MediaAlpha (MAX) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 was $178.3 million, up 110% year-over-year, with Transaction Value reaching $321.8 million, up 156%, marking record performance driven by increased P&C carrier spending.

• Net income was $4.4 million, reversing a net loss of $20.0 million in Q2 2023, reflecting higher gross profit and lower equity-based compensation.

• Adjusted EBITDA hit a record $18.7 million, up 421.7% year-over-year, supported by revenue growth and expense discipline.

• P&C insurance vertical led growth, with transaction value up over 300% year-over-year, while health insurance revenue declined due to a partner exit.

• Management addressed and refuted a recent short seller report, affirming confidence in business practices.

Financial highlights

• Gross profit for Q2 2024 was $31.7 million, up from $13.8 million in Q2 2023, with gross margin improving to 17.8%.

• Adjusted EBITDA margin was 10.5% for Q2 2024, up from 4.2% a year ago.

• Cash and cash equivalents increased to $28.7 million, with $14 million generated in Q2 and net cash from operations of $23.3 million for the first half of 2024.

• Diluted EPS was $0.07, compared to $(0.32) in Q2 2023.

• One-time contract termination fee of $1.7 million received due to a partner ceasing operations.

Outlook and guidance

• Q3 2024 revenue expected between $240 million and $255 million, a 232% year-over-year increase at midpoint.

• Q3 Transaction Value projected at $415–$435 million, up 290% year over year at midpoint.

• Q3 adjusted EBITDA forecasted at $22 million to $24 million, up over 540% year-over-year at midpoint.

• Overhead expected flat to slightly up in Q3, with a $1 million increase in Q4 for selective headcount additions.

• Management expects continued improvement in the P&C insurance market but cannot predict the pace or impact of recovery beyond Q3 2024.