MediaAlpha, Inc.

What they do

MediaAlpha operates a real-time, programmatic marketplace where Demand Partners (insurance carriers and distributors) buy Consumer Referrals generated by Supply Partners (other carriers, insurance-focused research sites and financial websites) and the company's proprietary websites. Revenue is earned as a fee for each Consumer Referral sold, payable on a qualifying action such as a click, call or lead, and generally not contingent on a policy sale. The platform serves the property & casualty (P&C), health and life insurance verticals, with P&C carrier partners able to target and price across over 35 consumer attributes.

Revenue drivers

• Property & Casualty (P&C) insurance vertical — The primary growth engine, driven by increased customer acquisition spending from carriers amid strong underwriting profitability; P&C Demand Partner spending drove the 28.8% revenue growth in 2025 and the 25.9% growth in Q2 2026.
• Health insurance vertical — Includes under-65 health and Medicare; the company is scaling back the under-65 health sub-vertical due to industry-wide Medicare headwinds from high carrier loss ratios, and management expects Health to be approximately 1% of revenue in Q3 2026.
• Life insurance vertical — A core vertical alongside P&C and health, though specific revenue contribution is not separately disclosed in the excerpts.
• Marketplace mix (Open vs. Private) — Revenue is generated through Open Marketplace and Private Marketplace transactions; a higher mix of Private Marketplace in P&C contributed to lower Contribution Margin in 2025, while a higher mix of Open Marketplace helped drive Q2 2026 Contribution growth.

Recent performance

For Q2 2026, revenue was a record $316.9 million, up 25.9% year over year, driven by significant increases in P&C Demand Partner spending. Net income was $41.8 million, compared with a net loss of $22.5 million in Q2 2025, due primarily to a $37.7 million gain on extinguishment of a portion of the tax receivables agreement liability from repurchasing Insignia's interest, plus higher gross profit. Contribution was $47.2 million, up 18.4%, with Contribution Margin of 14.9% versus 15.8% a year earlier. Adjusted EBITDA was $29.3 million, up 19.5% year over year.

Strategy

MediaAlpha is focused on deepening its P&C marketplace, where more carrier partners are unlocking advertising spend and leaning into the platform on the strength of carrier underwriting profitability. The company is scaling back its under-65 health sub-vertical in response to industry Medicare headwinds. It is returning capital through share repurchases and reducing its tax receivables agreement liability; in June 2026 it repurchased a portion of the TRA liability with a book value of $69 million for $31 million. Management cites the continued shift to digital advertising and migration of commission dollars to advertising spend as long-term tailwinds positioning it to gain share.

Risks

• Partner concentration and cancellability — A substantial majority of revenue comes from Demand Partners, and many partner agreements have no fixed term and can be cancelled on 30 or 60 days' notice with no minimum transaction volume.
• Two-sided marketplace dependence — The business depends on simultaneously maintaining both Demand Partners willing to buy referrals and Supply Partners willing to make referrals available at attractive volumes and prices.
• Health vertical contraction — Ongoing Medicare industry headwinds from high carrier loss ratios and the company's decision to scale back under-65 health have reduced revenue from the Health vertical.
• Margin mix pressure — Contribution Margin declined to 15.8% in 2025 from 17.9% in 2024 and to 14.9% in Q2 2026 from 15.8% a year earlier, driven by vertical and marketplace mix shifts.

Outlook

For Q3 2026, management guides revenue of $330 million to $355 million, Contribution of $51.5 million to $54.5 million, and Adjusted EBITDA of $32.0 million to $35.0 million, with Health expected to be approximately 1% of revenue. Excluding under-65 Health, the company expects Contribution to increase 20% and Adjusted EBITDA 21% year over year at the guidance midpoints. For the full year, it continues to expect $90 million to $100 million in free cash flow and to complete the vast majority of the $45 million remaining under its share repurchase program by the end of 2026. Management does not provide reconciliations of Adjusted EBITDA to net income or Contribution to gross profit due to uncertainty in reconciling items.