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Mar 31, 2023
MediaAlpha Q1 2023 Earnings Report
MediaAlpha announced its first quarter 2023 financial results, with revenue down 22% year over year, but a ramp in marketing spend by a large carrier partner resulted in 108% sequential Transaction Value growth in P&C.
Key Takeaways
MediaAlpha's Q1 2023 saw a 22% decrease in revenue year-over-year, totaling $111.6 million. Despite this, a surge in marketing spend by a major carrier partner boosted Transaction Value growth in the P&C insurance vertical. However, this momentum was short-lived as the same carrier subsequently reduced advertising spend.
Revenue was $111.6 million, a 22% decrease year-over-year.
Transaction Value was $193.2 million, a 19% decrease year-over-year.
Gross margin was 16.5%, compared to 15.2% in the first quarter of 2022.
Net loss was $(14.6) million, compared to $(9.8) million in the first quarter of 2022.
Forward Guidance
For the second quarter of 2023, MediaAlpha expects Transaction Value between $107 million - $122 million, Revenue between $74 million - $84 million, and Adjusted EBITDA between $0.5 million and $2.5 million.
Positive Outlook
- Projecting operating expenses after Adjusted EBITDA add backs to be approximately $1.5 million lower than Q1 2023 levels.
- Workforce reductions are driving the decrease in operating expenses.
- Operating expenses are expected to remain at these levels in Q3 2023.
- Guidance reflects management of full-year profitability targets.
- Guidance reflects steps taken to address key drivers of first quarter underwriting results.
Challenges Ahead
- Guidance for Q2 2023 reflects a pullback in marketing spend by the largest P&C carrier partner.
- Second quarter Transaction Value in the P&C insurance vertical is expected to decline year-over-year by 40% to 50%.
- Second quarter Transaction Value in the Health vertical is expected to be roughly flat year-over-year.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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