MediaAlpha's Q2 2025: Contradictions in P&C Growth, Health Vertical Focus, and FTC Implications

P&C Insurance Vertical Growth:
- MediaAlpha's P&C insurance vertical achieved 71% year-over-year growth in transaction value, driven by a $481 million total transaction value in Q2.
- The growth was fueled by increased marketing investments from leading auto insurance carriers, benefiting from positive industry dynamics.

Health Insurance Vertical Decline and Resilience:
- In the health insurance vertical, transaction value decreased by 32% year-over-year, with a contribution of about $1 million expected for Q3, reflecting a 54% year-over-year decline.
- While facing challenges, the business remains solidly profitable, with strong relationships with leading Medicare Advantage carriers, positioning for long-term growth.

FTC Resolution and Compliance Measures:
- MediaAlpha reached a settlement with the FTC, involving a $45 million payment, to resolve an investigation into its under-65 health insurance business.
- The resolution, despite disagreements with FTC allegations, is seen as a positive step to enhance competitive positioning and strengthen safeguards within the under-65 marketplace.

Adjusted EBITDA and Financial Guidance:
- Adjusted EBITDA for Q2 was $24.5 million, increasing 31% year-over-year, with expectations for record transaction value in Q3.
- MediaAlpha anticipates P&C transaction value to grow approximately 35% year-over-year in Q3, while health transaction value is expected to decline by 40% to 45%.

Capital Structure and Shareholder Returns:
- The company extends the maturity of certain debt obligations, providing financial flexibility for future investments and capital returns.
- MediaAlpha is focused on deploying capital intelligently, considering organic and inorganic growth opportunities, and potential shareholder returns.