MediaAlpha NYSE: MAX executives said the company began 2026 with “record results across all of our key financial metrics,” citing continued strength in auto insurance carrier spending and broader carrier participation in its marketplace. Co-founder and CEO Steve Yi said those dynamics drove a favorable mix shift toward the company’s open marketplace, which lifted revenue and profitability above the company’s guidance range for the first quarter.
Auto insurance demand and open marketplace mix shift
Yi attributed the quarter’s performance to “continued strength in auto insurance carrier spend and further broadening of carrier participation,” adding that several carriers that had been “punching under the weight” have increased spend over the last several quarters. He said the resulting mix shift toward the open marketplace benefited margins and reflected MediaAlpha’s “estimated 3x scale advantage and unmatched proprietary data,” which he said supports predictive AI optimizations for partners.
On industry conditions, Yi said the underlying auto insurance market remains “healthy,” with carriers “strongly profitable” and “competing more aggressively by lowering their rates and increasing their advertising spend as they prioritize policy growth.” He added that while underwriting margins have started to decline from record levels, they remain “robust by historical standards.”
During Q&A, Yi said he has not seen leading carriers pull back on advertising spend. “They’re maintaining their levels of spend,” he said, while MediaAlpha is seeing accelerating growth from non-leading carriers. Yi described an ongoing expansion of demand as more carriers, including those in the “top 15, top 20,” increasingly “lean into growth marketing” and build direct-to-consumer channels, shifting distribution costs from agent commissions to advertising.
JPMorgan’s Cory Carpenter asked whether macro uncertainty had changed spending expectations. Yi said MediaAlpha has been “pleasantly surprised” by growth from carriers that historically were not large spenders on the platform, and he argued the broadening of demand still has room to run. He said some carriers outside the top tier are allocating “2%-3%” of their advertising budget to MediaAlpha, versus benchmarks he expects to be “somewhere between 10%-20%.”
On macro factors such as war, gas prices, and inflation fears, Yi said MediaAlpha is not seeing carriers take action “right now based on any fears of inflation,” while noting impacts could be mixed, such as reduced driving lowering frequency but higher oil prices potentially contributing to higher car prices and claim severity.
LLM traffic, advertising monetization, and new consumer experience
Yi said MediaAlpha is seeing early signs that consumers beginning their insurance shopping on large language models (LLMs) may be driving incremental referrals to its marketplace, though he emphasized it is “not yet material” to results. He also pointed to what he called a “significant strategic shift” by a leading LLM toward advertising monetization.
Pressed for specifics by KBW’s Tommy McJoynt, Yi said he was referring to OpenAI’s announcement that ChatGPT intends to increase reliance on advertising monetization, including a stated goal of roughly “$100 billion in ad revenue” by 2030, which he described as about “4x the previous forecast.” Yi said the move toward an advertising model, rather than a “closed commerce model,” is a positive for the broader industry and could become a “significant tailwind” over the next two to three years.
Yi also said MediaAlpha launched autoinsurance.net, which he described as a “ChatGPT-powered shopping experience” intended to simplify the consumer journey while keeping carriers in control of brand, compliance standards, and quoting processes. He characterized it as an “early proof of concept product.”
First-quarter financial results and balance sheet actions
CFO Pat Thompson reported first-quarter revenue of $310 million, which he said was “above the high end of our guidance range,” reflecting the favorable open marketplace mix shift. Adjusted EBITDA was $31.4 million, up 7% year over year. Thompson said MediaAlpha converted 64% of contribution to adjusted EBITDA due to an efficient operating model and disciplined expense management.
Excluding Under-65 Health, Thompson said the company’s “core business performance was very strong,” with revenue and adjusted EBITDA each growing 28% year over year.
MediaAlpha also completed a refinancing of its credit facilities during the quarter. Thompson said the company put in place a new $150 million senior secured term loan and a $60 million revolving credit facility, both maturing in March 2031. He said the refinancing extends the company’s maturity profile and provides “enhanced financial flexibility.” MediaAlpha ended the quarter with $26.1 million in cash and $45 million undrawn on the revolver.
Capital return and free cash flow drivers
Management highlighted share repurchases and reiterated a free cash flow outlook for the year. Yi said MediaAlpha is “executing aggressively” on its repurchase authorization and has returned over $25 million of capital to shareholders “already this year.” Thompson said the company repurchased approximately 2.6 million shares for $25 million, representing about 4% of the company, and remains on track to complete “the vast majority” of the remaining $60 million under its $100 million authorization in 2026.
Asked why cash flow did not come through in the first quarter, Thompson cited several cash uses, including an $11.5 million payment to the FTC, which he said was the “second and final payment” to the agency. He also pointed to annual items that occur in the first quarter, including employee bonuses and annual payments under the company’s tax receivable agreement. Thompson said adjusted EBITDA-to-free-cash-flow conversion should be “very strong” for the balance of the year.
Regarding the refinancing economics, Thompson said changes to the interest profile were “very minimal,” with the most meaningful cash flow change being “slightly lower” amortization. He cited $7.5 million annually of amortization paid quarterly.
Second-quarter guidance and metric changes
Looking ahead, Thompson provided second-quarter guidance and announced a change in how MediaAlpha will present guidance going forward. The company will guide to contribution and “will no longer report transaction values,” which Thompson said was because contribution is “a more relevant metric” for evaluating performance relative to publicly traded peers.
For the second quarter of 2026, MediaAlpha expects:
- Revenue: $290 million to $310 million (approximately 19% year-over-year growth at the midpoint)
- Contribution: $45.5 million to $48.5 million (approximately 18% year-over-year growth at the midpoint)
- Adjusted EBITDA: $28 million to $30.5 million (approximately 19% year-over-year growth at the midpoint)
Thompson said the outlook includes an approximately $2 million year-over-year decline in contribution from Under-65 Health. Excluding Under-65 Health, the company expects contribution to increase 25% and adjusted EBITDA to increase 31% year over year.
For the second quarter, Thompson said the health vertical is expected to be about 1% of total revenue after MediaAlpha made a strategic decision to limit Under-65 Health open marketplace participation to carriers only, which he said simplifies operations. Yi added that Under-65 Health continues to represent a “diminishing portion” of the overall mix, aligned with company plans, and reiterated his view that Medicare Advantage is the long-term growth opportunity in health.
For the remainder of 2026, Thompson said the company is entering a “more normalized growth environment” in P&C and expects growth rates to moderate in the back half of the year as it laps stronger prior-year comparisons. For the full year, management reiterated expectations to generate $90 million to $100 million in free cash flow.
In additional company updates, Yi said MediaAlpha earned a Great Place to Work certification for the 10th consecutive year, with 95% of team members affirming it is a great place to work.
About MediaAlpha NYSE: MAX
MediaAlpha, Inc is a technology company that operates a real-time digital marketplace for the distribution of insurance and adjacent services. The company's platform connects buyers—consumers seeking insurance policies—to sellers, including insurance carriers and distribution partners, through programmatic bidding and data-driven pricing. By leveraging transaction-level data and proprietary auction mechanics, MediaAlpha enables carriers to acquire customers more efficiently and at scale.
The firm offers a suite of products that help clients optimize marketing spend and improve conversion rates.
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