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MediaAlpha, Inc. (MAX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered strong topline growth: revenue $251.6M (+41% YoY), transaction value $480.8M (+49% YoY), with record P&C transaction value of $435.0M driven by sustained carrier demand . Adjusted EBITDA was $24.5M (+31% YoY) despite take-rate compression and mix shifts .
  • Results vs Wall Street: revenue beat consensus ($251.6M vs $248.8M*), and Primary EPS (S&P “Primary EPS”) materially beat ($0.44* vs $0.16*). GAAP diluted EPS was a loss of $(0.33) due to a $33.0M reserve for the FTC settlement recorded in Q2 . Values retrieved from S&P Global.*
  • Strategic/legal: FTC investigation into under-65 health fully resolved with a $45.0M settlement and enhanced compliance measures; management views this as removing an overhang and setting a new baseline for the Health vertical .
  • Outlook: Q3 guidance calls for transaction value $545–$570M (+23% YoY at midpoint), revenue $270–$290M (+8% YoY), and adjusted EBITDA $25.5–$27.5M (+1% YoY), with P&C TV growth ~35% YoY and continued weakness in under-65 .
  • Balance sheet/catalysts: Ended Q2 with $85.4M cash and net debt / adjusted EBITDA ~0.6x; extended $142.6M of credit facility maturities to July 2027. Near-term catalysts include continued P&C budget strength and post-settlement clarity; watch AEP dynamics where carriers are likely conservative but broker demand steadier .

What Went Well and What Went Wrong

What Went Well

  • Record P&C vertical transaction value ($435.0M, +71% YoY) fueled by increased carrier marketing and share gains across publishers; management expects strong carrier budgets to persist .
  • Adjusted EBITDA up 31% YoY to $24.5M, with EBITDA representing 62% of contribution versus 56% last year, reflecting operating leverage and efficiency .
  • Legal overhang removed: FTC settlement finalized ($45.0M), funded from cash, with added compliance strengthening; management cites confidence in trajectory post-resolution .

What Went Wrong

  • Take-rate compression from mix: smaller under-65 contribution and a larger share of spend shifting to top P&C carriers and a lower-than-average take-rate supply win, pressuring contribution margin (15.8% vs 18.9% YoY) .
  • Health vertical deteriorated: transaction value down 32% YoY to $37.4M; under-65 scaling back ahead of settlement, resetting 2025 under-65 TV to ~$95–$100M and contribution to ~$10M (midpoint 10% take-rate) .
  • GAAP profitability impacted by legal reserve: net loss $(22.5)M vs $4.4M income in Q2’24 driven primarily by the $33.0M incremental reserve for the FTC matter .

Financial Results

Headline Financials (Oldest → Newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$300.6 $264.3 $251.6
Gross Margin %16.3% 15.8% 15.0%
Contribution Margin %17.1% 16.6% 15.8%
Net Income ($USD Millions)$7.3 $(2.3) $(22.5)
Diluted EPS ($USD)$0.08 $(0.04) $(0.33)
Adjusted EBITDA ($USD Millions)$36.7 $29.4 $24.5
Cash & Equivalents ($USD Millions)$43.3 $63.6 $85.4

Segment Transaction Value (Oldest → Newest)

MetricQ1 2025Q2 2025
P&C Transaction Value ($USD Millions)$406.8 $435.4
Health Transaction Value ($USD Millions)$57.7 $37.4
Life Transaction Value ($USD Millions)$7.0 $6.8
Other Transaction Value ($USD Millions)$1.6 $1.2
Total Transaction Value ($USD Millions)$473.1 $480.8

Under-65 Health KPI Trend (Oldest → Newest)

MetricQ1 2024Q2 2024Q3 2024Q4 2024Q1 2025Q2 2025
Total Contribution ($USD Millions)$28 $34 $41 $52 $44 $40
Under-65 Contribution ($USD Millions)$8 $6 $5 $10 $6 $2
Under-65 % of Total Contribution29% 19% 13% 19% 13% 6%

Q2 2025 vs Estimates (S&P Global)

MetricQ2 2025 Estimate (S&P)*Q2 2025 Actual
Revenue ($USD Millions)$248.8*$251.6
Primary EPS ($USD)$0.16*$0.44*
GAAP Diluted EPS ($USD)N/A$(0.33)

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Transaction Value ($USD Millions)Q3 2025N/A$545–$570New
Revenue ($USD Millions)Q3 2025N/A$270–$290New
Adjusted EBITDA ($USD Millions)Q3 2025N/A$25.5–$27.5New
P&C TV YoY growthQ3 2025N/A~35% YoYNew
Health TV YoY changeQ3 2025N/A(40%–45%) YoY declineNew
Under-65 Transaction Value ($USD Millions)Q3 2025N/A~$18New
Under-65 Contribution ($USD Millions)Q3 2025N/A~$1New
OverheadQ3 2025N/A+~$1M sequentialNew

Additional context: 2025 under-65 TV expected $95–$100M and contribution ~$10M (midpoint take-rate ~10%) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
P&C carrier budgets and market shareQ1: budgets re-accelerated into March; strong YoY P&C TV (+200%); publishers and carriers broadening participation Expect strong budgets to continue into Q3 and beyond; mix shifting to top carriers; share gains with supply partners Strengthening
Auto tariffs/macroQ1: tariffs a potential headwind later in year; carriers highly profitable; manageable impact expected Automotive tariffs impact increasingly manageable; carriers’ profitability remains strong Risk moderating
Under-65 health and FTCQ1: scaling back under-65; increased reserve to $12M Settlement finalized at $45M; enhanced compliance; under-65 reset lower on TV/contribution Resolved/Reset
Medicare Advantage AEP outlookQ1: hard-market-like environment; mixed carrier actions; brokers steadier Expect consumer shopping to rise, but carriers conservative; brokers may spend relatively more Muted demand
Marketplace mix (Open vs Private)Q1: P&C historically more private; near-term mix can skew with big partner wins Spend shifting to top carriers; onboarding supply at lower take rates (still profit-positive) More private mix; lower take-rate
Capital structure/FCFQ4/Q1: leverage <1x; strong cash conversion Q2 cash $85M; net debt/EBITDA 0.6x; debt maturity largely extended to 2027 Improving flexibility

Management Commentary

  • “We delivered record second quarter results, led by 71% year-over-year Transaction Value growth in our P&C insurance vertical, driven by sustained demand from leading carriers and a growing partner base… With the FTC matter fully behind us… we are poised for continued momentum” — Steve Yi, CEO .
  • “Transaction value was $481 million up 49% year over year… Adjusted EBITDA for the quarter was $24.5 million increasing 31% year over year… [includes] $35.3 million of add backs related to the FTC matter… [and] an additional $33.0 million reserve” — Patrick Thompson, CFO .
  • “We expect these favorable industry dynamics to sustain healthy levels of auto insurance advertising spend in the second half of this year and beyond” — Steve Yi .
  • “On August 4, we extended the maturity of $142.6 million… by one year through July 2027… We generated $22 million of cash and ended the quarter with $85 million of cash” — Patrick Thompson .

Q&A Highlights

  • Under-65 competitive positioning post-FTC: management sees a “new baseline” for the business, with enhanced compliance not impacting Medicare or P&C; expects opportunity to serve consumers amid Medicaid disenrollments and ACA subsidy changes .
  • P&C demand drivers: majority of spend increase from existing top carriers; consistent share gains on publisher side including exclusive wins, reflecting tech and monetization strengths .
  • Margin framework and take-rate compression: under-65’s lower mix and spend shifting to top P&C carriers drove take-rate lower; supply partner onboarded at lower-than-average take-rate but profit-positive; EBITDA efficiency improving YoY .
  • Capital allocation: near term cash use for FTC settlement; remain open to organic/inorganic investments, debt reduction, and potential return of capital over time .
  • Medicare AEP: expect increased consumer shopping/churn but conservative carrier budgets; brokers relatively better positioned than carriers .

Estimates Context

  • Q2 comparison: revenue $251.6M vs S&P consensus $248.8M* (beat); S&P Primary EPS actual $0.44* vs $0.16* estimate (beat). Company-reported GAAP diluted EPS was $(0.33), reflecting legal reserve impact . Values retrieved from S&P Global.*
  • Q3 setup: Company guides revenue $270–$290M and adjusted EBITDA $25.5–$27.5M; S&P revenue consensus stands at ~$283.4M*, broadly within guidance. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • P&C momentum remains the core driver: record $435.0M P&C transaction value in Q2 and guidance for ~35% YoY P&C TV growth in Q3 suggest continued strength as carriers prioritize customer acquisition amid robust profitability .
  • Mix and take-rate matter: near-term margin pressure from mix (top-carrier spend, private marketplace, lower-margin under-65) should normalize as management pivots to optimize for gross profit with greater data scale in a softer market environment .
  • Legal overhang lifted: FTC settlement ($45.0M) removes uncertainty; compliance enhancements reset under-65 baseline but protect Medicare/P&C trajectories .
  • Health vertical cautious into AEP: expect higher shopping but muted carrier budgets; brokers may provide steadier demand—plan for continued Health headwinds near term .
  • Cash generation and flexibility: $85.4M cash, net debt/EBITDA ~0.6x, and extended maturities to 2027 provide optionality for selective investment, deleveraging, and potential capital returns after settlement payments .
  • Q3 guide vs street: Revenue guide $270–$290M brackets S&P consensus (~$283M*), with adjusted EBITDA roughly flat YoY; upside lever remains P&C budget strength, downside tied to under-65 reset . Values retrieved from S&P Global.*
  • Trading lens: In the near term, the settlement resolution and strong P&C guide are positive catalysts; watch take-rate trends and Health vertical AEP spend to gauge margin recovery and estimate revisions .