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Jun 30, 2023
MediaAlpha Q2 2023 Earnings Report
Announced second quarter 2023 financial results, exceeding expectations driven by strength in the Health insurance vertical, but impacted by low customer acquisition spend in Property & Casualty insurance.
Key Takeaways
MediaAlpha's second quarter results surpassed expectations, primarily due to the strong performance of its Health insurance vertical. However, the Property & Casualty insurance vertical experienced a decline due to low customer acquisition spend by carriers. The company reported revenue of $84.8 million, a net loss of $(20.0) million, and adjusted EBITDA of $3.6 million.
Revenue was $84.8 million, down 18% year over year.
Transaction Value was $125.9 million, down 31% year over year.
Gross margin was 16.2%, compared to 15.0% in the second quarter of 2022.
Net loss was $(20.0) million, compared to $(13.0) million in the second quarter of 2022.
Forward Guidance
For the third quarter of 2023, MediaAlpha expects Transaction Value between $95 million - $110 million, Revenue between $65 million - $75 million, and Adjusted EBITDA between $1.5 million and $3.5 million.
Positive Outlook
- Projecting operating expenses, net of Adjusted EBITDA addbacks, to be approximately $1.5 million lower than Q2 2023 levels.
- This is primarily driven by a full quarter impact of the workforce reductions implemented in May 2023.
- Continued expense discipline is also contributing to lower operating expenses.
- Expect third quarter Transaction Value in Health vertical to grow year over year at a rate similar to the second quarter.
- Adjusted EBITDA between $1.5 million and $3.5 million, representing a 15% year-over-year increase at the midpoint of the guidance range.
Challenges Ahead
- Guidance reflects a continuation of low customer acquisition spend levels by P&C carriers as they prioritize profitability over growth.
- Expect third quarter Transaction Value in P&C insurance vertical to decline year over year by 40% to 50%.
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