they were in relationship to the number of lives.

The business is growing exponentially. It's growing very quickly. The demand is off the charts. These are, again, three- and five-year long-term SaaS-related contracts. There were some of the largest pension funds in the country. I don't want to underscore this, but that gives us opportunity for financial products to represent into those same institutions where now, as an approved provider, we can show them additional opportunities to work with Abacus. Even from a lead gen point of view at the very top level, it's been incredibly valuable.

Timothy DeAgostino, Analyst, B. Riley: All right. Great. Thank you so much.

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

Bill McCauley, Chief Financial Officer, Abacus Global Management: Thank you so much, everyone. Our business is built around the people. And every single person who works here at Abacus, every employee, keep in mind that nearly 80% of our employees own this stock alongside with you. There is no greater moment than when we're able to deliver these kinds of results. We are able to deliver them because each and every person treats this business like an owner. Because of that, I think that's why we have the results that we have. We look forward to talking to you in future calls. If you want to reach out to us, please don't hesitate to reach out to our investor relations team. One of the things we pride ourselves on is our accessibility. We look forward to speaking to you again soon.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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