MediaAlpha Settles FTC Investigation for $45 Million

MediaAlpha has reached a settlement with the FTC to resolve an investigation into its under-65 health insurance sub-vertical. The company will pay $45 million and agree to additional disclosures, content review processes, and measures to screen and monitor partners. The settlement is not expected to impact MediaAlpha's core Property & Casualty insurance vertical or Medicare sub-vertical. The $45 million payment is equal to $0.61 per fully diluted share and will be funded with existing cash on hand.

MediaAlpha Inc. (NYSE: MAX) has reached a settlement with the Federal Trade Commission (FTC) to resolve an investigation into its under-65 health insurance sub-vertical. The company will pay a $45 million fine and agree to additional disclosures, content review processes, and measures to screen and monitor partners. The settlement, announced on July 2, 2025, is not expected to impact MediaAlpha's core Property & Casualty (P&C) insurance vertical or Medicare sub-vertical. The $45 million payment, equivalent to $0.61 per fully diluted share, will be funded with existing cash on hand.

The FTC investigation focused on the under-65 health insurance segment, which has historically operated at higher margins. The settlement includes a $45 million payment, which is expected to have a minimal impact on the company's overall financial performance. MediaAlpha's CEO, Steve Yi, stated that the FTC matter is fully resolved, allowing the company to focus on its core P&C business and continued growth in the P&C insurance vertical.

In its Q2 2025 financial results, MediaAlpha reported a 41% year-over-year (YoY) increase in revenue to $251.6 million and a record Transaction Value of $480.8 million, driven by exceptional growth in the P&C insurance vertical. However, the company recorded a net loss of $(22.5) million compared to a $4.4 million profit in Q2 2024, primarily due to a $33 million reserve related to the FTC settlement. Adjusted EBITDA improved to $24.5 million, up from $18.7 million YoY.

For Q3 2025, MediaAlpha expects Transaction Value between $545-570 million and revenue of $270-290 million, with the P&C insurance vertical projected to grow 35% while the Health insurance vertical is expected to decline 40-45% YoY. The under-65 health segment is projected to drop 54% in transaction value and 77% in contribution.

The resolution of the FTC inquiry removes a significant regulatory overhang, but the $45 million total reserve indicates the substantial financial impact of this matter. Management's forward guidance suggests continued momentum in their core P&C business, but the decline in their traditionally higher-margin health segment presents a structural challenge to overall profitability going forward.

References:
[1] https://www.stocktitan.net/news/MAX/media-alpha-announces-second-quarter-2025-financial-vb94rbm31icj.html