MediaAlpha(US:MAX)2025-10-29 20:33Financial Performance - Revenue for Q3 2025 reached $306.5 million, a 18.3% increase from $259.1 million in Q3 2024[18] - Net income attributable to MediaAlpha, Inc. for Q3 2025 was $14.9 million, compared to $9.5 million in Q3 2024, representing a 57.5% increase[18] - The company reported a net loss of $7.2 million for the nine months ended September 30, 2025, compared to a net income of $14.8 million for the same period in 2024[18] - Net income for the three months ended September 30, 2025, was $17.6 million, up 48.4% from $11.9 million in the prior year[95] - Revenue for the nine months ended September 30, 2025, was $822,445,000, representing a 45.8% increase from $564,056,000 in 2024[140] - Total revenue for the three months ended September 30, 2025, was $306,514,000, an increase of 18.3% from $259,133,000[124] - Adjusted EBITDA for the three months ended September 30, 2025, was $29.1 million, reflecting a year-over-year increase of 10.7%[96] - Adjusted EBITDA for the nine months ended September 30, 2025, was $82.957 million, an increase of $23.527 million or 39.5% from $59.430 million in 2024[159] Assets and Liabilities - Total current assets increased to $205.7 million as of September 30, 2025, up from $189.9 million at the end of 2024, reflecting an 8.5% growth[16] - Total liabilities rose to $332.0 million as of September 30, 2025, compared to $308.7 million at the end of 2024, indicating a 7.5% increase[16] - Total stockholders' deficit increased to $65.8 million as of September 30, 2025, compared to $46.2 million at the end of 2024[16] - As of September 30, 2025, total long-term debt was $133.7 million, down from $153.6 million as of December 31, 2024[52] - Total debt as of September 30, 2025, was $155.7 million, with expected future principal payments of $2.375 million for the remaining period of 2025, $22.164 million for 2026, and $131.789 million for 2027[55] Cash Flow - The company generated $73.046 million in net cash from operating activities for the nine months ended September 30, 2025, an increase from $31.343 million in the prior year[25] - Cash and cash equivalents decreased to $38.8 million as of September 30, 2025, down from $43.3 million at the end of 2024, a decline of 10.4%[16] - Cash and cash equivalents totaled $72.3 million as of September 30, 2025, with $33.5 million designated as restricted cash[170] - Net cash provided by operating activities increased by 133.1% to $73.0 million for the nine months ended September 30, 2025, compared to $31.3 million in 2024[179] - Cash flows used in financing activities increased by 178.1% to $43.7 million for the nine months ended September 30, 2025, primarily due to share repurchases[182] Revenue Breakdown - Revenue from Property & Casualty Insurance for the three months ended September 30, 2025, was $287.8 million, up 31.4% from $219.0 million in 2024[45] - Property & Casualty insurance revenue increased to $287,838,000, up 31.4% from $219,036,000, representing 93.9% of total revenue[124] - Health insurance revenue decreased to $12,856,000, down 60.9% from $32,879,000, now accounting for 4.2% of total revenue[124] - Life insurance revenue increased to $5,568,000, up 6.5% from $5,227,000, representing 1.8% of total revenue[124] - Revenue from insurance verticals accounted for 99.9% of total revenue for the three months ended September 30, 2025, and 99.6% for the nine months ended September 30, 2025[207] Expenses - The company’s total costs and operating expenses for Q3 2025 were $286.8 million, up from $243.5 million in Q3 2024, reflecting a 17.8% increase[18] - Cost of revenue for the three months ended September 30, 2025, was $263.1 million, accounting for 85.8% of total revenue, compared to $219.9 million or 84.9% in 2024[123] - General and administrative expenses surged by 110.4% to $77,363,000, primarily due to a $39.5 million increase in legal costs[148] - Sales and marketing expenses decreased to $5,224,000, down 19.6% from $6,496,000, now 1.7% of total revenue[130] - Interest expense decreased to $2,808,000, down 21.2% from $3,562,000, now 0.9% of total revenue[136] Regulatory and Legal Matters - The Company agreed to pay $45.0 million under a Consent Order with the FTC, with an initial payment of $33.5 million made on October 21, 2025, and the remaining $11.5 million due by January 14, 2026[38] - The FTC Matter could have a material adverse effect on the company's business, with an initial settlement demand received on October 30, 2024[208] - The Company must comply with the TSR and avoid misrepresentations in lead generation and advertising activities[211] - The Consent Order requires the Company to implement processes to review advertising and marketing materials for compliance, particularly regarding under-65 health plans[211] - Legal expenses for the nine months ended September 30, 2025, totaled $42.3 million, significantly increasing from $2.2 million in 2024, primarily due to the FTC Matter[161] Shareholder Actions - The Company authorized a new Share Repurchase Program on October 28, 2025, to repurchase up to $50 million of Class A common stock[68] - A Share Repurchase Agreement was authorized to repurchase 3,234,894 shares of Class A common stock at a price of $10.17 per share, totaling $32.9 million[98] - The weighted average shares of Class A common stock outstanding increased from 54,909,772 in 2024 to 56,617,837 in 2025[123] Market and Operational Insights - The company experienced a recovery in the P&C insurance industry, with increased customer acquisition spending resuming in late 2023 and continuing into 2025[105] - During the nine months ended September 30, 2025, 15 of the top 20 largest auto insurance carriers by customer acquisition spend were on the platform, indicating strong demand partner relationships[103] - The company operates primarily in the P&C insurance, health insurance, and life insurance verticals, generating revenue through the purchase and sale of Consumer Referrals[110] - The company reported an average of 11.7 million Consumer Referrals on its platform each month during the twelve-month period ended September 30, 2025[89] - The number of Consumer Referrals purchased on the platform rose to 36.5 million and 105.5 million for the three and nine months ended September 30, 2025, respectively, up from 30.5 million and 83.3 million in 2024, representing an increase of 19.6% and 26.7%[104]