Mediaalpha 2025 Q2 Earnings Sharp Net Loss Amid Revenue Surge

Mediaalpha (MAX) reported mixed results in Q2 2025, with revenue rising significantly but net income turning to a loss. The company exceeded expectations on the top line but missed on profitability, with no significant guidance adjustments noted.

Revenue
Mediaalpha’s total revenue surged by 41.1% year-over-year to $251.62 million in Q2 2025. The Property & casualty insurance segment was the standout, generating $227.16 million in revenue, while the Health insurance segment contributed $18.07 million. Life insurance revenue stood at $5.22 million, and other segments accounted for $1.16 million, rounding out the total.

Earnings/Net Income
Mediaalpha swung to a loss of $0.33 per share in Q2 2025, a dramatic shift from a profit of $0.07 per share in the prior year, representing a 571.4% negative change. Net loss for the quarter reached $22.53 million, compared to a net income of $4.42 million in 2024 Q2, a 609.8% deterioration. This highlights a significant decline in profitability despite strong revenue growth.

Price Action
The stock of Mediaalpha has posted modest gains, with a 1.77% increase during the latest trading day, a 3.09% climb during the most recent full trading week, and a 1.97% rise month-to-date.

Post-Earnings Price Action Review
A strategy of purchasing MediaAlpha (MAX) shares after a revenue increase quarter-over-quarter on the earnings release date and holding for 30 days has shown moderate returns over the past three years. The strategy achieved a 37.00% return, slightly underperforming the benchmark’s 49.40%. With a Sharpe ratio of 0.70, the returns were reasonably risk-adjusted, while the strategy's maximum drawdown of 0.00% underscored its capital-preserving nature during market downturns.

CEO Commentary
CEO Steve Yi attributed the strong Q2 performance to robust growth in the property & casualty (P&C) insurance vertical, driven by increased marketing investments from major auto carriers. He highlighted the FTC settlement resolving the under-65 health insurance investigation as a positive step forward. Yi expressed optimism about the company’s future, despite near-term challenges in the health vertical, and emphasized the strategic importance of capturing market share amid slowing rate increases in auto insurance. He also expressed confidence in long-term opportunities in direct-to-consumer digital health channels and the company’s ability to leverage its scale and technology for growth.

Guidance
MediaAlpha expects Q3 2025 transaction value to range between $545 million and $570 million, with revenue between $270 million and $290 million and adjusted EBITDA between $25.5 million and $27.5 million. The guidance reflects a 35% year-over-year growth in P&C transaction value and a 40% to 45% decline in health vertical transaction value, with a notable drop in under-65 contribution. Overhead is expected to rise by approximately $1 million sequentially.

Additional News
Within three weeks of the earnings release on August 6, 2025, MediaAlpha finalized a strategic partnership with a major health tech platform to expand its digital health offerings. Additionally, the company announced the appointment of a new Chief Technology Officer, enhancing its focus on technological innovation and customer engagement. In a separate move, MediaAlpha increased its investment in AI-driven customer analytics tools to improve targeting and personalization across its digital insurance platforms. These developments signal the company’s continued commitment to expanding its digital footprint and improving customer experience.