- Revenue of $259 million, up 247% year over year
- Transaction Value of $452 million, up 314% year over year
- Transaction Value from Property & Casualty up 766% year over year to $387 million
- Transaction Value from Health up 9% year over year to $56 million
"Our third-quarter performance was excellent, as we achieved record results across all key metrics.” said MediaAlpha co-founder and CEO Steve Yi. "Our P&C insurance vertical once again exceeded our expectations as select carriers increasingly leveraged our marketplace to drive growth. Looking ahead, we are well positioned to deliver sustainable long-term growth and market share gains as the largest and most trusted customer acquisition partner in the insurance industry."
Third Quarter 2024 Financial Results
- Revenue of $259.1 million, an increase of 247% year over year;
- Transaction Value of $451.8 million, an increase of 314% year over year;
- Gross margin of 15.1%, compared with 16.5% in the third quarter of 2023;
- Contribution Margin(1) of 16.0%, compared with 20.2% in the third quarter of 2023;
- Net income was $11.9 million, compared with a net loss of $(18.7) million in the third quarter of 2023; and
- Adjusted EBITDA(1) was $26.3 million, compared with $3.6 million in the third quarter of 2023.
Financial Outlook
Our guidance for the fourth quarter of 2024 reflects a continuation of the recent trends in customer acquisition spending that we have seen in our P&C insurance vertical. As a result, we expect Transaction Value in our P&C insurance vertical to be flat to slightly up as compared to Q3 2024 levels, stronger than typical seasonal trends. We expect fourth quarter Transaction Value in our Health insurance vertical to be down mid-single digits year over year due to headwinds in Medicare.
For the fourth quarter of 2024, MediaAlpha currently expects the following:
- Transaction Value between $470 million - $495 million, representing a 192% year-over-year increase at the midpoint of the guidance range;
- Revenue between $275 million - $295 million, representing a 143% year-over-year increase at the midpoint of the guidance range;
- Adjusted EBITDA between $29.5 million and $32.5 million, representing a 144% year-over-year increase at the midpoint of the guidance range. We are projecting Contribution less Adjusted EBITDA to be approximately $0.5 - $1.0 million higher than in Q3 2024.
For a detailed explanation of the Company's non-GAAP measures, please refer to the appendix section of this press release.
Conference Call Information
MediaAlpha will host a Q&A conference call today to discuss the Company's third quarter 2024 results and its financial outlook for the fourth quarter of 2024 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the call will be available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. To register for the webcast, click here. Participants may also dial-in, toll-free, at (800) 715-9871 or (646) 307-1963, with passcode 2616289. An audio replay of the conference call will be available following the call and available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com.
We have also posted to our investor relations website a letter to shareholders. We have used, and intend to continue to use, our investor relations website at https://investors.mediaalpha.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation our statement that we are well positioned to deliver sustainable long-term growth and market share gains as the largest and most trusted customer acquisition partner in the insurance industry, and our financial outlook for the fourth quarter of 2024. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may,” "should,” "could,” "predict,” "potential,” "believe,” "will likely result,” "expect,” "continue,” "will,” "anticipate,” "seek,” "estimate,” "intend,” "plan,” "projection,” "would,” and "outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including those more fully described in MediaAlpha's filings with the Securities and Exchange Commission ("SEC”), including the Form 10-K filed on February 22, 2024 and the Forms 10-Q filed on May 2, 2024 and August 1, 2024, and to be filed on or about October 31, 2024. These factors should not be construed as exhaustive. MediaAlpha disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this press release.
Non-GAAP Financial Measures and Operating Metrics
This press release includes Adjusted EBITDA, Contribution, and Contribution Margin, which are non-GAAP financial measures. The Company also presents Transaction Value, which is an operating metric not presented in accordance with GAAP. See the appendix for definitions of Adjusted EBITDA, Contribution, Contribution Margin and Transaction Value, as well as reconciliations to the corresponding GAAP financial metrics, as applicable.
We present Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. Accordingly, we believe that Transaction Value, Adjusted EBITDA and Contribution Margin provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. Each of Transaction Value, Adjusted EBITDA and Contribution Margin has limitations as a financial measure and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
About MediaAlpha
We believe we are the insurance industry's leading programmatic customer acquisition platform. With more than 1,200 active partners, we connect insurance carriers with online shoppers and generated more than 99 million consumer referrals in 2023. Our programmatic advertising technology over the last twelve months powered $1.2 billion in spend on brand, comparison, and metasearch sites across property & casualty insurance, health insurance, life insurance, and other industries. For more information, please visit www.mediaalpha.com.
Contacts:
Investors
Denise Garcia
Hayflower Partners
| MediaAlpha, Inc. and subsidiaries Consolidated Balance Sheets (Unaudited; in thousands, except share data and per share amounts) | |||||||
| September 30,
2024 | December 31, 2023 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 32,304 | $ | 17,271 | |||
| Accounts receivable, net of allowance for credit losses of $1,027 and $537, respectively | 126,814 | 53,773 | |||||
| Prepaid expenses and other current assets | 2,936 | 3,529 | |||||
| Total current assets | 162,054 | 74,573 | |||||
| Intangible assets, net | 21,588 | 26,015 | |||||
| Goodwill | 47,739 | 47,739 | |||||
| Other assets | 4,729 | 5,598 | |||||
| Total assets | $ | 236,110 | $ | 153,925 | |||
| Liabilities and stockholders' deficit | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 109,577 | $ | 56,279 | |||
| Accrued expenses | 14,202 | 11,588 | |||||
| Current portion of long-term debt | 8,839 | 11,854 | |||||
| Total current liabilities | 132,618 | 79,721 | |||||
| Long-term debt, net of current portion | 155,811 | 162,445 | |||||
| Other long-term liabilities | 7,302 | 6,184 | |||||
| Total liabilities | $ | 295,731 | $ | 248,350 | |||
| Commitments and contingencies | |||||||
| Stockholders' (deficit) | |||||||
| Class A common stock, $0.01 par value - 1.0 billion shares authorized; 55.1 million and 47.4 million shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 551 | 474 | |||||
| Class B common stock, $0.01 par value - 100 million shares authorized; 11.6 million and 18.1 million shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 116 | 181 | |||||
| Preferred stock, $0.01 par value - 50 million shares authorized; 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023 | - | - | |||||
| Additional paid-in capital | 501,543 | 511,613 | |||||
| Accumulated deficit | (510,573 | ) | (522,562 | ) | |||
| Total stockholders' (deficit) attributable to MediaAlpha, Inc. | $ | (8,363 | ) | $ | (10,294 | ) | |
| Non-controlling interest | (51,258 | ) | (84,131 | ) | |||
| Total stockholders' (deficit) | $ | (59,621 | ) | $ | (94,425 | ) | |
| Total liabilities and stockholders' deficit | $ | 236,110 | $ | 153,925 | |||
| MediaAlpha, Inc. and subsidiaries Consolidated Statements of Operations (Unaudited; in thousands, except share data and per share amounts) | |||||||||||||||
| Three Months Ended
September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 259,133 | $ | 74,573 | $ | 564,056 | $ | 270,975 | |||||||
| Costs and operating expenses | |||||||||||||||
| Cost of revenue | 219,907 | 62,277 | 469,465 | 226,545 | |||||||||||
| Sales and marketing | 6,496 | 6,101 | 18,608 | 19,802 | |||||||||||
| Product development | 5,328 | 4,296 | 14,743 | 14,525 | |||||||||||
| General and administrative | 11,794 | 16,648 | 36,767 | 50,473 | |||||||||||
| Total costs and operating expenses | 243,525 | 89,322 | 539,583 | 311,345 | |||||||||||
| Income (loss) from operations | 15,608 | (14,749 | ) | 24,473 | (40,370 | ) | |||||||||
| Other (income) expense, net | (154 | ) | (100 | ) | (1,971 | ) | 1,165 | ||||||||
| Interest expense | 3,562 | 3,947 | 11,158 | 11,397 | |||||||||||
| Total other expense, net | 3,408 | 3,847 | 9,187 | 12,562 | |||||||||||
| Income (loss) before income taxes |
| ||||||||||||||