NYSE:MAX MediaAlpha Q1 2025 Earnings Report $10.03 -0.13 (-1.28%) As of 03:32 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast MediaAlpha EPS ResultsActual EPS$0.15Consensus EPS $0.17Beat/MissMissed by -$0.02One Year Ago EPS-$0.02MediaAlpha Revenue ResultsActual Revenue$264.31 millionExpected Revenue$236.07 millionBeat/MissBeat by +$28.24 millionYoY Revenue Growth+108.70%MediaAlpha Announcement DetailsQuarterQ1 2025Date4/30/2025TimeAfter Market ClosesConference Call DateWednesday, April 30, 2025Conference Call Time5:00PM ETUpcoming EarningsMediaAlpha's Q2 2025 earnings is scheduled for Wednesday, July 30, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by MediaAlpha Q1 2025 Earnings Call TranscriptProvided by QuartrApril 30, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Ladies and gentlemen, thank you for standing by. Hello? Thank you for standing by. My name is Carmen and would like to welcome everyone to the Media Alpha First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background. Operator00:00:23After the speakers' remarks, there will be a question and answer session. Thank you. I will now turn the call over to Alex LaLea, Investor Relations. Please go ahead. Alex LiloiaPartner at Hayflower Partners00:00:47Thanks, Carmen. Good afternoon, and thank you for joining us. With me are Co Founder and CEO, Steve Yee and CFO, Pat Thompson. On today's call, we'll make forward looking statements relating to our business and outlook for future financial results, including our financial guidance for the second quarter of twenty twenty five. These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Alex LiloiaPartner at Hayflower Partners00:01:13Please refer to our SEC filings, including our annual report on Form 10 ks and quarterly reports on Form 10 Q for a full explanation of those risks and uncertainties and the limits applicable to forward looking statements. All the forward looking statements we make on this call reflect our assumptions and beliefs as of today, and we disclaim any obligation to update such statements except as required by law. Today's discussion will include non GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of these non GAAP financial measures to the corresponding GAAP measures can be found in our press release and shareholder letter issued today, which are available on the Investor Relations section of our website. I'll now turn the call over to Steve. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:01:57Hey, thanks Alex. Hi everyone. Thank you for joining us. 2025 is off to an outstanding start as we delivered record first quarter financial results that exceeded our guidance across all key performance metrics. Our strong results were driven by continued strength in our P and C insurance vertical, supported by robust growth investments from several carriers amid solid underlying profitability in the personal auto insurance sector. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:02:24While automotive tariff developments may put pressure on profitability as the year progresses, we anticipate continued near term momentum and another strong quarter for our core TNC business. In our health insurance vertical, our first quarter performance was in line with expectations. Going forward, we've made the strategic decision to scale back certain areas of our 65 business as we continue to shift our focus to Medicare Advantage, a large and growing market where we believe we have a strong competitive position. With regard to the FTC matter, we continue to engage in constructive dialogue with the FTC staff in an effort to work towards a reasonable resolution. In connection with these evolving discussions, we increased our reserve related to this matter by $5,000,000 bringing the total reserve to $12,000,000 at the end of the quarter. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:03:15While we cannot predict the outcome, we remain committed to resolving the FTC's claims in a manner that's in the best long term interests of our shareholders. Looking ahead, we remain bullish on our near term outlook for auto insurance advertising spend. While the upcoming automotive tariffs has the potential to negatively affect the industry, carriers by and large are highly profitable at this time and are ready to react quickly by adjusting rates if needed. We're staying closely connected with our partners and remain focused on delivering high returns on advertising spend and providing performance driven marketing solutions that help them to exceed through different macroeconomic conditions. With that, I'll hand it over to Pat for a deeper dive into our first quarter performance and second quarter guidance. Patrick ThompsonCFO at MediaAlpha00:04:00Thanks, Steve. I'll start by walking through the drivers of our Q1 results, which beat expectations. Transaction value for Q1 was $473,000,000 up 116% year over year, driven by 200% year over year growth in our P and C vertical. P and C transaction value was up sequentially, above expectations, as several carriers meaningfully increased marketing investments in March. Transaction value in our Health vertical was down 17% year over year, in line with expectations. Patrick ThompsonCFO at MediaAlpha00:04:35Q1 adjusted EBITDA doubled year over year to $29,400,000 representing 67% of contribution, up from 52% in the prior year. Q1 adjusted EBITDA included $6,900,000 of add backs related to the FTC matter. These consisted of $1,900,000 of legal expenses along with an additional $5,000,000 reserve recorded in accordance with U. S. GAAP requirements. Patrick ThompsonCFO at MediaAlpha00:05:04We also recognized the $13,400,000 charge to write off certain intangible assets acquired as part of the DHT acquisition. Additionally, we have decided to exit the Travel vertical by the end of the second quarter, which contributed approximately $1,000,000 of transaction value and $100,000 of profit in Q1. Looking forward to Q2, we have seen continued strength in P and C carrier marketing investments, particularly among those maintaining profit margins at or above their target levels. Accordingly, we expect P and C transaction value levels to grow approximately 65% to 75% year over year. In our Health vertical, we expect transaction value to be down 25% to 30% year over year. Patrick ThompsonCFO at MediaAlpha00:05:52Is improving trends in Medicare are more than offset by a significant decline in under 65% as we scale back parts of that business. We expect Medicare to account for over 40% of our Health Verticals transaction value for the quarter. Moving to our consolidated financial guidance. We expect Q2 transaction value to be between $470,000,000 and $495,000,000 a year over year increase of 50% at the midpoint. We expect revenue to be between $235,000,000 and $255,000,000 a year over year increase of 37% at the midpoint. Patrick ThompsonCFO at MediaAlpha00:06:31We expect adjusted EBITDA to be between $25,000,000 and $27,000,000 a year over year increase of 39% at the midpoint. We expect overhead to increase sequentially by approximately $500,000 to $1,000,000 as we continue to selectively add headcount to support and drive growth. We generated significant cash flow and made solid progress in deleveraging our balance sheet during the quarter. Cash flow was $20,000,000 and we ended the quarter with approximately $64,000,000 of cash and a net debt to adjusted EBITDA ratio of less than 1x. Moving forward, we expect to convert a significant portion of adjusted EBITDA into unlevered free cash flow due to the operating efficiencies in our business, including minimal capital expenditures and low working capital needs. Patrick ThompsonCFO at MediaAlpha00:07:20With that, operator, we are ready for the first question. Operator00:07:24Thank you. Your first question comes from Maria Ripps with Canaccord. Maria, please go ahead with your question. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:07:32Great. Thanks so much for taking my questions, and congrats on the strong quarter. Well, thanks for all the color on the P and C vertical in the shareholder letter, and it looks like the strength is continuing here in Q2. I know you're not providing full year guidance, but any additional color maybe you can share on how carrier spend sort of may play out in the second half of the year, especially given tariffs? I guess is there anything sort of you're seeing in carrier behavior that gives you any early maybe indications or what are some sort of maybe considerations here to keep in mind? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:08:04Hey Maria, it's Steve. Thanks for your question. I think we continue to believe that overall the auto insurance marketplace, you know, remains very well positioned for a period of sustained growth. I mean, I think that, you know, our optimism for this space, right, is really goes back to the underlying profitability that we continue to see, you know, remaining very strong in the auto sector, right? You know, there's certain carriers who are not just, you know, at good profitability rates. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:08:37I think they have some carriers who are even above or better than their long term profitability goals. And I think that really bodes well, right, for, you know, what the upcoming quarters will bring in terms of the investment from these carriers into growth and customer acquisition. I do we do see I think quarter by quarter the market is gradually entering into a period of heightened competition. You know, we are seeing new carriers I think every quarter who are really shifting from rate taking and profitability focus to growth customer acquisition focus. So you're seeing the recovery and the participation on the demand side in our marketplace, you know, becoming more broad based I think every quarter. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:09:21I think one thing that bodes well for longer term growth as the year progresses is that, you know, with everything that I've just said, there's still top 10 carriers who really don't believe are punching nearly where they should be in terms of the rest in this channel, whether you, you know, measure that based on their historical levels of spend or just their overall market position. But with that said, I think all of these carriers, I mean we're really happy with where we are with our partnerships with these carriers because the level of integration that we have with them, I think the level of sophistication that they have with the internal marketing teams in their knowledge of this channel. And the product development discussions that we're having with them I think positioned them very well to be able to grow, you know, through the remainder of this year and next year as they continue the secular shift to emphasizing direct to consumer distribution, whether in place of agent based distribution or in addition to agent based distribution. So now I think the only sort of dark lining I think in the silver cloud is the potential for these automotive tariffs, right, to put some headwinds in carrier profitability in the second half of this year and next year. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:10:46And so I think you're already hearing from the carriers who are focused on this issue, right, that it's a little bit too early to tell exactly what the impact is going to be. But I think you're also seeing a consensus on a couple of things. One is that a lot of the carriers are at a pretty good rate right now. And so they have a bit of buffer for loss rates to actually go up. I think the second thing that you're seeing and hearing is that the impact of these automotive tariffs, you know, will be relatively moderate, And I think what we're seeing is estimates of between low to mid single digits that we expect to see layering in in the second half of this year. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:11:27And we believe that the carriers are pretty well positioned to react quickly to these rate increases or I'm sorry, to these loss cost increases by filing for rate increases I think pretty early in the cycle. And I say that because the carriers are all coming from a period of sustained unprofitability and I think remain very acutely aware of the need to react quickly to address any profitability concerns that start to pop up. And so I think for all of these reasons we think that the impact of automotive tariffs that we expect to see in the back half of this year and in 2026, you know, will generally be manageable by the overall industry and that the industry is going to continue to invest in customer acquisition and growth during this period. But it's something that we'll obviously keep a very close eye on and continue to update with you in upcoming quarters. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:12:19Great. That's very helpful. And then just a quick follow-up. Can you maybe refresh us on key dynamics across your open and private marketplaces? And maybe just talk about some of the reasons of benefits or maybe even use cases a carrier would opt to use a private marketplace? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:12:39Yes. And so I think with the private marketplaces I think that's a product offering that we have that's primarily designed for our largest publishers and their ability to work directly with our largest advertisers. You know, so it really covers the minority of the relationships that we create through our marketplace, you know, as we get a broader base of demand and I think a broader base of supply coming into the marketplace, you know, as the current I think growth cycle continues. I think you're going to see, you know, and more transactions really move from the seller exchange or not move from the seller exchange but you're going to see more of these transactions really happen in the open exchange. Because again, the seller exchange product that we have where parties can contract directly and pay us a platform fee for making that connection through our marketplace is really meant for large publishers connecting directly with large advertisers. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:13:41Great. That's very helpful. Thank you so much, Steve. Patrick ThompsonCFO at MediaAlpha00:13:44And this is Pat. I just wanted to add one thing to what Steve said there, which is that I think as you think about the open to private mix in our business, it's important to think about the vertical mix that we have as well. And so for us, historically, P and C is had a higher mix of private marketplace than has held. And one of the things that we have seen is that, for instance, if we were to if we win a big partner, that partner may be relatively more private and can shift the numbers a little bit in one direction. And so I think everything Steve said is correct, which over time, would expect to see more of the business going open in the short term. Patrick ThompsonCFO at MediaAlpha00:14:38Wouldn't be surprised if it went a little bit more private. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:14:42Got it. Thank you so much, Pat. Operator00:14:45Your next question comes from the line of Cory Carpenter with JPMorgan. Cory, please go ahead. Cory CarpenterInternet Equity Research at JP Morgan00:14:52Hey, good afternoon. I had two. Maybe the first is sticking on P and P. Steve, you said last quarter that pricing was down to start the year. It sounds like that picked back up again in March. Cory CarpenterInternet Equity Research at JP Morgan00:15:03Just curious what you think changed specifically in March? And then secondly, on the Health business, could you just talk more about your decision to scale back the under 65 business? You know, how much of that is kind of due to business conditions or, you know, could that have also perhaps been related to some of the FTC changes? Thank you. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:15:23Hey Corey, I'll address the first part of that question which is I don't know that anything really I think changed in March. I think what we saw was I think strong demand from carriers as the quarter progressed, you know, really manifesting itself in terms of having greater budget, right, access to greater budget, you know, as the quarter progressed. You know, I think that the reason for this is really just, you know, what we pointed to in the last quarter which is less of a change in the underlying I think economics and the growth demand that we're seeing from carriers. It was really just I think the conservatism that we saw from carriers as the year started coming on the heels I think of a Q4 where there was a heavy amount of spend in customer acquisition. And as we alluded to, you know, because the numbers were coming in so strongly for most carriers, I think there was a bit of, you know, more aggressive customer acquisition spend as we saw Q4 close out. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:16:30And I think as a result of that a lot of carriers took a bit of a more conservative position to start out the year. And I think the fact that, you know, we got allocated more budget and we saw great participation from carriers as the quarter progressed was really that in, you know, beginning of year conservatism really starting to wear off. And, you know, and we've certainly seen the strength that we saw in March really continue into Q2, which is embedded in our forecast. Patrick ThompsonCFO at MediaAlpha00:17:02Corey, this is Pat. I can address the second part of the question. And I would say, a company, we've already we've always prioritized compliance as kind of a core part of how we operate. And we're we are regularly reviewing and enhancing our compliance programs to try to stay ahead of regulations as they evolve and to kind of help drive industry best practices. And I would say that kind of as part of these efforts, we are proactively implementing some additional measures. Patrick ThompsonCFO at MediaAlpha00:17:33And a couple of things we've done, we've updated our partner code of conduct to reinforce the expectations on what partners can and cannot do, and we've expanded proactive monitoring of calls to ensure ongoing compliance with that code of conduct. And so, you know, I think our view is this is, you know, the kind of behavior we've demonstrated, you know, over years and years for us. You know, it's, you know, our focus really remains you know, having, having a great product, one that is transparent and accurate and that ultimately links up consumers, you know, with the right, you know, brokers, carriers, agents that can help them get their Cory CarpenterInternet Equity Research at JP Morgan00:18:14needs met. Thank you. Operator00:18:20Your next question comes from the line of Tommy McJoint with KBW. Please go ahead, Tommy. Tommy McJoynt-GriffithDirector at Keefe, Bruyette & Woods (KBW)00:18:28Hey, good afternoon, guys. Staying on the subject of the 65 segment, can you just kind of clarify exactly what you mean by scale back? Does that mean a wind down? And then when you think about the revenue or transaction value or I guess best would be kind of earnings mix of that 65 segment within Health, anything you can share to disclose around that? Patrick ThompsonCFO at MediaAlpha00:19:07I'm sorry. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:19:08On mute. I think yeah. Patrick ThompsonCFO at MediaAlpha00:19:10Sorry. I was I was on I was on mute there. So I would so, Tommy, I would say on that, you know, with the health biz or with the the 65 business, we said we were scaling down that business. And so I would not read that as being an exit. Rather, we are going to be taking a partial step backwards in it. Patrick ThompsonCFO at MediaAlpha00:19:34And I think we gave guidance for the upcoming quarter that we thought the Health vertical as a whole would be down 25% to 30%, and we thought Medicare would be improving overall. So hopefully, that can get you to a spot where you can start to kind of contextualize what is happening there to the business. And so we believe that business, we're going be kind of rebaselining that business over the coming quarters. Tommy McJoynt-GriffithDirector at Keefe, Bruyette & Woods (KBW)00:20:06Okay, got it. And then staying within the health side, looking at the Medicare Advantage, can you share what you guys see in terms of the health of that market? It seems like we've seen some sort of mixed reviews from some of the health care providers and some of the recent quarterly reports. So it would be helpful to hear your commentary. Patrick ThompsonCFO at MediaAlpha00:20:26Certainly. So it's Pat again. The Medicare Advantage market is one that is in a temporary hard market cycle. And I think our view is that it's actually relatively similar to some of the past cycles we've seen in the P and C space. And so as a reminder, we dealt with that 2022 and 2023. Patrick ThompsonCFO at MediaAlpha00:20:48And these cycles are normal, and they're temporary. And really, they're being driven by some of the carrier partners experiencing headwinds due to elevated loss costs, which are pressuring overall profitability. And as we look at the Medicare Advantage market, what we see is a business that over time has a lot of wind at its back, which is the number of seniors in eligible population for Medicare is growing. That population is increasingly opting into Medicare Advantage. Medicare Advantage is a it's an important purchase for people or important decision for folks, and it is one where the new folks aging in every year are much more kind of Internet enabled. Patrick ThompsonCFO at MediaAlpha00:21:36And we believe we're very well positioned to kind of help that industry navigate more and more to online as consumers, you know, look to shop there. And so it's it's an area where we think, you know, over a three, five, seven, ten year period, the opportunity is very, very attractive for us. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:21:57Know, Tommy, I'll add this is Steve. I'll also add that, you know, while Medicare Advantage has pretty broad bipartisan support, you know, I think at the margin certainly, you know, because it's a private market alternative to government run pay for service Medicare that it has marginally more support from Republican administrations. And so, you know, I think you're starting to see that play out a bit and a more favorable climate, you know, starting to emerge, right, you know, from, you know, increased payment rates which I think the industry was pleasantly surprised by the 5% plus payment rates that were set by CMS earlier this month. And I think that you're starting to see signs of a different regulatory approach that this administration is ready to take with Medicare Advantage. And again, while both parties tend to be pretty supportive of Medicare Advantage, I do think that over the next few years at the margins you'll see, you know, an administration that's going to take more of a growth oriented and a supportive position with regard to Medicaid, Medicare Advantage carriers. Patrick ThompsonCFO at MediaAlpha00:23:13Thank you. Operator00:23:16Your next question comes from the line of Mike Zaremski with BMO Capital Markets. Please go ahead, Mike. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:23:25Hey, great. Good afternoon. I know that there might be complicated question, but could you help unpack kind of what's contributing to the contribution margin ratio declining? Patrick ThompsonCFO at MediaAlpha00:23:43Yes. And and and, Mike, which contribution margin are you talking about as the percentage of revenue? Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:23:50Yes. Percentage of revenue. Patrick ThompsonCFO at MediaAlpha00:23:52Yeah. And and and, Mike, I would say we don't spend a ton of time looking at metrics as a percentage of revenue. You know, I would say the the two big metrics, you know, we really you know, we we focus on most heavily internally, and we would encourage you to focus on, would be the first is take rate, which is, you know, contribution as a percentage of transaction value. And, you know, for us, that number, you know, has been decreasing a bit over time. And I would say, first off on that, that number for us tends to peak every year in the fourth quarter, which is when we have the largest health is the largest portion of our business. Patrick ThompsonCFO at MediaAlpha00:24:38And secondly, I would say it's been trending down over time as P and C has become and is continuing to become a larger percentage of our business. I would say third, one other thing we've seen is that is certain publishers have gotten larger. We've naturally seen a bit of compression in the take rates that we've seen with them kind of to reflect the increased scale that they've been able to realize. And so I would say those are the three biggest drivers. And then the other piece, which was, I think, implicit in the three things I talked about is the mix of open and private exchange because the private exchange has a lower take rate for us. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:25:26That that's helpful, Pat. Any any anything going on on the mix of clicks increasing meaningfully that's also impacting some of the the the profit margin KPIs we look at? Patrick ThompsonCFO at MediaAlpha00:25:42Yeah. And and, Mike, is what you're getting at the the relative mix of clicks, calls, and leads? Yes. Yeah. I I would say, you know, the the mix is changing a little bit, but really the big driver of that mix change within our business is going to be the mix of P and C versus Health, where the P and C business is very heavily click driven for us, whereas the Health business is a bit more balanced. Patrick ThompsonCFO at MediaAlpha00:26:10So it really is kind of a mix between vertical things. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:26:16Okay. Got it. That's helpful. I guess going back to, I guess, two part question on auto. Steve, you mentioned the potential you talked about tariffs and their potential impact. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:26:35Curious, in your 2Q guide, did you embed any conservatism from tariffs? And related, when we think back to three months ago, when you put out your 1Q twenty five guide, which was handily exceeded. Maybe in your prepared remarks, what changed? Think in your prepared remarks, you might have said March ended up being a lot better. I'm not saying being conservative isn't a good way to go, but I'm curious if something just dramatically changed versus kind of ninety days ago when you put out what appeared to be a conservative guide that was exceeded. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:27:20Thanks. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:27:24Yes. Pat can address that the first question about the forecast. Think with regard to how we guided for Q1, you know, I think as mentioned earlier in the call, don't think, you know, the things change so much as the initial conservatism with which carriers really started off the year, you know, which we highlighted started to wear off as the quarter wore on. And so we did have, you know, stronger performance than expected in March, you know, because I think the carriers are very profitable, right? They see heightened consumer shopping behavior. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:27:59It's hard for them to really ignore that and remain conservative or on the sidelines for too long in a market environment like that. So I think, you know, certainly when we gave that guidance we were seeing some of the conservatism from the carriers as the New Year started. You know, I think we did our best to point out that we suspected that this was an overly conservative start to the year, right? And that there was a possibility that things could improve as the quarter wore on. I just think that, you know, things improved and carriers really started to put robust budget into our marketplace, you know, perhaps a bit earlier than we expected. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:28:35And again, we saw that the growth in March and we've seen that continue into Q2. Patrick ThompsonCFO at MediaAlpha00:28:42And Mike, to address the other part of your question, I would say that on the tariffs and their potential impact on Q2, from a guidance standpoint, we guide to what we have a high degree of confidence in. And we're in a spot where April is pretty much in the books for us, and we're starting to get some visibility on what May looks like. And so we've extrapolated out for the balance of the quarter. And I think the view of tariffs and potential impact on Q2 is likely to be relatively muted. I think Steve, in his prepared remarks, said it could be something that impacts more of the later the latter part of the year, but probably too early to tell exactly what that might ultimately look like. Patrick ThompsonCFO at MediaAlpha00:29:31But I think we feel like we've guided for Q2 numbers that we have a pretty good degree of confidence in. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:29:41Got it. And probably nothing you can say on this, but any comments you can make on timeline for resolution to the legal inquiry that's been ongoing? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:30:00Yes. And I think you pointed as you pointed out, think it's difficult for us to really comment on this while we're actively engaged in discussions with the FTC staff, you know, both because we're limited in what we can disclose and because I think the timing of these types of negotiations particularly with the government body tends to be hard to predict. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:30:25Sorry, my last follow-up. Is there any kind of statutory timeline whereby something would have to be disclosed in a certain amount of time based on kind of what this has been going on for a while or just trying to fish for if there's anything that might come out into the public domain based on just the required disclosure? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:30:49Yeah, Mike. I'm not certain of this but to my knowledge there is no statutory timeline at play here. Patrick ThompsonCFO at MediaAlpha00:30:58Yes. And Mike, I would just say, if we reach a resolution, we'll update investors. Otherwise, we're going to keep kind of updating our disclosures and investors on a quarter to quarter basis. Operator00:31:12Your next question will come from the line of Andrew Spiegerman with TD Securities. Please go ahead, Andrew. Andrew KligermanManaging Director at TD Securities00:31:20Hey, good evening. First question on the private market versus open exchange. I wasn't quite clear on why more business will flow to open exchange and maybe, so maybe you can elaborate on what you were saying earlier. And then Pat, you mentioned that it would probably in the near term shift more toward private exchange. So year over year it went from 44.1% to 45.4%. Andrew KligermanManaging Director at TD Securities00:31:57How high could that private exchange proportion get in the near term? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:32:07Don't know, Pat, can start off the answer which is that, you know, what I was the point I was making was that I think as the first carriers to recover and the first publishers to really be able to take advantage recovery of the P and C market were the large advertisers and the large publishers. And so I think what you're seeing now as this, you know, recovery starts to build momentum, we're still in a position where the recovery is relatively head heavy, right, again compared to where we expect to be three quarters from now, four quarters from now. And so there's going to be more transactions generally speaking in the early part of a recovery like this because the private marketplace, or the seller exchange, you know, option that we have is really meant for our largest publishers to be able to work directly and contract directly, you know, with our largest advertisers. And so the point I was making is overall as the recovery starts to gain momentum and become more broad based both on the carrier side and in terms of attracting new publishers into our marketplace is that they the new entrants are going to be smaller, right, in nature. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:33:18And so most likely the growth, you know, at some point in this recovery is going to start to flow into the open exchange vis a vis the seller exchange. And I think what, Pat was pointing out was that notwithstanding this general trend, our seller exchange and open exchange mix tends to be vertical specific. And there's specific partnerships that we might be onboarding that might skew this one direction or another. Patrick ThompsonCFO at MediaAlpha00:33:46Makes a lot of I think that's a great thought. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:33:55Ahead, I'm glad we could clarify that. Andrew KligermanManaging Director at TD Securities00:33:58Yes, thank you for that. And then Steve, you made another comment in the Q and A that there, I think you said something like there are 10 carriers not punching where they should be. So you think that there's more activity to come going forward. So this is kind of a broad question for you, but kind of curious like in your view and it feels like the market has come back a lot, like on a scale of one to 10, where are we in terms of shopping activity? Are we like a seven or an eight? Andrew KligermanManaging Director at TD Securities00:34:39It feels like an eight, but I'm kind of curious as to how you see the market having reopened. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:34:50So I think there I heard a couple of different things. One is, you know, the point I was making was that of the top 10 like personal lines carriers or personal auto carriers, you know, there are still several who aren't punching their weight in terms of, you know, spending at historical in our channel, you know, or really investing in the secular growth of their direct to consumer offering and distribution channel. And so again, you know, for carriers who really aren't punching their weight based on where they were pre COVID or pre hard market, sorry, you know, I think you'd expect to see them starting to really ramp up their spend more quickly. But there are other carriers in the top 10, in the top 25, right, have been, you know, a bit slow to really invest in direct to consumer as a channel, you know, and that you'd expect to see those carriers really starting to make that secular shift to emphasizing direct to consumer channels more in the upcoming quarters and years. And so that was really the point I was trying to make with that. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:35:55Now you asked about where the shopping behavior is. I think it's a slightly different question because then we're talking about consumer shopping and switching activity that has been heightened because of all the rate increases that you saw, you know, flowing in and starting to earn in, you know, over the last few years. And certainly I think currently consumer shopping behavior and switching behavior remain at historical highs. But I think you're going to start to see that come down a bit as the rate increases that carriers are taking, you know, start to slow down. And so the rate increases that are being passed through to existing customers through the renewals also start to slow down. Andrew KligermanManaging Director at TD Securities00:36:43So if the shopping activity slows, Steve, would that mean kind of less activity for Media Alpha? Do you feel like there's a lot of tailwind left before things normalize? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:37:06You know, it's a great question. I think it's come both ways. And I would say that my general quick answer is going to be no, all right? And because I think consumer shopping activity being at very high levels, I think oftentimes for carriers act as an excuse to not spend too much on marketing because they're getting a lot of organic traffic. But the carriers being immensely profitable and actually needing to grow, that need is not going to go away. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:37:34And so in some ways I think there are going to be carriers who then invest more in advertising to try to fuel their growth because they can't rely on this ambient consumer shopping activity to generate new policies for them. And so certainly it might make it a little bit more difficult for our publishers to get interested consumers to shop on their site. But there again, if there's ample budget and appetite for carriers to grow, I think we're just firm believers that the comparison sites and the lead generation sites and the carrier sites that we work with among our publisher base will find a way to generate interested consumer shopping activity if there's ample budget on the part of carriers to support that. Andrew KligermanManaging Director at TD Securities00:38:19I see. So it sounds like you feel like there's some significant runway ahead for more? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:38:27Yes. Patrick ThompsonCFO at MediaAlpha00:38:28Yes. Andrew KligermanManaging Director at TD Securities00:38:29Okay. And then just one last one. So the customer help team, so you've taken this write down, I think it's like $11,000,000. As I looked back, it's a deal that you acquired back in Feb twenty two, Feb February of '20 '20 '2. So so maybe share with us a little bit what what happened there? Andrew KligermanManaging Director at TD Securities00:38:53Why why the why the write down after such a a short time? Patrick ThompsonCFO at MediaAlpha00:39:01Yeah. And Andrew, we acquired the customer helper team in 2022. As a reminder, it was a business that was focused on known and operated business focused on social media within the Medicare and health space. And the acquisition brought us some new capabilities. Would say, in general, it fell short of our expectations. Patrick ThompsonCFO at MediaAlpha00:39:28And as we've kind of continued to integrate the team and kind of focus on kind of our true strengths going forward, we've sunset a lot of those social marketing activities. And as a result, under kind of accounting policy, we had to run, you know, analyses on that, and we ultimately recognize the write off of certain intangible assets that we acquired from them. And so I would say, you know, it it's, you know, it's probably the last you will hear us talk about CHT and any of our files. Andrew KligermanManaging Director at TD Securities00:40:09It. Hey. Thanks a lot for answering all the questions. Patrick ThompsonCFO at MediaAlpha00:40:13No. Appreciate you asking. Operator00:40:18Your next question comes from the line of Eric Sheridan with Goldman Sachs. Eric SheridanAnalyst at Goldman Sachs00:40:26Thank you so much for taking the questions. In terms of looking out of the next twelve, eighteen months, I wanted to know if you could parse out some of the investments that almost should be viewed as fixed against where you want to take the platform and elements of growth looking out over the time horizon and where there could be elements of variability in the way you invest or protect margin if there was an overall slowdown in the broader macroeconomic activity, sort of elements of must invest versus elements where there could be flex and ability to respond to an environment shift? Thank you. Patrick ThompsonCFO at MediaAlpha00:41:04Yeah. And Eric, this is Pat. Are you thinking of this in terms of, like kind of overhead in people investments or in terms of commercial relationships or kind of in what context are you thinking about that? Eric SheridanAnalyst at Goldman Sachs00:41:18Frankly, a little bit of growth investments that you plan on making against what you see as the opportunity set over the next couple of years that you probably wouldn't want to lose sight of if there was a slowdown in the economy for a couple of quarters versus areas where you could be responsive to a slowdown and either slow the rate of investments or cut the fixed cost to protect the margin if there was such a slowdown? Patrick ThompsonCFO at MediaAlpha00:41:42Yes. And Eric, I appreciate the clarification on that. I would say, for us, we run very, very lean as a company. I think we ended Q1 with 146 employees. And if you look at what we did in 2022 and 2023, which was the hardest market, the worst market the P and C carriers have had in my lifetime. Patrick ThompsonCFO at MediaAlpha00:42:09We batten down the hatches. We had a reduction in force. And we did make some it was a lot of belt tightening and there were some cuts in there. But we kept the core team intact. We continued to hire selectively where there was business need. Patrick ThompsonCFO at MediaAlpha00:42:30And we think we positioned ourselves really well to take advantage of the market recovery that happened in 2024 and the the relatively strong market dynamics that we have today. And I think to the extent we needed to do something like that again in the future, we would look to the playbook that we executed in the past, which is you know, anything that we can live without, we live without. But, you know, our business, you know, has had cycles in the past, and, you know, the cycles can be painful on the downside. But a lot of, activity happens in the recovery and it is paramount to be well positioned for that recovery. And I think we will continue to execute the playbook that has treated us very well over the last fifteen years. Eric SheridanAnalyst at Goldman Sachs00:43:19Great. Really appreciate it. Thank you. Operator00:43:24Your next question is from the line of Ben Hendrix with RBC. Please go ahead, Ben. Ben HendrixVice President at RBC Capital Markets00:43:31Great. Thank you very much. Just wanted Ben HendrixVice President at RBC Capital Markets00:43:33to go back to your comments on the senior Medicare Advantage business and the hard market cycle. We saw, I guess, this week, Elevance Health announced that they will be removing nearly all of their Medicare Advantage plans from online marketing platforms. I get effective tomorrow. And I read that as kind of reaction to this elevated utilization environment and a desire to kind of sidestep some of the adverse selection they may be seeing considering they're one of the stronger growers this year. And just wanted to see just given that they're the number four largest MA carrier, if that is factoring in your thoughts through the back half of the year or the back part of the year. Ben HendrixVice President at RBC Capital Markets00:44:20And if that's a behavior that you're seeing from any other big MA carriers? Thanks. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:44:27Yeah, I'll take the first stab at that question. I think, you know, we're certainly not seeing, not having the discussions of investment discussions for the upcoming AEP period with carriers at this time. And so we're not it's too early for us to tell whether these actions that they're taking now will flow into the upcoming AEP. I do think that this is just a normal cycle of carriers or payers in this case, really just making adjustments that are needed to maintain their profitability in a time when they have challenging utilization rates and challenging payment rates as well which again I think are starting to be addressed by the new administration. And so as Pat mentioned I think that, you know, it's not technically a hard market but this hard market like environment for Medicare Advantage. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:45:18I think we will, you know, we'll be temporary and we'll continue to work with the carriers and we continue to believe that, you know, this $500,000,000,000 industry covering, you know, over 50% of seniors will continue to grow and will continue to move online as we've seen other insurance verticals do. And we believe that we're pretty well positioned to capitalize on that long term opportunity. Patrick ThompsonCFO at MediaAlpha00:45:42Yes. And Ben, I'll probably just add two things, which is I would say that Medicare has been similar to P and C and that certain carriers have taken action earlier, some have taken action later. And so we've seen folks be taking actions for four or five quarters now, and I'm sure there will still be more that are yet to come on that. And I would also say that I think the carriers are in a spot that's pretty tough, but I think some of the brokers are actually doing alright at the moment in the Medicare side. And, you know, while carriers are, you know, probably the the most exciting long term opportunity for us in Medicare, we've got good broker relationships. Patrick ThompsonCFO at MediaAlpha00:46:25And I think those relationships are, I think, generally doing all right at the moment. Ben HendrixVice President at RBC Capital Markets00:46:34Great. Thanks for the color. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:46:37Thanks, Ben. Operator00:46:38There are no further questions at this time. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:46:50Yes. Well, thanks, everyone. I think that concludes the call. Operator00:46:54Thank you everyone for joining today's call. You may now disconnect.Read moreParticipantsExecutivesSteve YiCo-Founder and Chief Executive OfficerPatrick ThompsonCFOAnalystsAlex LiloiaPartner at Hayflower PartnersMaria RippsManaging Director, Senior Research Analyst at Canaccord Genuity IncCory CarpenterInternet Equity Research at JP MorganTommy McJoynt-GriffithDirector at Keefe, Bruyette & Woods (KBW)Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital MarketsAndrew KligermanManaging Director at TD SecuritiesEric SheridanAnalyst at Goldman SachsBen HendrixVice President at RBC Capital MarketsPowered by Key Takeaways Media Alpha reported record Q1 financial results, with transaction value rising 116% year-over-year to $473 million and adjusted EBITDA doubling to $29.4 million (67% contribution margin). The P&C insurance vertical drove growth with a 200% year-over-year increase in transaction value and continues to see strong marketing spend, with Q2 P&C value expected to grow 65–75% year-over-year despite potential automotive tariff pressures. In the Health vertical, results matched expectations and management is scaling back under-65 business to focus on the larger, growing Medicare Advantage market, which should represent over 40% of Health transaction value in Q2. The company strengthened its reserve for an ongoing FTC matter by $5 million (bringing the total to $12 million) and incurred $6.9 million of related non-GAAP add-backs in Q1 as discussions with regulators continue. For Q2 2025, Media Alpha guided to $470–495 million in transaction value (+50% YoY), $235–255 million in revenue (+37% YoY), and $25–27 million in adjusted EBITDA (+39% YoY), while ending Q1 with $64 million cash and net leverage below 1×. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallMediaAlpha Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) MediaAlpha Earnings HeadlinesMediaAlpha Elects Directors and Approves Executive CompensationMay 20 at 6:29 PM | tipranks.comMediaAlpha, Inc. Executives to Present at William Blair 45th Annual Growth Stock ConferenceMay 20 at 4:21 PM | quiverquant.comURGENT: Someone's Moving Gold Out of London...People who don’t understand the gold market are about to lose a lot of money. Unfortunately, most so-called “gold analysts” have it all wrong… They tell you to invest in gold ETFs - because the popular mining ETFs will someday catch fire and close the price gap with spot gold. May 23, 2025 | Golden Portfolio (Ad)MediaAlpha to Present at the William Blair 45th Annual Growth Stock Conference on Wednesday, June 4, 2025May 20 at 4:01 PM | globenewswire.comZooming In On MediaAlpha's EarningsMay 7, 2025 | finance.yahoo.comMediaAlpha Inc (MAX) Q1 2025 Earnings Call Highlights: Record Growth in P&C Vertical and ...May 1, 2025 | finance.yahoo.comSee More MediaAlpha Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like MediaAlpha? Sign up for Earnings360's daily newsletter to receive timely earnings updates on MediaAlpha and other key companies, straight to your email. Email Address About MediaAlphaMediaAlpha (NYSE:MAX), through its subsidiaries, operates an insurance customer acquisition platform in the United States. It optimizes customer acquisition in various verticals of property and casualty insurance, health insurance, and life insurance. 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PresentationSkip to Participants Operator00:00:00Ladies and gentlemen, thank you for standing by. Hello? Thank you for standing by. My name is Carmen and would like to welcome everyone to the Media Alpha First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background. Operator00:00:23After the speakers' remarks, there will be a question and answer session. Thank you. I will now turn the call over to Alex LaLea, Investor Relations. Please go ahead. Alex LiloiaPartner at Hayflower Partners00:00:47Thanks, Carmen. Good afternoon, and thank you for joining us. With me are Co Founder and CEO, Steve Yee and CFO, Pat Thompson. On today's call, we'll make forward looking statements relating to our business and outlook for future financial results, including our financial guidance for the second quarter of twenty twenty five. These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Alex LiloiaPartner at Hayflower Partners00:01:13Please refer to our SEC filings, including our annual report on Form 10 ks and quarterly reports on Form 10 Q for a full explanation of those risks and uncertainties and the limits applicable to forward looking statements. All the forward looking statements we make on this call reflect our assumptions and beliefs as of today, and we disclaim any obligation to update such statements except as required by law. Today's discussion will include non GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of these non GAAP financial measures to the corresponding GAAP measures can be found in our press release and shareholder letter issued today, which are available on the Investor Relations section of our website. I'll now turn the call over to Steve. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:01:57Hey, thanks Alex. Hi everyone. Thank you for joining us. 2025 is off to an outstanding start as we delivered record first quarter financial results that exceeded our guidance across all key performance metrics. Our strong results were driven by continued strength in our P and C insurance vertical, supported by robust growth investments from several carriers amid solid underlying profitability in the personal auto insurance sector. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:02:24While automotive tariff developments may put pressure on profitability as the year progresses, we anticipate continued near term momentum and another strong quarter for our core TNC business. In our health insurance vertical, our first quarter performance was in line with expectations. Going forward, we've made the strategic decision to scale back certain areas of our 65 business as we continue to shift our focus to Medicare Advantage, a large and growing market where we believe we have a strong competitive position. With regard to the FTC matter, we continue to engage in constructive dialogue with the FTC staff in an effort to work towards a reasonable resolution. In connection with these evolving discussions, we increased our reserve related to this matter by $5,000,000 bringing the total reserve to $12,000,000 at the end of the quarter. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:03:15While we cannot predict the outcome, we remain committed to resolving the FTC's claims in a manner that's in the best long term interests of our shareholders. Looking ahead, we remain bullish on our near term outlook for auto insurance advertising spend. While the upcoming automotive tariffs has the potential to negatively affect the industry, carriers by and large are highly profitable at this time and are ready to react quickly by adjusting rates if needed. We're staying closely connected with our partners and remain focused on delivering high returns on advertising spend and providing performance driven marketing solutions that help them to exceed through different macroeconomic conditions. With that, I'll hand it over to Pat for a deeper dive into our first quarter performance and second quarter guidance. Patrick ThompsonCFO at MediaAlpha00:04:00Thanks, Steve. I'll start by walking through the drivers of our Q1 results, which beat expectations. Transaction value for Q1 was $473,000,000 up 116% year over year, driven by 200% year over year growth in our P and C vertical. P and C transaction value was up sequentially, above expectations, as several carriers meaningfully increased marketing investments in March. Transaction value in our Health vertical was down 17% year over year, in line with expectations. Patrick ThompsonCFO at MediaAlpha00:04:35Q1 adjusted EBITDA doubled year over year to $29,400,000 representing 67% of contribution, up from 52% in the prior year. Q1 adjusted EBITDA included $6,900,000 of add backs related to the FTC matter. These consisted of $1,900,000 of legal expenses along with an additional $5,000,000 reserve recorded in accordance with U. S. GAAP requirements. Patrick ThompsonCFO at MediaAlpha00:05:04We also recognized the $13,400,000 charge to write off certain intangible assets acquired as part of the DHT acquisition. Additionally, we have decided to exit the Travel vertical by the end of the second quarter, which contributed approximately $1,000,000 of transaction value and $100,000 of profit in Q1. Looking forward to Q2, we have seen continued strength in P and C carrier marketing investments, particularly among those maintaining profit margins at or above their target levels. Accordingly, we expect P and C transaction value levels to grow approximately 65% to 75% year over year. In our Health vertical, we expect transaction value to be down 25% to 30% year over year. Patrick ThompsonCFO at MediaAlpha00:05:52Is improving trends in Medicare are more than offset by a significant decline in under 65% as we scale back parts of that business. We expect Medicare to account for over 40% of our Health Verticals transaction value for the quarter. Moving to our consolidated financial guidance. We expect Q2 transaction value to be between $470,000,000 and $495,000,000 a year over year increase of 50% at the midpoint. We expect revenue to be between $235,000,000 and $255,000,000 a year over year increase of 37% at the midpoint. Patrick ThompsonCFO at MediaAlpha00:06:31We expect adjusted EBITDA to be between $25,000,000 and $27,000,000 a year over year increase of 39% at the midpoint. We expect overhead to increase sequentially by approximately $500,000 to $1,000,000 as we continue to selectively add headcount to support and drive growth. We generated significant cash flow and made solid progress in deleveraging our balance sheet during the quarter. Cash flow was $20,000,000 and we ended the quarter with approximately $64,000,000 of cash and a net debt to adjusted EBITDA ratio of less than 1x. Moving forward, we expect to convert a significant portion of adjusted EBITDA into unlevered free cash flow due to the operating efficiencies in our business, including minimal capital expenditures and low working capital needs. Patrick ThompsonCFO at MediaAlpha00:07:20With that, operator, we are ready for the first question. Operator00:07:24Thank you. Your first question comes from Maria Ripps with Canaccord. Maria, please go ahead with your question. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:07:32Great. Thanks so much for taking my questions, and congrats on the strong quarter. Well, thanks for all the color on the P and C vertical in the shareholder letter, and it looks like the strength is continuing here in Q2. I know you're not providing full year guidance, but any additional color maybe you can share on how carrier spend sort of may play out in the second half of the year, especially given tariffs? I guess is there anything sort of you're seeing in carrier behavior that gives you any early maybe indications or what are some sort of maybe considerations here to keep in mind? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:08:04Hey Maria, it's Steve. Thanks for your question. I think we continue to believe that overall the auto insurance marketplace, you know, remains very well positioned for a period of sustained growth. I mean, I think that, you know, our optimism for this space, right, is really goes back to the underlying profitability that we continue to see, you know, remaining very strong in the auto sector, right? You know, there's certain carriers who are not just, you know, at good profitability rates. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:08:37I think they have some carriers who are even above or better than their long term profitability goals. And I think that really bodes well, right, for, you know, what the upcoming quarters will bring in terms of the investment from these carriers into growth and customer acquisition. I do we do see I think quarter by quarter the market is gradually entering into a period of heightened competition. You know, we are seeing new carriers I think every quarter who are really shifting from rate taking and profitability focus to growth customer acquisition focus. So you're seeing the recovery and the participation on the demand side in our marketplace, you know, becoming more broad based I think every quarter. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:09:21I think one thing that bodes well for longer term growth as the year progresses is that, you know, with everything that I've just said, there's still top 10 carriers who really don't believe are punching nearly where they should be in terms of the rest in this channel, whether you, you know, measure that based on their historical levels of spend or just their overall market position. But with that said, I think all of these carriers, I mean we're really happy with where we are with our partnerships with these carriers because the level of integration that we have with them, I think the level of sophistication that they have with the internal marketing teams in their knowledge of this channel. And the product development discussions that we're having with them I think positioned them very well to be able to grow, you know, through the remainder of this year and next year as they continue the secular shift to emphasizing direct to consumer distribution, whether in place of agent based distribution or in addition to agent based distribution. So now I think the only sort of dark lining I think in the silver cloud is the potential for these automotive tariffs, right, to put some headwinds in carrier profitability in the second half of this year and next year. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:10:46And so I think you're already hearing from the carriers who are focused on this issue, right, that it's a little bit too early to tell exactly what the impact is going to be. But I think you're also seeing a consensus on a couple of things. One is that a lot of the carriers are at a pretty good rate right now. And so they have a bit of buffer for loss rates to actually go up. I think the second thing that you're seeing and hearing is that the impact of these automotive tariffs, you know, will be relatively moderate, And I think what we're seeing is estimates of between low to mid single digits that we expect to see layering in in the second half of this year. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:11:27And we believe that the carriers are pretty well positioned to react quickly to these rate increases or I'm sorry, to these loss cost increases by filing for rate increases I think pretty early in the cycle. And I say that because the carriers are all coming from a period of sustained unprofitability and I think remain very acutely aware of the need to react quickly to address any profitability concerns that start to pop up. And so I think for all of these reasons we think that the impact of automotive tariffs that we expect to see in the back half of this year and in 2026, you know, will generally be manageable by the overall industry and that the industry is going to continue to invest in customer acquisition and growth during this period. But it's something that we'll obviously keep a very close eye on and continue to update with you in upcoming quarters. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:12:19Great. That's very helpful. And then just a quick follow-up. Can you maybe refresh us on key dynamics across your open and private marketplaces? And maybe just talk about some of the reasons of benefits or maybe even use cases a carrier would opt to use a private marketplace? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:12:39Yes. And so I think with the private marketplaces I think that's a product offering that we have that's primarily designed for our largest publishers and their ability to work directly with our largest advertisers. You know, so it really covers the minority of the relationships that we create through our marketplace, you know, as we get a broader base of demand and I think a broader base of supply coming into the marketplace, you know, as the current I think growth cycle continues. I think you're going to see, you know, and more transactions really move from the seller exchange or not move from the seller exchange but you're going to see more of these transactions really happen in the open exchange. Because again, the seller exchange product that we have where parties can contract directly and pay us a platform fee for making that connection through our marketplace is really meant for large publishers connecting directly with large advertisers. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:13:41Great. That's very helpful. Thank you so much, Steve. Patrick ThompsonCFO at MediaAlpha00:13:44And this is Pat. I just wanted to add one thing to what Steve said there, which is that I think as you think about the open to private mix in our business, it's important to think about the vertical mix that we have as well. And so for us, historically, P and C is had a higher mix of private marketplace than has held. And one of the things that we have seen is that, for instance, if we were to if we win a big partner, that partner may be relatively more private and can shift the numbers a little bit in one direction. And so I think everything Steve said is correct, which over time, would expect to see more of the business going open in the short term. Patrick ThompsonCFO at MediaAlpha00:14:38Wouldn't be surprised if it went a little bit more private. Maria RippsManaging Director, Senior Research Analyst at Canaccord Genuity Inc00:14:42Got it. Thank you so much, Pat. Operator00:14:45Your next question comes from the line of Cory Carpenter with JPMorgan. Cory, please go ahead. Cory CarpenterInternet Equity Research at JP Morgan00:14:52Hey, good afternoon. I had two. Maybe the first is sticking on P and P. Steve, you said last quarter that pricing was down to start the year. It sounds like that picked back up again in March. Cory CarpenterInternet Equity Research at JP Morgan00:15:03Just curious what you think changed specifically in March? And then secondly, on the Health business, could you just talk more about your decision to scale back the under 65 business? You know, how much of that is kind of due to business conditions or, you know, could that have also perhaps been related to some of the FTC changes? Thank you. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:15:23Hey Corey, I'll address the first part of that question which is I don't know that anything really I think changed in March. I think what we saw was I think strong demand from carriers as the quarter progressed, you know, really manifesting itself in terms of having greater budget, right, access to greater budget, you know, as the quarter progressed. You know, I think that the reason for this is really just, you know, what we pointed to in the last quarter which is less of a change in the underlying I think economics and the growth demand that we're seeing from carriers. It was really just I think the conservatism that we saw from carriers as the year started coming on the heels I think of a Q4 where there was a heavy amount of spend in customer acquisition. And as we alluded to, you know, because the numbers were coming in so strongly for most carriers, I think there was a bit of, you know, more aggressive customer acquisition spend as we saw Q4 close out. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:16:30And I think as a result of that a lot of carriers took a bit of a more conservative position to start out the year. And I think the fact that, you know, we got allocated more budget and we saw great participation from carriers as the quarter progressed was really that in, you know, beginning of year conservatism really starting to wear off. And, you know, and we've certainly seen the strength that we saw in March really continue into Q2, which is embedded in our forecast. Patrick ThompsonCFO at MediaAlpha00:17:02Corey, this is Pat. I can address the second part of the question. And I would say, a company, we've already we've always prioritized compliance as kind of a core part of how we operate. And we're we are regularly reviewing and enhancing our compliance programs to try to stay ahead of regulations as they evolve and to kind of help drive industry best practices. And I would say that kind of as part of these efforts, we are proactively implementing some additional measures. Patrick ThompsonCFO at MediaAlpha00:17:33And a couple of things we've done, we've updated our partner code of conduct to reinforce the expectations on what partners can and cannot do, and we've expanded proactive monitoring of calls to ensure ongoing compliance with that code of conduct. And so, you know, I think our view is this is, you know, the kind of behavior we've demonstrated, you know, over years and years for us. You know, it's, you know, our focus really remains you know, having, having a great product, one that is transparent and accurate and that ultimately links up consumers, you know, with the right, you know, brokers, carriers, agents that can help them get their Cory CarpenterInternet Equity Research at JP Morgan00:18:14needs met. Thank you. Operator00:18:20Your next question comes from the line of Tommy McJoint with KBW. Please go ahead, Tommy. Tommy McJoynt-GriffithDirector at Keefe, Bruyette & Woods (KBW)00:18:28Hey, good afternoon, guys. Staying on the subject of the 65 segment, can you just kind of clarify exactly what you mean by scale back? Does that mean a wind down? And then when you think about the revenue or transaction value or I guess best would be kind of earnings mix of that 65 segment within Health, anything you can share to disclose around that? Patrick ThompsonCFO at MediaAlpha00:19:07I'm sorry. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:19:08On mute. I think yeah. Patrick ThompsonCFO at MediaAlpha00:19:10Sorry. I was I was on I was on mute there. So I would so, Tommy, I would say on that, you know, with the health biz or with the the 65 business, we said we were scaling down that business. And so I would not read that as being an exit. Rather, we are going to be taking a partial step backwards in it. Patrick ThompsonCFO at MediaAlpha00:19:34And I think we gave guidance for the upcoming quarter that we thought the Health vertical as a whole would be down 25% to 30%, and we thought Medicare would be improving overall. So hopefully, that can get you to a spot where you can start to kind of contextualize what is happening there to the business. And so we believe that business, we're going be kind of rebaselining that business over the coming quarters. Tommy McJoynt-GriffithDirector at Keefe, Bruyette & Woods (KBW)00:20:06Okay, got it. And then staying within the health side, looking at the Medicare Advantage, can you share what you guys see in terms of the health of that market? It seems like we've seen some sort of mixed reviews from some of the health care providers and some of the recent quarterly reports. So it would be helpful to hear your commentary. Patrick ThompsonCFO at MediaAlpha00:20:26Certainly. So it's Pat again. The Medicare Advantage market is one that is in a temporary hard market cycle. And I think our view is that it's actually relatively similar to some of the past cycles we've seen in the P and C space. And so as a reminder, we dealt with that 2022 and 2023. Patrick ThompsonCFO at MediaAlpha00:20:48And these cycles are normal, and they're temporary. And really, they're being driven by some of the carrier partners experiencing headwinds due to elevated loss costs, which are pressuring overall profitability. And as we look at the Medicare Advantage market, what we see is a business that over time has a lot of wind at its back, which is the number of seniors in eligible population for Medicare is growing. That population is increasingly opting into Medicare Advantage. Medicare Advantage is a it's an important purchase for people or important decision for folks, and it is one where the new folks aging in every year are much more kind of Internet enabled. Patrick ThompsonCFO at MediaAlpha00:21:36And we believe we're very well positioned to kind of help that industry navigate more and more to online as consumers, you know, look to shop there. And so it's it's an area where we think, you know, over a three, five, seven, ten year period, the opportunity is very, very attractive for us. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:21:57Know, Tommy, I'll add this is Steve. I'll also add that, you know, while Medicare Advantage has pretty broad bipartisan support, you know, I think at the margin certainly, you know, because it's a private market alternative to government run pay for service Medicare that it has marginally more support from Republican administrations. And so, you know, I think you're starting to see that play out a bit and a more favorable climate, you know, starting to emerge, right, you know, from, you know, increased payment rates which I think the industry was pleasantly surprised by the 5% plus payment rates that were set by CMS earlier this month. And I think that you're starting to see signs of a different regulatory approach that this administration is ready to take with Medicare Advantage. And again, while both parties tend to be pretty supportive of Medicare Advantage, I do think that over the next few years at the margins you'll see, you know, an administration that's going to take more of a growth oriented and a supportive position with regard to Medicaid, Medicare Advantage carriers. Patrick ThompsonCFO at MediaAlpha00:23:13Thank you. Operator00:23:16Your next question comes from the line of Mike Zaremski with BMO Capital Markets. Please go ahead, Mike. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:23:25Hey, great. Good afternoon. I know that there might be complicated question, but could you help unpack kind of what's contributing to the contribution margin ratio declining? Patrick ThompsonCFO at MediaAlpha00:23:43Yes. And and and, Mike, which contribution margin are you talking about as the percentage of revenue? Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:23:50Yes. Percentage of revenue. Patrick ThompsonCFO at MediaAlpha00:23:52Yeah. And and and, Mike, I would say we don't spend a ton of time looking at metrics as a percentage of revenue. You know, I would say the the two big metrics, you know, we really you know, we we focus on most heavily internally, and we would encourage you to focus on, would be the first is take rate, which is, you know, contribution as a percentage of transaction value. And, you know, for us, that number, you know, has been decreasing a bit over time. And I would say, first off on that, that number for us tends to peak every year in the fourth quarter, which is when we have the largest health is the largest portion of our business. Patrick ThompsonCFO at MediaAlpha00:24:38And secondly, I would say it's been trending down over time as P and C has become and is continuing to become a larger percentage of our business. I would say third, one other thing we've seen is that is certain publishers have gotten larger. We've naturally seen a bit of compression in the take rates that we've seen with them kind of to reflect the increased scale that they've been able to realize. And so I would say those are the three biggest drivers. And then the other piece, which was, I think, implicit in the three things I talked about is the mix of open and private exchange because the private exchange has a lower take rate for us. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:25:26That that's helpful, Pat. Any any anything going on on the mix of clicks increasing meaningfully that's also impacting some of the the the profit margin KPIs we look at? Patrick ThompsonCFO at MediaAlpha00:25:42Yeah. And and, Mike, is what you're getting at the the relative mix of clicks, calls, and leads? Yes. Yeah. I I would say, you know, the the mix is changing a little bit, but really the big driver of that mix change within our business is going to be the mix of P and C versus Health, where the P and C business is very heavily click driven for us, whereas the Health business is a bit more balanced. Patrick ThompsonCFO at MediaAlpha00:26:10So it really is kind of a mix between vertical things. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:26:16Okay. Got it. That's helpful. I guess going back to, I guess, two part question on auto. Steve, you mentioned the potential you talked about tariffs and their potential impact. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:26:35Curious, in your 2Q guide, did you embed any conservatism from tariffs? And related, when we think back to three months ago, when you put out your 1Q twenty five guide, which was handily exceeded. Maybe in your prepared remarks, what changed? Think in your prepared remarks, you might have said March ended up being a lot better. I'm not saying being conservative isn't a good way to go, but I'm curious if something just dramatically changed versus kind of ninety days ago when you put out what appeared to be a conservative guide that was exceeded. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:27:20Thanks. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:27:24Yes. Pat can address that the first question about the forecast. Think with regard to how we guided for Q1, you know, I think as mentioned earlier in the call, don't think, you know, the things change so much as the initial conservatism with which carriers really started off the year, you know, which we highlighted started to wear off as the quarter wore on. And so we did have, you know, stronger performance than expected in March, you know, because I think the carriers are very profitable, right? They see heightened consumer shopping behavior. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:27:59It's hard for them to really ignore that and remain conservative or on the sidelines for too long in a market environment like that. So I think, you know, certainly when we gave that guidance we were seeing some of the conservatism from the carriers as the New Year started. You know, I think we did our best to point out that we suspected that this was an overly conservative start to the year, right? And that there was a possibility that things could improve as the quarter wore on. I just think that, you know, things improved and carriers really started to put robust budget into our marketplace, you know, perhaps a bit earlier than we expected. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:28:35And again, we saw that the growth in March and we've seen that continue into Q2. Patrick ThompsonCFO at MediaAlpha00:28:42And Mike, to address the other part of your question, I would say that on the tariffs and their potential impact on Q2, from a guidance standpoint, we guide to what we have a high degree of confidence in. And we're in a spot where April is pretty much in the books for us, and we're starting to get some visibility on what May looks like. And so we've extrapolated out for the balance of the quarter. And I think the view of tariffs and potential impact on Q2 is likely to be relatively muted. I think Steve, in his prepared remarks, said it could be something that impacts more of the later the latter part of the year, but probably too early to tell exactly what that might ultimately look like. Patrick ThompsonCFO at MediaAlpha00:29:31But I think we feel like we've guided for Q2 numbers that we have a pretty good degree of confidence in. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:29:41Got it. And probably nothing you can say on this, but any comments you can make on timeline for resolution to the legal inquiry that's been ongoing? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:30:00Yes. And I think you pointed as you pointed out, think it's difficult for us to really comment on this while we're actively engaged in discussions with the FTC staff, you know, both because we're limited in what we can disclose and because I think the timing of these types of negotiations particularly with the government body tends to be hard to predict. Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital Markets00:30:25Sorry, my last follow-up. Is there any kind of statutory timeline whereby something would have to be disclosed in a certain amount of time based on kind of what this has been going on for a while or just trying to fish for if there's anything that might come out into the public domain based on just the required disclosure? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:30:49Yeah, Mike. I'm not certain of this but to my knowledge there is no statutory timeline at play here. Patrick ThompsonCFO at MediaAlpha00:30:58Yes. And Mike, I would just say, if we reach a resolution, we'll update investors. Otherwise, we're going to keep kind of updating our disclosures and investors on a quarter to quarter basis. Operator00:31:12Your next question will come from the line of Andrew Spiegerman with TD Securities. Please go ahead, Andrew. Andrew KligermanManaging Director at TD Securities00:31:20Hey, good evening. First question on the private market versus open exchange. I wasn't quite clear on why more business will flow to open exchange and maybe, so maybe you can elaborate on what you were saying earlier. And then Pat, you mentioned that it would probably in the near term shift more toward private exchange. So year over year it went from 44.1% to 45.4%. Andrew KligermanManaging Director at TD Securities00:31:57How high could that private exchange proportion get in the near term? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:32:07Don't know, Pat, can start off the answer which is that, you know, what I was the point I was making was that I think as the first carriers to recover and the first publishers to really be able to take advantage recovery of the P and C market were the large advertisers and the large publishers. And so I think what you're seeing now as this, you know, recovery starts to build momentum, we're still in a position where the recovery is relatively head heavy, right, again compared to where we expect to be three quarters from now, four quarters from now. And so there's going to be more transactions generally speaking in the early part of a recovery like this because the private marketplace, or the seller exchange, you know, option that we have is really meant for our largest publishers to be able to work directly and contract directly, you know, with our largest advertisers. And so the point I was making is overall as the recovery starts to gain momentum and become more broad based both on the carrier side and in terms of attracting new publishers into our marketplace is that they the new entrants are going to be smaller, right, in nature. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:33:18And so most likely the growth, you know, at some point in this recovery is going to start to flow into the open exchange vis a vis the seller exchange. And I think what, Pat was pointing out was that notwithstanding this general trend, our seller exchange and open exchange mix tends to be vertical specific. And there's specific partnerships that we might be onboarding that might skew this one direction or another. Patrick ThompsonCFO at MediaAlpha00:33:46Makes a lot of I think that's a great thought. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:33:55Ahead, I'm glad we could clarify that. Andrew KligermanManaging Director at TD Securities00:33:58Yes, thank you for that. And then Steve, you made another comment in the Q and A that there, I think you said something like there are 10 carriers not punching where they should be. So you think that there's more activity to come going forward. So this is kind of a broad question for you, but kind of curious like in your view and it feels like the market has come back a lot, like on a scale of one to 10, where are we in terms of shopping activity? Are we like a seven or an eight? Andrew KligermanManaging Director at TD Securities00:34:39It feels like an eight, but I'm kind of curious as to how you see the market having reopened. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:34:50So I think there I heard a couple of different things. One is, you know, the point I was making was that of the top 10 like personal lines carriers or personal auto carriers, you know, there are still several who aren't punching their weight in terms of, you know, spending at historical in our channel, you know, or really investing in the secular growth of their direct to consumer offering and distribution channel. And so again, you know, for carriers who really aren't punching their weight based on where they were pre COVID or pre hard market, sorry, you know, I think you'd expect to see them starting to really ramp up their spend more quickly. But there are other carriers in the top 10, in the top 25, right, have been, you know, a bit slow to really invest in direct to consumer as a channel, you know, and that you'd expect to see those carriers really starting to make that secular shift to emphasizing direct to consumer channels more in the upcoming quarters and years. And so that was really the point I was trying to make with that. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:35:55Now you asked about where the shopping behavior is. I think it's a slightly different question because then we're talking about consumer shopping and switching activity that has been heightened because of all the rate increases that you saw, you know, flowing in and starting to earn in, you know, over the last few years. And certainly I think currently consumer shopping behavior and switching behavior remain at historical highs. But I think you're going to start to see that come down a bit as the rate increases that carriers are taking, you know, start to slow down. And so the rate increases that are being passed through to existing customers through the renewals also start to slow down. Andrew KligermanManaging Director at TD Securities00:36:43So if the shopping activity slows, Steve, would that mean kind of less activity for Media Alpha? Do you feel like there's a lot of tailwind left before things normalize? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:37:06You know, it's a great question. I think it's come both ways. And I would say that my general quick answer is going to be no, all right? And because I think consumer shopping activity being at very high levels, I think oftentimes for carriers act as an excuse to not spend too much on marketing because they're getting a lot of organic traffic. But the carriers being immensely profitable and actually needing to grow, that need is not going to go away. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:37:34And so in some ways I think there are going to be carriers who then invest more in advertising to try to fuel their growth because they can't rely on this ambient consumer shopping activity to generate new policies for them. And so certainly it might make it a little bit more difficult for our publishers to get interested consumers to shop on their site. But there again, if there's ample budget and appetite for carriers to grow, I think we're just firm believers that the comparison sites and the lead generation sites and the carrier sites that we work with among our publisher base will find a way to generate interested consumer shopping activity if there's ample budget on the part of carriers to support that. Andrew KligermanManaging Director at TD Securities00:38:19I see. So it sounds like you feel like there's some significant runway ahead for more? Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:38:27Yes. Patrick ThompsonCFO at MediaAlpha00:38:28Yes. Andrew KligermanManaging Director at TD Securities00:38:29Okay. And then just one last one. So the customer help team, so you've taken this write down, I think it's like $11,000,000. As I looked back, it's a deal that you acquired back in Feb twenty two, Feb February of '20 '20 '2. So so maybe share with us a little bit what what happened there? Andrew KligermanManaging Director at TD Securities00:38:53Why why the why the write down after such a a short time? Patrick ThompsonCFO at MediaAlpha00:39:01Yeah. And Andrew, we acquired the customer helper team in 2022. As a reminder, it was a business that was focused on known and operated business focused on social media within the Medicare and health space. And the acquisition brought us some new capabilities. Would say, in general, it fell short of our expectations. Patrick ThompsonCFO at MediaAlpha00:39:28And as we've kind of continued to integrate the team and kind of focus on kind of our true strengths going forward, we've sunset a lot of those social marketing activities. And as a result, under kind of accounting policy, we had to run, you know, analyses on that, and we ultimately recognize the write off of certain intangible assets that we acquired from them. And so I would say, you know, it it's, you know, it's probably the last you will hear us talk about CHT and any of our files. Andrew KligermanManaging Director at TD Securities00:40:09It. Hey. Thanks a lot for answering all the questions. Patrick ThompsonCFO at MediaAlpha00:40:13No. Appreciate you asking. Operator00:40:18Your next question comes from the line of Eric Sheridan with Goldman Sachs. Eric SheridanAnalyst at Goldman Sachs00:40:26Thank you so much for taking the questions. In terms of looking out of the next twelve, eighteen months, I wanted to know if you could parse out some of the investments that almost should be viewed as fixed against where you want to take the platform and elements of growth looking out over the time horizon and where there could be elements of variability in the way you invest or protect margin if there was an overall slowdown in the broader macroeconomic activity, sort of elements of must invest versus elements where there could be flex and ability to respond to an environment shift? Thank you. Patrick ThompsonCFO at MediaAlpha00:41:04Yeah. And Eric, this is Pat. Are you thinking of this in terms of, like kind of overhead in people investments or in terms of commercial relationships or kind of in what context are you thinking about that? Eric SheridanAnalyst at Goldman Sachs00:41:18Frankly, a little bit of growth investments that you plan on making against what you see as the opportunity set over the next couple of years that you probably wouldn't want to lose sight of if there was a slowdown in the economy for a couple of quarters versus areas where you could be responsive to a slowdown and either slow the rate of investments or cut the fixed cost to protect the margin if there was such a slowdown? Patrick ThompsonCFO at MediaAlpha00:41:42Yes. And Eric, I appreciate the clarification on that. I would say, for us, we run very, very lean as a company. I think we ended Q1 with 146 employees. And if you look at what we did in 2022 and 2023, which was the hardest market, the worst market the P and C carriers have had in my lifetime. Patrick ThompsonCFO at MediaAlpha00:42:09We batten down the hatches. We had a reduction in force. And we did make some it was a lot of belt tightening and there were some cuts in there. But we kept the core team intact. We continued to hire selectively where there was business need. Patrick ThompsonCFO at MediaAlpha00:42:30And we think we positioned ourselves really well to take advantage of the market recovery that happened in 2024 and the the relatively strong market dynamics that we have today. And I think to the extent we needed to do something like that again in the future, we would look to the playbook that we executed in the past, which is you know, anything that we can live without, we live without. But, you know, our business, you know, has had cycles in the past, and, you know, the cycles can be painful on the downside. But a lot of, activity happens in the recovery and it is paramount to be well positioned for that recovery. And I think we will continue to execute the playbook that has treated us very well over the last fifteen years. Eric SheridanAnalyst at Goldman Sachs00:43:19Great. Really appreciate it. Thank you. Operator00:43:24Your next question is from the line of Ben Hendrix with RBC. Please go ahead, Ben. Ben HendrixVice President at RBC Capital Markets00:43:31Great. Thank you very much. Just wanted Ben HendrixVice President at RBC Capital Markets00:43:33to go back to your comments on the senior Medicare Advantage business and the hard market cycle. We saw, I guess, this week, Elevance Health announced that they will be removing nearly all of their Medicare Advantage plans from online marketing platforms. I get effective tomorrow. And I read that as kind of reaction to this elevated utilization environment and a desire to kind of sidestep some of the adverse selection they may be seeing considering they're one of the stronger growers this year. And just wanted to see just given that they're the number four largest MA carrier, if that is factoring in your thoughts through the back half of the year or the back part of the year. Ben HendrixVice President at RBC Capital Markets00:44:20And if that's a behavior that you're seeing from any other big MA carriers? Thanks. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:44:27Yeah, I'll take the first stab at that question. I think, you know, we're certainly not seeing, not having the discussions of investment discussions for the upcoming AEP period with carriers at this time. And so we're not it's too early for us to tell whether these actions that they're taking now will flow into the upcoming AEP. I do think that this is just a normal cycle of carriers or payers in this case, really just making adjustments that are needed to maintain their profitability in a time when they have challenging utilization rates and challenging payment rates as well which again I think are starting to be addressed by the new administration. And so as Pat mentioned I think that, you know, it's not technically a hard market but this hard market like environment for Medicare Advantage. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:45:18I think we will, you know, we'll be temporary and we'll continue to work with the carriers and we continue to believe that, you know, this $500,000,000,000 industry covering, you know, over 50% of seniors will continue to grow and will continue to move online as we've seen other insurance verticals do. And we believe that we're pretty well positioned to capitalize on that long term opportunity. Patrick ThompsonCFO at MediaAlpha00:45:42Yes. And Ben, I'll probably just add two things, which is I would say that Medicare has been similar to P and C and that certain carriers have taken action earlier, some have taken action later. And so we've seen folks be taking actions for four or five quarters now, and I'm sure there will still be more that are yet to come on that. And I would also say that I think the carriers are in a spot that's pretty tough, but I think some of the brokers are actually doing alright at the moment in the Medicare side. And, you know, while carriers are, you know, probably the the most exciting long term opportunity for us in Medicare, we've got good broker relationships. Patrick ThompsonCFO at MediaAlpha00:46:25And I think those relationships are, I think, generally doing all right at the moment. Ben HendrixVice President at RBC Capital Markets00:46:34Great. Thanks for the color. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:46:37Thanks, Ben. Operator00:46:38There are no further questions at this time. Steve YiCo-Founder and Chief Executive Officer at MediaAlpha00:46:50Yes. Well, thanks, everyone. I think that concludes the call. Operator00:46:54Thank you everyone for joining today's call. You may now disconnect.Read moreParticipantsExecutivesSteve YiCo-Founder and Chief Executive OfficerPatrick ThompsonCFOAnalystsAlex LiloiaPartner at Hayflower PartnersMaria RippsManaging Director, Senior Research Analyst at Canaccord Genuity IncCory CarpenterInternet Equity Research at JP MorganTommy McJoynt-GriffithDirector at Keefe, Bruyette & Woods (KBW)Michael ZaremskiManaging Director & Senior Equity Research Analyst at BMO Capital MarketsAndrew KligermanManaging Director at TD SecuritiesEric SheridanAnalyst at Goldman SachsBen HendrixVice President at RBC Capital MarketsPowered by