Thank you for standing by. My name is Karen, and I will be your conference operator today. At this time, I would like to welcome everyone to the MediaAlpha Inc Second Quarter 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star followed by the number one on your telephone keypad. To withdraw your question, you may press star followed by the number one again. I will now turn the call over to Alex Liloia. Please go ahead. Thanks, Karen. Good afternoon, and thank you for joining us. With me are Co-Founder and CEO, Steve Yi, and CFO, Pat Thompson. On today's call, we'll make forward-looking statements relating to our business and outlook for future financial results, including our financial guidance for the third quarter of 2025. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q, for a fuller explanation of those risks and uncertainties and the limits applicable to forward-looking statements. All the forward-looking statements we make on this call reflect our assumptions and beliefs as of today, and we disclaim any obligation to update such statements except as required by law. Today's discussion will include non-GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of these non-GAAP financial measures to the corresponding GAAP measures can be found in our press release and shareholder letter issued today, which are available on the Investor Relations section of our website. I'll now turn the call over to Steve. Thanks, Alex. Hi, everyone. Thank you for joining us. Let me start with the FTC resolution we announced this afternoon. As we shared in our press release and Form 8-K filing, we've reached a settlement with the FTC that fully resolves its investigation into our under-65 health insurance business. The key terms include $45 million of payments, which we will fund from cash on hand, as well as additional compliance measures to further strengthen our safeguards within our under-65 marketplace. While we strongly disagree with the FTC's allegations, we believe resolving this matter now is in the best interests of MediaAlpha and our shareholders. We view this as a positive step forward and are pleased to have this matter behind us. Now, turning to the second quarter, we delivered solid results driven by ongoing momentum in our P&C insurance vertical. Growth was again fueled by increased marketing investments from leading auto insurance carriers. With underwriting margins at robust levels, the impact of automotive tariffs is looking increasingly manageable, and with slowing rate increases providing less of a tailwind for premium growth, gaining market share by acquiring new customers has become even more strategically important for most carriers. We expect these favorable industry dynamics to sustain healthy levels of auto insurance advertising spend in the second half of this year and beyond. New supply partner wins also contribute to our strong second quarter results, underscoring the growing competitive advantage of our marketplace technology, operating efficiency, and industry-leading scale. In our health insurance vertical, we believe the most significant dollar decreases in under-65 transaction value are behind us. While we continue to expect year-over-year declines in the near term, our health business remains solidly profitable, and our relationships with leading Medicare Advantage carriers are as strong as ever. Over time, we're confident that health insurance carriers will allocate more marketing dollars to direct-to-consumer digital channels, which we continue to see as a meaningful long-term growth opportunity for MediaAlpha. With P&C firing on all cylinders and the FTC matter resolved, we're confident in our trajectory for the rest of the year and beyond. We remain intently focused on capturing the significant multi-year growth opportunities ahead, creating value for our partners, and delivering strong long-term returns for our shareholders. With that, I'll hand it over to Pat. Great. Thanks, Steve. I'll start by walking through the key drivers of our Q2 results. Transaction value was $481 million, up 49% year-over-year, driven by 71% year-over-year growth in our P&C vertical. In our health vertical, transaction value declined 32% year-over-year, coming in slightly below our expectations. Adjusted EBITDA for the quarter was $24.5 million, increasing 31% year-over-year. This slightly lagged our expectations due to a modestly lower take rate in the quarter, driven by our decision to accelerate our strategy to scale back parts of our higher margin under-65 business, along with some nice incremental partner wins in P&C that are at lower than average take rates. For the quarter, adjusted EBITDA represented 62% of contribution, up from 56% in the prior year. Adjusted EBITDA included $35.3 million of add-backs related to the FTC matter, consisting of $2.3 million of legal expenses and an additional $33 million reserve recorded to reflect a total of $45 million settlement payable. Looking ahead, we expect record third-quarter transaction value as we benefit from continued strong demand from the largest carriers in our marketplace. Accordingly, we expect P&C transaction value to grow approximately 35% year-over-year. In our health vertical, we expect transaction value to decline approximately 40%- 45% year-over-year, reflecting a decrease in our under-65 business from Q2 levels, as well as continued challenging conditions in Medicare Advantage. For under-65 specifically, we expect Q3 transaction value of approximately $18 million, reflecting a 54% year-over-year decline, and contribution of about $1 million, a roughly 80% decline year-over-year. To provide greater transparency into the new baselines for our health vertical, this quarter's earnings materials include transaction value and contribution for our under-65 business over the past six quarters. We expect 2025 under-65 transaction value of $95 million- $100 million and contribution of about $10 million, resulting in a take rate of about 10% at the midpoint. By comparison, 2024 transaction value, contribution, and take rate were $179 million, $29 million, and 16% respectively. Looking ahead, we expect that under-65 will generate annual contribution in the single-digit millions, reflecting the reset in both scale and profitability for this sub-vertical. Moving to our consolidated financial guidance, we expect Q3 transaction value to be between $545 million and $570 million, representing a year-over-year increase of 23% at the midpoint. We expect revenue to be between $270 million and $290 million, representing a year-over-year increase of 8% at the midpoint. Adjusted EBITDA is expected to be between $25.5 million and $27.5 million, representing a year-over-year increase of 1% at the midpoint, including a $4 million impact from an expected year-over-year decline in under-65 contribution. We expect overhead to increase sequentially by approximately $1 million as we continue to selectively invest in headcount to support and drive growth. We generated significant cash flow and made solid progress in deleveraging our balance sheet during the quarter. In Q2, we generated $22 million of cash and ended the quarter with $85 million of cash and a net debt-to-adjusted EBITDA ratio of 0.6x. Excluding non-recurring payments related to the Federal Trade Commission matter, with $33.5 million expected to be paid in Q3 and the remaining $11.5 million in Q4, we expect to convert a significant portion of adjusted EBITDA into unleveraged free cash flow, providing us with substantial financial flexibility going forward. Finally, I'm pleased to announce that on August 4th, we extended the maturity of $142.6 million of the $156.3 million of indebtedness outstanding under our credit facilities by one year through July of 2027. The remaining $14 million will mature in July of 2026. With that, operator, we are ready to take the first question. At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. The first question comes from Maria Ripps from Canaccord Genuity. Your line is open. Great. Good afternoon, and thanks for taking my questions and congrats on the settlement. Now with the FTC matter sort of resolved and with you committing to the stronger compliance framework, how do you see sort of this enhancing your competitive positioning in the under-65 vertical? Maybe talk about how this new sort of content review and partner screening processes might impact sort of user experience and conversion quality. Hey, Maria. Thanks for that question. In terms of the measures that we've taken prior to this settlement, as well as the terms of the settlement that we will implement in the upcoming weeks, I think what that's going to do is set a new baseline for our under-65 health insurance business. Let me just remind everyone that the terms of the settlement really focus just on the under-65 side, so it'll have no material impact on the Medicare side of our business or the P&C side of our business. I think what that's going to do is really set a new baseline for us to start to build from. The reason that we continue to stay in the under-65 business is because we still think that there is an opportunity for us to work with consumers and help them navigate through the myriad of choices that they have if they don't qualify for Medicare and if they don't have an employer-sponsored plan. I think with the recent changes from the Trump administration, disenrolling millions of people from Medicare, as well as tightening eligibility requirements for ACA subsidies, I think what that's going to do is increase the number of consumers who need to be matched with carriers and brokers who can offer them the right set of plans depending on their life situation and their financial situation. We still see an opportunity there and believe that we can operate in this space with the constraints that we have under the terms of the settlement agreement. We look forward to really building on this with the great team that we have in that space and seeing what we can do to really serve consumers and advertisers in a better way than we did before. Got it. That's very helpful. Appreciate all the call. Just on P&C, I think you called out sort of continued strength in carrier spend in the second half. Given sort of the uncertainty around tariffs and inflation, could you maybe give us a little bit more call on sort of key variables around carrier budgets in the back half of the year and maybe into next year? Yeah. I mean, I think for that time period that you're talking about, the back half of this year and the early part of this year, we're very optimistic about carrier budgets. I think overall, let me just start with where the industry is, and the industry, the underlying dynamics of the industry are still outstanding. The underlying profitability is strong in the personal auto space, meaning combined ratios for a lot of the carriers, particularly the leading carriers, are actually lower than or better than long-term targets. That's led to strong advertising investments in Q2, as you saw from our results. As you see from our guidance for Q3, we expect very strong budgets to continue into the next quarter. We certainly expect this trend to continue for the remainder of the year and beyond. In terms of automotive tariffs, I don't want to dismiss those out of hand. I think a lot of carriers are still taking a bit of a wait-and-see approach. As that second quarter progressed, what we saw was that profitability within the auto insurance industry held up very well. I think that's led to a lot of carriers really having the growing confidence that the inflationary impact of the automotive tariffs were looking increasingly manageable. Again, as we reminded everyone last quarter, the carriers are sort of on the heels of what was a generationally hard market. I think that they're especially attuned to inflationary pressures that could start to affect the results. Again, since our call last quarter, what we've seen is really positive in terms of the ongoing profitability of insurance carriers. I think the growing consensus is that the industry can absorb some of the single-digit inflationary impacts that we can foresee from the automotive tariffs. Got it. That's very helpful. Thanks so much. Thanks, Maria. The next question comes from Tommy McJoynt from KBW. Your line is open. Hi. It's Jing Li for Tommy. Thank you for taking my question. My first question is on the P&C side. You mentioned that the P&C transaction value grew 71% year-over-year, driven by sustained demand from leading carriers and also growing partner base. Can you provide some more color on the mix between existing carrier spend increases versus new carrier additions? Thank you. Yeah, happy to. This is Pat. Happy to answer that. I would say that, you know, on the carrier side, the vast majority of the increase in spend was from existing carriers. That's not to say we didn't have any new ones come in. It's just, you know, the typical trajectory we see with a new carrier is when they come in, they start small. The growth we saw on the carrier side in the quarter was really driven primarily by the head, you know, so the couple of biggest carriers. That's a trend we're seeing kind of continue into Q3. Moving to the other side on the supplier, the publisher side, I would say we've been gaining share pretty consistently for the last five, six quarters. That's a trend we think will continue. I would say we've been gaining share of wallet with existing shared partners, and we've been winning some exclusive partners as well. Both of those, we think, are testaments to the technology we have, the account management we have, the overall monetization capabilities of our offering. We feel very optimistic about that trend continuing in the future as well. Got it. Thank you. My second question is, I guess some of the transaction value was driven by new supply partner and then kind of offset by a modest take rate compression. I'm just wondering, what's your strategy to optimize this trade-off between buying growth and profitability as you scale? I'll take the first crack at that. I think right now we're still optimizing for market share and transaction value. What that's doing is creating a lot more transaction within our marketplace, giving us a lot more data that we can use to optimize spend on behalf of our major carrier partners. I do think that, in the upcoming quarters, as the turn from a hard market environment to a soft market environment really settles, you will see us start to optimize more for gross profit going forward. I believe that, with the data that we have and the market share that we have, we'll be able to do that better than anyone else in the industry. Got it. Thank you. That's helpful. Appreciate the color. Thanks for the questions. The next question comes from Michael Zaremski from BMO Capital Markets. Your line is open. Thank you, Nadine. This is Jack on for Mike. Just a follow-up on the margin outlook, maybe just EBITDA outlook. Is that the result of this quarter and the change going forward mostly attributable to the under-65 health insurance business being smaller? He's talked about some of the supply partner wins on the P&C insurance side too. Any additional color on the margin profile of those relative to your existing business and maybe just a way for us to think about EBITDA margins and how those might trend over time? Yeah. This is Pat here. I would say, you know, we really think about two margins when we manage our business. The first of those is take rate, which for us is contribution divided by transaction value. We've seen some compression there between Q1 and Q2. The primary driver of that compression is that under-65 health insurance is a smaller portion of the mix, and it's a lower margin business. We've given some detail in our shareholders' letter to that effect, so you can see that. Within P&C insurance, we've seen a bit of take rate compression there, and that really has been driven by two different things. One is the spend is shifting a bit private, which is more or less code for it's shifting to the very top carriers, the very top carriers there. That's one driver. The second piece, Steve touched on this some in the last question, actually, which is we've onboarded on the supply side, in particular, one nice new partner that was at lower than average take rates. Once again, it's profit dollar positive, but it was negative in terms of impact on the overall take rate. Talking about the second margin that we focus on, that is kind of how we convert contribution to EBITDA. We've seen that number trend upwards very nicely year over year for a while now. That's a trend that we feel good about. Efficiency is in our DNA. We ended the quarter with 148 employees, and we will always be laser-focused on running this business as efficiently and as intelligently as possible. Thank you. The next question comes from Ben Hendrix from RBC Capital Markets. Your line is open. Hi. This is Michael Murray for Ben. Congrats on the FTC settlement. With shares trading at depressed levels relative to your historical levels, and then also the company having pretty modest leverage levels, could you provide your thoughts on your capital structure and the potential for share repurchases? Yeah, this is Pat here. I'm happy to talk to that. I would say that we are long-term shareholders of the stock, and we're definitely focused on driving long-term returns. I would say we're in a spot where we've got $45 million of cash that are going to be going out the door in the next three to four months, depending on timing of court approvals for the FTC settlement. That'll be a big short-term use of cash. We're a business that is generating cash at a pretty good clip right now. That's a trend that we think will continue. We think we've got some nice flexibility going forward to invest in the business both organically and potentially inorganically, and also to reduce debt and/or return capital to shareholders. I would say we don't have any firm targets or commitments on that. I think the one thing I can say is that we are all about deploying capital intelligently and putting it to the best use possible to drive long-term returns. Okay. Just shifting gears, I'm curious to hear your expectations for AEP. Pairs have indicated there may be some pullback in benefits, and brokers believe this could lead to increased shopping behavior. Curious how you feel your platform's positioned if there is, in fact, increased shopping behavior. Yeah, I'll address the first part of that, and Pat can jump in as well. I mean, I think we do anticipate there'll be increased shopping behavior. I think there'll be a bit of a churn in the marketplace as a lot of the Medicare Advantage carriers actually rebalance their coverage or their portfolio mix and actually drop plans from a lot of geographies. I think that's going to lead a lot of consumers to shop around. In addition to that, I think you're going to see some repricing and the dropping of benefits or the adding of benefits, which again is going to create a bit of churn or consumer churn in the marketplace. I think that's one part of the equation that I think bodes well. On the other side of it is, I think, really the Medicare Advantage carriers, I think inherent conservatism coming into this upcoming AEP. I think what you've seen is a couple of plan years, 2024 and 2025 plan years, and they haven't done so well. Even though with Medicare Advantage, you can reprice and change your benefits on an annual basis, and our expectation is that the pricing is something right now that they feel comfortable with. I think because of the churn and some of the unexpected consumer that they may get coming into their products, as well as some uncertainty about the upcoming medical loss ratios, I think is going to lead a lot of demand in our marketplace, namely the willingness of the Medicare Advantage carriers to spend to acquire new customers, be a bit muted coming into this AEP. In summary, I think there will be a lot of consumer shopping behavior, but what we're anticipating is that the carrier budgets going into this AEP will be lighter than previous years. Yeah. I would probably add one thing to what Steve said there, which is the demand profile for us in Medicare Advantage, it's a blend of carriers and brokers. I would say the carriers definitely, you know, their belts are pretty tight right now. I think the brokers are doing maybe a bit better on average, and there may be a bit more willingness there. I think the net trend is not looking great in Medicare, but we do have demand from the broker side, which looks to be hanging in a bit better than the carriers. Okay, that's really helpful. Thank you so much. Thanks.