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MediaAlpha(MAX) - 2024 Q4 - Annual Report
MAXMediaAlpha(MAX)2025-02-24 21:43
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Financial Performance - For the year ended December 31, 2024, the company generated 1.5billioninTransactionValue,a151.41.5 billion in Transaction Value, a 151.4% increase from 593.4 million in 2023[30][46]. - Revenue for the same period was 864.7million,reflectinga122.8864.7 million, reflecting a 122.8% growth compared to 387.5 million in 2023[30]. - The company reported a net income of 22.1millionfor2024,comparedtoanetlossof22.1 million for 2024, compared to a net loss of 56.6 million in 2023, marking a turnaround in profitability[426]. - The company's revenue for the year ended December 31, 2024, was 864.7million,asignificantincreasefrom864.7 million, a significant increase from 388.1 million in 2023, representing a growth of 122%[417]. - Cost of revenue for 2024 was 721.1million,upfrom721.1 million, up from 321.4 million in 2023, indicating an increase of 124%[426]. - Total current assets increased to 189.9millionin2024from189.9 million in 2024 from 74.6 million in 2023, reflecting a growth of 154%[423]. - Total liabilities rose to 308.7millionin2024,upfrom308.7 million in 2024, up from 248.4 million in 2023, an increase of 24%[423]. - The company’s cash and cash equivalents increased to 43.3millionin2024from43.3 million in 2024 from 17.3 million in 2023, a growth of 150%[423]. - The company’s total stockholders' deficit improved to (46.2)millionin2024from(46.2) million in 2024 from (94.4) million in 2023, showing a reduction of 51%[423]. - Operating cash flow for 2024 was 45,872thousand,upfrom45,872 thousand, up from 20,231 thousand in 2023 and 28,274thousandin2022,indicatingstrongoperationalperformance[432].CustomerAcquisitionandMarketTrends−Theplatformfacilitatedanaverageof9.9millionConsumerReferralspermonthin2024,leadingtoapproximately119millionConsumerReferralsfortheyear[27][47].−Thecompanyservedover1,000insurancepartnersin2024,upfromover920in2023[46].−Clicksaccountedfor84.128,274 thousand in 2022, indicating strong operational performance[432]. Customer Acquisition and Market Trends - The platform facilitated an average of 9.9 million Consumer Referrals per month in 2024, leading to approximately 119 million Consumer Referrals for the year[27][47]. - The company served over 1,000 insurance partners in 2024, up from over 920 in 2023[46]. - Clicks accounted for 84.1% of total Transaction Value in 2024, compared to 69.4% in 2023, while calls and leads decreased to 9.4% and 6.5%, respectively[53]. - The insurance industry is projected to grow from 146 billion in customer acquisition spending in 2021 to approximately 176billionby2025[40].−Digitaladvertisingspendintheinsurancesectorwas176 billion by 2025[40]. - Digital advertising spend in the insurance sector was 9 billion in 2023, expected to rise to around 14billionby2026[35].−ThehealthinsuranceverticalexperiencesseasonalstrengthduringthefourthquarterduetoincreasedConsumerReferralsrelatedtotheMedicareannualenrollmentperiod[85].OperationalEfficiencyandTechnology−Thetechnologyplatformenablesinsurancecarrierstooptimizecustomeracquisitioncostsbasedonexpectedcustomerlifetimevalue,enhancingoperationalefficiency[56].−Theplatformisdesignedtoenhanceautomatedbuyingstrategiesandgranularpricediscoveryprocesses,addressinginefficienciesintraditionalcustomeracquisitionmodels[77].−Theproprietarytechnologyplatformprovidessellerswithoptimizationtoolstomaximizeyieldfromhigh−intentconsumers[71].−Theself−servicemodelallowsDemandPartnerstomanageconsumeracquisitionspendinrealtimewithminimalinvolvementfromthecompany[62].EmployeeandOrganizationalInsights−Thecompanyemployedanaverageof139individualsin2024,generating14 billion by 2026[35]. - The health insurance vertical experiences seasonal strength during the fourth quarter due to increased Consumer Referrals related to the Medicare annual enrollment period[85]. Operational Efficiency and Technology - The technology platform enables insurance carriers to optimize customer acquisition costs based on expected customer lifetime value, enhancing operational efficiency[56]. - The platform is designed to enhance automated buying strategies and granular price discovery processes, addressing inefficiencies in traditional customer acquisition models[77]. - The proprietary technology platform provides sellers with optimization tools to maximize yield from high-intent consumers[71]. - The self-service model allows Demand Partners to manage consumer acquisition spend in real time with minimal involvement from the company[62]. Employee and Organizational Insights - The company employed an average of 139 individuals in 2024, generating 1.5 billion in Transaction Value, equating to 10.7millionperemployee[73].−AsofDecember31,2024,thecompanyhad144full−timeemployees,focusingontalentacquisition,retention,andemployeeengagement[91].−Thecompanyhasimplementedahybridworkschedule,allowingemployeestoworkintheofficetwodaysperweekandremotelyonotherdays,alongwithbenefitstoeaseremoteworkstress[100].−Thecompanyhasacommitmenttodiversity,equity,andinclusion,focusingoncreatingsustainableprogramsandopportunitiesforlastingchange[97].−Thecompanyoffersacharitablegivingprogram,matchingemployeecontributionstoqualifiedorganizationsupto10.7 million per employee[73]. - As of December 31, 2024, the company had 144 full-time employees, focusing on talent acquisition, retention, and employee engagement[91]. - The company has implemented a hybrid work schedule, allowing employees to work in the office two days per week and remotely on other days, along with benefits to ease remote work stress[100]. - The company has a commitment to diversity, equity, and inclusion, focusing on creating sustainable programs and opportunities for lasting change[97]. - The company offers a charitable giving program, matching employee contributions to qualified organizations up to 2,500 per team member per calendar year[98]. Financial Management and Compliance - The company has maintained a capital-efficient business model with minimal capital expenditures of 0.3millionin2024and0.3 million in 2024 and 0.1 million in 2023[33]. - The company has been audited by PricewaterhouseCoopers LLP since 2017, ensuring compliance and reliability in financial reporting[420]. - The company is subject to various laws and regulations, including the California Consumer Privacy Act (CCPA) and the EU's General Data Protection Regulation (GDPR), which may require modifications to data processing practices[87]. - The company is currently evaluating the impact of new accounting standards, including ASU No. 2024-03, which will require disaggregated disclosure of expenses starting after December 15, 2026[510]. - The Company is in compliance with all financial covenants under its credit facilities, but future compliance will depend on various market and business conditions[504]. Risks and Liabilities - The company reported that customer concentrations included 2 customers exceeding 10% of total revenue, with an aggregate value of 358million,representing41358 million, representing 41% of total revenue for 2024[401]. - The company has a supplier concentration with 1 supplier exceeding 10% of total purchases, valued at 75 million, which is 11% of total purchases for 2024[401]. - The company experienced a 1.7millionimpactoninterestexpensefortheyearendedDecember31,2024,duetoahypothetical1.01.7 million impact on interest expense for the year ended December 31, 2024, due to a hypothetical 1.0% increase or decrease in interest rates associated with the 2021 Credit Facilities[398]. - The FTC has indicated potential legal action against the Company, which could result in monetary relief and civil penalties that exceed the Company's existing liquidity[505]. Intangible Assets and Goodwill - As of December 31, 2024, the net carrying amount of intangible assets was 19,985,000, down from 26,015,000in2023,reflectingadecreaseofapproximately23.526,015,000 in 2023, reflecting a decrease of approximately 23.5%[516]. - The goodwill balance remained unchanged at 47,739,000 for both December 31, 2024, and December 31, 2023, indicating stability in this asset category[517]. - The company reported no accumulated impairment of goodwill as of December 31, 2024[516]. - The total gross amount of intangible assets as of December 31, 2024, was 53,087,000,comparedto53,087,000, compared to 52,687,000 in 2023, showing a slight increase of approximately 0.76%[516]. - The company made no additions to goodwill and intangible assets during the year ended December 31, 2024[517].