MediaAlpha Q3 Earnings Call Highlights

Key Points

• Record Q3 performance: Revenue rose 23% year over year to $376 million, contribution increased 26% to $57 million, and adjusted EBITDA grew 36% to $39 million, exceeding guidance.
• Broad-based insurance marketplace growth: Home and renters revenue more than doubled to $66 million, while agent revenue rose 46% to $21 million as MediaAlpha expanded its active agent network and carrier participation.
• Positive outlook and aggressive capital returns: Management expects double-digit growth beyond 2027 and projects Q4 revenue of $355 million to $375 million. Since September 2025, the company has repurchased about $115 million of stock, reducing shares outstanding by approximately 16%.

MediaAlpha NYSE: MAX reported record third-quarter results, with revenue, contribution and adjusted EBITDA exceeding the high end of its guidance ranges as insurance carriers increased advertising budgets and broadened their participation in the company’s marketplace.

Revenue rose 23% year over year to $376 million in the third quarter, while contribution increased 26% to $57 million and adjusted EBITDA grew 36% to $39 million, CFO Tigran Sinanyan said. Excluding the under-65 health business, revenue and adjusted EBITDA increased 26% and 42%, respectively.

“The third quarter was the best quarter in MediaAlpha’s history across all of our key metrics,” Co-Founder and CEO Steve Yi said. He attributed the results to intensifying competition among carriers seeking policy growth, which increased spending on the company’s platform and produced higher volumes for supply partners.

Insurance marketplace growth broadens

Auto insurance revenue increased 17% year over year and remained the company’s largest growth driver in its property-and-casualty insurance vertical. Home and renters revenue reached a quarterly record of $66 million, up 116% from a year earlier.

Yi said home-insurance growth reflected both improving market conditions and gains in wallet share as traditional carriers and online direct-to-consumer insurers devoted more budget to the platform. During the question-and-answer session, he said the homeowners market has been recovering as insurers add capacity in states including Florida, California and Texas.

The company also expanded its insurance-agent business. MediaAlpha worked directly with more than 3,000 active agents at the end of the quarter, compared with about 2,000 a year earlier. Agent revenue rose about 46% to $21 million from $14 million in the prior-year period.

Yi said nearly half of insurance policies are still written through agents, despite a longer-term shift toward direct-to-consumer distribution. The company expects to gain share by applying programmatic capabilities to agent lead purchasing, including through its Farmers Lead Marketplace partnership.

MediaAlpha said its platform powered more than $2.5 billion of annualized P&C advertising spending during the quarter. Yi said a recent carrier test using the company’s proprietary optimization models increased conversion rates by roughly 80%, resulting in more sales at a lower cost per policy.

Operating leverage and customer diversification

Sinanyan said the company’s contribution growth outpaced revenue growth because of a mix shift toward its open marketplace, where carriers use MediaAlpha for optimization and account-management services. The company converted 69% of contribution into adjusted EBITDA during the quarter, its highest level since 2024.

Customer concentration also improved, according to Sinanyan. Three carriers each accounted for more than 10% of third-quarter revenue, while the fourth-largest carrier represented 9.6%.

Looking toward 2027 and beyond, management said it expects double-digit growth across revenue, contribution and adjusted EBITDA. Sinanyan cited continued investment by the company’s two largest carrier partners, accelerating spending from carriers ranked three through five, greater digital-ad penetration in P&C insurance and the ongoing shift toward direct distribution.

He said digital advertising penetration in P&C insurance is about 40%, compared with about 80% in other industries, while long-term P&C premium growth has been roughly 6% annually.

Capital allocation and outlook

MediaAlpha deployed $21 million during the third quarter toward share repurchases and reductions of obligations under its tax receivable agreement, or TRA. The company repurchased about 800,000 shares for $9 million at an average price of $11.25 per share.

In September, the company repurchased $23 million of TRA liability for $12 million, a 47% discount that produced an $11 million third-quarter gain. Since the quarter ended through Oct. 26, MediaAlpha repurchased an additional 1.8 million shares for $18 million, or an average $10.38 per share.

Since September 2025, the company has repurchased approximately $115 million in stock, reducing shares outstanding by about 11.2 million, or 16%. It had used $82 million of its $100 million repurchase authorization as of Oct. 26. MediaAlpha ended the quarter with $18.7 million in cash and $30 million available under its revolver, and drew $10 million on that revolving facility after quarter-end to support early fourth-quarter repurchases.

For the fourth quarter, the company projected revenue of $355 million to $375 million, contribution of $54 million to $57 million, and adjusted EBITDA of $36 million to $39 million. At the midpoint, the forecasts imply year-over-year growth of about 25% for revenue, 18% for contribution and 22% for adjusted EBITDA.

MediaAlpha expects the health vertical to account for about 4% of fourth-quarter revenue. Its adjusted EBITDA outlook incorporates an approximately $900,000 year-over-year decline in contribution from under-65 health. The company maintained its expectation for full-year 2026 free cash flow of $90 million to $100 million.

Management’s view on AI-driven shopping

Management said it has not yet seen an impact from personal AI agents shopping for insurance on consumers’ behalf. Yi said AI could shape the early stages of research and shopping, but he expects carriers to retain control of policy quoting and binding through their own systems.

He said insurers, particularly direct-to-consumer and captive-agent carriers, have substantial incentives to control brand interactions, customer disclosures and the regulated purchase process. Yi added that AI could ultimately support direct consumer enrollment in more complex products such as homeowners, small-business and commercial insurance by helping consumers better understand their options without requiring agent assistance.

MediaAlpha expects advertising to become a principal monetization model for consumer AI services, creating additional channels for supply partners. Yi said the company believes its publisher base can participate in emerging AI advertising ecosystems while continuing to generate insurance-shopping traffic through other media channels.

About MediaAlpha (NYSE:MAX)

MediaAlpha, Inc operates a technology platform that helps insurance carriers and distributors acquire customers through digital channels. Its marketplace connects consumers who are shopping for insurance with providers seeking qualified prospects, using data, analytics and automated systems to facilitate the matching process.

The company's platform supports customer acquisition across insurance categories, including property and casualty products such as auto and home insurance, as well as health, life and Medicare-related coverage.

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