MAX - Earnings call transcript Q4 2024

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Operator

Thank you for standing by, and good day, everyone. My name is RJ and I will be your conference operator today. At this time, I would like to welcome everyone to the MediaAlpha, Inc. Fourth Quarter and Full Year of 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Alex Liloia. ahead. go Please

Alex Liloia

statements afternoon, guidance me Good CFO, you joining XXXX. results, make for Thompson. outlook business Thanks, future the for Co-Founder and first and With financial forward-looking will we are today's our and to CEO, us. our On and financial RJ. including call, thank relating for Steve Pat of Yi; quarter

of SEC cause filings, statements XX-Q, subject of our reports refer to risks actual could results are we obligation any that and update and uncertainties call we Please quarterly to such risks forward-looking assumptions this those to applicable required on as These to for report statements, uncertainties All as our including annual and the our explanation Form materially. forward-looking differ and make limits a by XX-K today, on fuller forward-looking law. statements Form and disclaim reflect the on except beliefs statements. and

non-GAAP section are measures can Today's these press to the which GAAP corresponding will are results. issued not the letter non-GAAP found website. Relations financial available measures, in of shareholder GAAP for include Investor release be our Reconciliations discussion of today, substitute our measures a financial and on which

I'll over now turn to the call Steve.

Steven Yi

for Thanks, Alex. you Hi, everyone. joining us. Thank

in improve for vertical. financial growth believe positioned our our results by Transaction grew Our market for delivering record grew EBITDA by carrier note, of key Emerging were auto sustained insurance market XXX% XXXX the than all from continue is our our metrics, We on outstanding. advertising in performance by We across XXXX to ended adjusted increases. competition decades, Value high results results insurance strength well more financial the XXX% fourth most market driven a difficult share and and year-over-year. quarter than auto as more insurance P&C

expect secular partners. gained to market the we've P&C share Transaction market past our and our attractive the more remain trends outgrow execution. superior in enable growth continue These we years, tripled secular and and Value to significant drivers Over to we X for as outcomes strong due than place,

In some Medicare under-XX fourth our in were demand. headwinds and vertical, Advantage health quarter impacted by softening in ongoing our insurance results

While important several pressures growth industry is opportunity our in dollar health, is nascent near-term we note hundred which the adoption. that billion a expect stage this to Advantage it's in market, at long-term online Medicare advertising of a vertical

industry the partnerships Advantage X We facing currently have XX this position, including challenges top the a strong to of we and resolved with be over market expect Medicare carriers, time.

As you of may effect scheduled the recall, last take end consent were January. rules, quarter, I X:X at discussed the to TCPA which

foreseeable FCC's were they revised court Before of we To they the We a do Value are, exceeded be expect future. they implemented authority. to in our appellate determined impact extent XXXX that leads. the expect would implemented, X% minimal federal only the was from rules not as Transaction

update under-XX settlement staff time, disclosures a the health we to on believe quarter-by-quarter we Federal in actively seriously have continue October discussions As engaged will with strongly XXth, basis. update Otherwise, related reach we we primarily acceptable are our the with We Trade very operation the from If effort compliance same FTC's received shared, to draft Commission demand allegations, and and a investors. insurance At initial resolution. on complaint our and we previously the in meritorious defenses. FTC of mutually the reach we'll a we business. take to an we disagree a resolution,

quarter guidance. dive performance With into and first our it to quarter that, for Pat deeper hand over I'll fourth a

Patrick Thompson

Thanks, Steve.

continued respectively. EBITDA of P&C exceeded across transaction metrics, Value seasonality, $XX.X million, all ranges end including up above and line and guidance million the normal record Our Transaction was high driven with fourth value our sequentially, adjusted in our quarter Value the and under results expectations our as pricing saw of $XXX.X as in investment as scale. expected to softening year-over-year, volumes Medicare Transaction below expectations slightly as higher in XX and we was headwinds well our by Advantage. in year-over-year marketplace in down health X% vertical

For for approximately health under a value or X/X at Within accounted transaction the the take vertical of rate. XX% XX% accounted total a Transaction higher of rate. $XXX slightly XXXX, for of our take million health, Value at XX

GAAP the these $XX U.S. of in matter. legal recorded million with of adjusted consisted representing $X year-over-year, These Inclusive accordance included million $X along million EBITDA adjusted add-backs QX expenses with of to add-backs, million reserve of FTC QX XXX% increased requirements. $X Our related a EBITDA growth.

to QX, our health by to QX. the typical sequential vertical, decline seasonal year-over-year, grow to and continue levels XX high teens Transaction pricing levels, the we expect XXX% P&C of continued approximately have single-digit QX a expect moderation by forward we trends in remainder a partially expect representing in a we uplift, To soften these in we In to value for to decline. percentage seen as quarter. transaction conditions offset Value under from the date, high have year-over-year. Looking volume

As Steve mentioned, opportunity see we in in Medicare Advantage. growth our vertical this long-term

Moving financial our to consolidated guidance.

million, between of value $XXX increase transaction at to million We midpoint. year-over-year XX% expect be a $XXX the QX and

a year-over-year revenue midpoint. be the between to XX% increase million $XXX at of expect million, We and $XXX

a to EBITDA adjusted be midpoint. increase at expect between XX% $XX.X million the and We year-over-year of $XX.X million,

selectively overhead by $X to and count million approximately continue increase as $XXX,XXX to support to drive expect growth. we to sequentially add head We

of with EBITDA deleveraging, X.Xx. to less XXXX ending than balance to adjusted quarter $XX progress debt the Turning sheet. of solid We've net made million cash and in the

adjusted we capital unlevered to needs. convert portion including expect flow cash forward, due the EBITDA low and capital a free to business, into working Moving of efficiencies our operating in expenditures significant minimal

for operator, that, question. the ready With first are we

Operator

question line Michael of the [Operator from Your first Instructions] comes Graham from Canaccord.

Michael Graham

And I when wanted questions you you here, filed us you that sort actually and had to on demand your I demand situation, last and the XX-Q little that. updated your momentum. strong $X the you the about quarter, could, the will business bit liquidity lots said there on settlement available -- be FTC million Congrats a have I I exceeded know of settlement see ask -- just please. of that your accrual. liquidity, if a

a for of little looking for why million right we can unfolding just color an the to you for comment extent was if you So accrual. process number bit how $X this could on and specifically ask the it

Steven Yi

as my I the ongoing mean, in mentioned we are I with prepared mean, Yes, staff. discussions remarks, in I FTC

our have we is can really progress. I Certainly, this Otherwise, our we'll matter, we that disclosures remarks. reach what tell basis in we've And what resolution our comment this discussions certainly beyond so filings a think when limit us hard you we'll it's disclosed as FTC to much to to well for investors. quarterly as just as settlement of update prepared

address it the million. about turn I'll to $X to the over questions Now Pat

Patrick Thompson

Great. question, Michael. I Thanks, Steve. appreciate the

So And of losses to side. the is on the estimated contingent million met, amount, book a estimate criteria. under that accounting. sort which on specifically we say liability is I reasonably probable And the reserve side, ASC U.S. be and which corresponds reserve effectively the a for $X to per criteria a on to range the XXX, calculated this those loss estimability our the estimable. would must we end met GAAP any is there of lower And of

number obviously based put to But the in is the on usual additional which so we caveat information. that's us And is subject ended change what that the for in, quarter getting future booked XX/XX.

Operator

of comes the Cory JPMorgan. Your Carpenter line next from from question

Cory Carpenter

date? expand comments it P&C seeing made offsetting about use the you as growth market we of in you're going if year? a framework ask but just have I giving the And a and we what maybe more wanted for on I kind know a to you're and forward XQ that of for pricing you moderating Can in should guide just recovery P&C XXXX, complete around of maybe not kind this how kind seasonality. to

Steven Yi

that you're from year carrier. seeing to outstanding. that finished P&C some very I like the Yes, for numbers really, looked sure.I XXXX reports we're I think look the what XXXX further much the seeing January need strong vertical. profitability the about early They you're bullish going look don't just is our you and of mean, the than or to think, extremely -- in

we is competition going more profitability our lot fuel and that XXXX so in think a beyond. to for And marketplace ultimately, going forward

note that that right, because to is of actions a are rate now thing one rate slow think to lot adequacy. achieved the carriers I down, starting have

no will you're see because increases I growth. premium additional going longer pricing think what fuel growth is pressure to

taking by acquiring because so think and customer are actions invest to has X and who probably, of slow customers do years. lot new it going of for rely looks the better the acquisition been heard remained levels have and is and so over they're jump taking our And a elevated just that good. you've I to I the you're into because in having of not rate so to grow marketplace to that at past from rate now carriers on to shopping, going think years, part front, X back really see all policies spending, as new they've Consumer what

well really beyond. for things auto in space all the bode more within this year I our put marketplace, And particularly those and think, a of so for lot together, X personal competition

pricing to what Now QX. with about speaking happened in QX

in growth we really a are seen that here dynamics the think I market dynamics while. haven't

carriers having XXXXs you their very what the so And early. profitability was of and essentially good in lot for locked relatively year a saw having targets

channels you the with a their most willingness quality highest carriers think customer really leaning trends quarter, to in, advantage in wanted scalable bit and little in unseasonably I shopping hot showed saw results what a acquisition run consumer and to invest in strong so into had high locked were QX QX. of And lot because what again, of they take the during they and the to

annual budgets that QX a new on set are we're ratios and now right, the it's with calendar combined year new And in basis. year typically and

conservatism you're the right? results what because what And just is QX that more bring, they seeing to going bit a look is know inherently, don't think in is outstanding. Again, year to early I on momentum expect in answer. for all continuing year this the in we the goes build the we've mentioned to seen what earlier see past dynamics the as as I really little

Operator

Sheridan Your line the Sachs. Eric Goldman of question next from from comes

Eric Sheridan

I X, can. Maybe if

from the the moving initiatives us of can out you platform some wide partners? to that array broaden on beyond appeal terms your category, of a key In of to update P&C

XXXX either driving keeping should also or in think a elements the part And product some you mind be as driving need whole, leverage platform what of XXXX? operating elements the we you when second would when about that strategic investments and key incremental you the think identify that be, of would then in you make the question in of about as are to growth

Steven Yi

certainly, going XX% I think direct-to-consumer advertising. has we Advantage with which mean, we growth I have sure. and continue that has in Medicare a $X.X Yes, opportunities, top tremendous really Medicare. we that surface fact partnerships we about for think biggest strong When growth it. amount really right, our innings with is for a really still at share the of for is foundation of of Medicare a Medicare to trillion has have to seniors, industry, And just we have carriers, that to online the left the what very X in scratch yet mean, the very, out within early then over believe growth P&C look market And I

just ways we within And other and about so and platform massive really to the how our into, get opportunities businesses are Medicare. P&C as other deploy think overlook to can't we

and specifically, up by we've agent insurance to we'd that business direct-to-consumer because you agent-based directly been been other expand partnerships agents. with their carriers we're where with working certainly we've we're carriers. the looking now one on And with commercial, until like in investing such verticals of things investing, those that now really is as our focused at Now working know the

continue so we the on to the there, And team technology. invest both and

drive focused those for And higher data bolstering yield efficiency I greater capabilities our drive efficiencies strategic terms advertising drive as other publishers then a our to well science and like investment, as for to both of companies think on in really to greater areas were advertisers. lot of

Operator

Your McJoynt from question from of next KBW. the comes line Tom

Jade Rahmani

the cost It's Can in margin? traffic? for does that Jade acquire talk trends on you Tommy. like impact to How the about your

Steven Yi

traded model I one comparable business business highlighting mean, we're have strong P&C. lot of Well, I the that publicly what between that a really a within O&O of basically you're our think model Yes. -- I -- presence, differences really the particularly of in is don't not and think companies our

and with on a sites. of direct publishers, those We work we're allow consumers And so customer shopping right, marketplace acquiring not insurance advertisers acquisition of or reach publisher hundreds costs. incurring to

ours, what is just well. industry, I increasing reinvest affecting the networks like certainly, customer publisher in and have as our area. as robust particularly from Google carrier that you're Currently, on acquisition, much that's like impact because I well and prices have their so side, budget of overall seeing you're in partners carriers an P&C as owned-and-operated really and seeing doesn't channels to upstream in display in it ability but to other us, And start But those think strong business on traffic not acquire some channels that in as partners a very our areas. we don't the that think of

Operator

comes question line next Your Instructions] [Operator the from Hendrix Ben RBC. from of

Benjamin Hendrix

your provide you on assumptions MA if I in Transaction on the little opportunity, comments expected maybe decline versus mid-teens growth the the X% XQ. heard to like, detail for the you Value in is decline sounds It could all if near in but XQ guidance more appreciate very in versus just XQ. term, a an right, Just

to kind in wanted get lower initially Just headwinds senior seeing since seeing in and of the you're that's the space. driving the lower kind you that specifics that's moved of if what industry started of

Patrick Thompson

headwinds And guidance Medicare is thanks health business specifically Medicare back continued And headwinds I were Advantage between -- continuing the quarters. year-over-year teens under-XX high there. for think in be kind X Pat. our say QX, the and kind through and This which where last kind the and into to we I our QX similar And some would speaking we've into And of that Advantage I for of QX, to was business, Ben, pretty seen of growth in And question. expecting the vertical in of year-over-year. under-XX health slowdown and business of in down the been saw QX health would the Advantage, is kind in say started for Medicare is we about Medicare over it's Yes. rates the QX. kind progress far seeing in The the year down that that QX. vertical, we talked the for half of are those has we're as we thus

in that that But I both bumps the so in well-documented Medicare side, pretty one vast. and the the opportunity face payers And is the investing some we're and some excited one scripted kind say speed Advantage we remarks Steve's the the in years would think It's to short-term behind, in challenges Q&A, we're Medicare outlined given in on of it's market. of come. to unlock his

Operator

our Q&A that and you call. gentlemen, Ladies Thank joining. and ends we your for all today's session, participation. appreciate That concludes

disconnect. now You may

MediaAlpha (MAX) 24 Feb 252024 Q4 Earnings call transcript