Ladies and gentlemen, thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to MediaAlpha Inc.'s second quarter 2026 earnings call. I would like to remind everyone that this call is being recorded, and that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Alex Liloia. Please go ahead. Thanks, Angela. Good afternoon. Thank you for joining us. With me, our Co-Founder and CEO, Steve Yi, and CFO, Pat Thompson. On today's call, we will make forward-looking statements relating to our business and outlook for future financial results, including our financial guidance for the third quarter of 2026. 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 these 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. 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 investor relations and investor supplement issued today, which are available on the investor relations section of our website. I will now turn this call over to Steve. Thanks, Alex. Hi, everyone. Thank you for joining us. We delivered record second quarter results as demand continued to broaden across our marketplace. Each quarter, additional P&C carriers are unlocking advertising spend, expanding their campaigns, and leaning further into our marketplace. This is no longer just a story about concentrated growth among a handful of large partners. It is a widening base of carriers that keeps ramping. Although down from peak levels, underwriting profitability in personal auto remains historically strong. This is driving carriers to compete more aggressively by lowering rates and spending more on advertising to acquire new customers. We are seeing this intensified competition show up in a meaningful way across our marketplace. When we look at the current concentration of carrier advertising spend, we believe the inevitability of further broadening becomes clear. Since 2021, over 80% of P&C ad spend growth, both in our marketplace and others, has come from just two carriers. That leaves a wide segment of the market that has yet to meaningfully scale, and we're increasingly seeing those carriers begin to close the gap. To put this in perspective, our top two carriers spent a double-digit percentage of their total ad budgets with us in 2025, compared with the rest of our top 10 carriers, which collectively spent about 3% of their total ad budgets with us. We're seeing strong evidence that a growing number of carriers are preparing to allocate a meaningfully higher share of their advertising budgets to our marketplace. For example, our third, fourth, and fifth largest carriers nearly quadrupled their spend with us in the first half of 2026 as compared to the first half of 2025. We believe we're at the beginning of what we see as a massive growth opportunity in the years ahead, driven by the industry's ongoing transition from agent-based distribution, largely supported by brand advertising, to direct-to-consumer distribution supported by highly targeted performance-based advertising. Our scale and proprietary data allow carriers making this transition to target online insurance shoppers through our open marketplace with a level of precision that allows them to compete far more effectively than would otherwise be possible. As we continue to deliver significant value to these carriers, we're becoming more deeply embedded in their customer acquisition processes, resulting in stickier, higher-value partnerships. The better the outcomes we deliver, the more budget these carriers commit to us, and the wider that pool of active demand partners becomes. While we have long believed that most of the industry will transition to direct-to-consumer distribution over time, recent advances in AI suggest that the pace of this transition is likely to accelerate in the near term. On the carrier side, AI is making direct-to-consumer acquisition increasingly attractive by allowing a greater percentage of consumers to purchase policies without interacting with a live agent, resulting in both higher conversion rates and lower acquisition costs. We believe these improved economics will make the online direct-to-consumer channel even more attractive to carriers, particularly those who have traditionally sold through agents. On the consumer side, AI-powered search has the potential to improve both the quality and quantity of online insurance shoppers by helping consumers become better informed before they begin their shopping process, which will result in higher intent consumers entering the top of the funnel. Lastly, we're leveraging predictive AI throughout our marketplace to better target consumers and improve return on ad spend for our carriers and yield for our publishers. As a two-sided marketplace, we believe these dynamics reinforce our competitive position by connecting carriers and shoppers more efficiently, accelerating the industry's shift towards direct-to-consumer distribution and expanding our long-term market opportunity. As we look ahead, we're optimistic about our near-term and long-term growth opportunities. In the near term, it's about broadening demand as additional carriers allocate a more meaningful share of their ad budgets to our open marketplace in order to stay competitive in a changing market. Over the longer term, it's about the shift from the legacy model where carriers use brand advertising to drive foot traffic to agents, to a model where carriers leverage rich data to target consumers directly with precision through measurable online advertising channels like ours. With carriers still incurring more than $2 in agent commissions for every dollar they spend on advertising, and with only 40% of that advertising dollar currently allocated to digital, we believe we have a long runway ahead of us to grow our business and deliver significant value to our shareholders. With that, I'll hand it over to Pat. Thanks, Steve. Before I begin, I wanted to highlight that we have posted an updated investor deck to our IR site with additional details on the themes Steve touched on. I'd encourage anyone who hasn't seen it to take a look. Turning to my remarks, I'll start by walking through the key drivers of our second quarter results, then cover capital allocation activity before discussing our third quarter outlook. Revenue for the quarter was $317 million, up 26% year-over-year, above the high end of our guidance range, reflecting broader carrier participation in our marketplace. Contribution was $47.2 million, up 18% year-over-year, reflecting a modest mid-quarter dip in take rates that fully recovered by quarter end. Adjusted EBITDA for the quarter was $29.3 million, just above the midpoint of our guidance range, up 19% year-over-year. Excluding Under- 65 Health, our core business performance was very strong, with revenue and adjusted EBITDA each growing over 30% year-over-year. On capital allocation, we remain committed to creating shareholder value by returning capital to shareholders. In the second quarter, we repurchased approximately 2.2 million shares for $20 million, representing an average share repurchase price of $9.22. We've repurchased $41 million of stock year to date and $88 million over the past four quarters, representing approximately 13% of our outstanding shares. We also took a meaningful step to reduce our long-term obligations under our tax receivable agreement or TRA. In June, we repurchased $69 million of our total TRA liability for $31 million, representing a 55% discount, which generated a $38 million gain that we recorded in the second quarter. We funded this transaction with a $15 million draw on the revolver and the remainder with cash on hand. We expect the transaction will generate a mid-teens unlevered IRR, making it an attractive use of capital beyond our share repurchase program. We ended the quarter with $23.7 million in cash and $30 million undrawn on the revolver. We expect to complete the vast majority of the $45 million remaining under our $100 million authorization by year-end. Looking to next year and beyond, we'll continue to evaluate share repurchases against other uses of capital to drive long-term shareholder value. Turning to guidance, for the third quarter, we expect revenue of $330 million- $355 million, up approximately 12% year-over-year at the midpoint. Contribution of $51.5 million- $54.5 million, up approximately 16% year-over-year at the midpoint. Adjusted EBITDA of $32 million-$35 million, up approximately 15% year-over-year at the midpoint, including an approximately $1 million year-over-year decline in contribution from Under- 65 Health. Excluding Under- 65 Health, we expect contribution to increase by 20% and Adjusted EBITDA to increase by 21% year-over-year at the midpoint. For Q3, we expect the health vertical to be approximately 1% of total revenue. Looking at the remainder of 2026, we continue to expect to generate $90 million-$100 million in free cash flow for the year. Overall, we remain confident in the strength of our position in the long-term opportunity ahead. With that operator, we are ready to take the first question. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening by a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from the line of Maria Ripps with Canaccord. Your line is now open. Great, good afternoon, and congrats on the strong quarter. First, you've talked about sort of broadening carrier demand across the marketplace for several quarters now. Could you maybe give us a little bit more color on where we are in that recovery today? Then for the carriers that have yet to meaningfully reengage, what do you see as the primary gating factors holding them back? Hey, Maria. Yeah, this is Steve. I'll take that question. I think really where we are in the broader auto insurance cycle is that I think we're still firmly within a very robust growth-oriented soft market cycle. First of all, I think if you look at overall industry profitability, it's well above historical norms. What that's spurring is our carriers to grow their policies in force by reducing their rates a bit to be more competitive. Then investing a lot more in advertising to really turbocharge their growth. I think that's really what's driving the broadening of the carrier demand within our marketplace. What you're seeing is this broadening happening in particular with a lot of major agent-based carriers who are at various stages of really adopting direct-to-consumer distribution. Leveraging our marketplace both to support either their robust or nascent direct-to-consumer efforts, but then also tapping into our marketplace to connect their agents with online shoppers as well. Farmers Marketplace that we're powering on behalf of Farmers is a really good example of that. What we expect to see, I think going forward, is just continued broadening of this demand. You're going to see more carriers really start to spend meaningfully within our marketplace. We're seeing new carriers really come on board and ramping their spend every quarter. We expect to continue to see this growth and this cyclical growth or cycle-driven growth really continue for the remainder of this year and I think well into 2027. In terms of the second part of your question, which went to gating factors for carriers, I think a lot of it's about capability. I think a lot of these carriers are new to direct to consumer, new to performance-based online channels, and it's really about us working with them and sort of meeting them where their capabilities are in order to bring our capabilities to the table. I think you've heard me talk a lot about our platform solutions efforts, where we're expanding our offerings and our services to these carriers beyond just being a marketplace and becoming a true customer acquisition platform partner for them. We've had meaningful success with that. A lot of the carriers that I was referring to, we do a lot more for them than just creating a hyper-efficient marketplace. We're actually helping to build technology, doing integrations with them, hosting parts of the conversion process. We expect this part of the business to meaningfully scale as we start to work with more and more carriers who, again, are at various stages of the learning curve and adoption curve for direct-to-consumer distribution, particularly within the online space. Got it. That's very helpful. Maybe if I could ask you one more. Last quarter you flagged that LLM-driven sort of insurance shopping was beginning to generate incremental referral traffic. Could you maybe help us frame how the channel has evolved since then, whether it's beginning to move the needle for you and, I guess, how sort of conversion characteristics compare to your more established acquisition channels? Sure. What I can share with you is what we're hearing from partners. Again, we rely on primarily third-party publishers to acquire traffic into the marketplace, and that's our model. What we're hearing from our partners is that it continues to organically scale as a referral source. I think I mentioned last time that we're hearing from some partners that it's a source that is starting to become volume-wise on par with something like Google Organic Search. We're hearing similar things this quarter as well. We continue to hear that it's a high-quality source, typically higher quality than Google Organic. This makes sense because of just how much more granular these searches tend to be. I think that you're starting to see Google really talk about their LLMs as being something that's really incremental to their paid search and organic search, and that these LLM-driven searches are in fact far more valuable because of the level of granularity that they offer. Just in terms of overall impact in our marketplace, I think it's still relatively small. We expect to continue to see that to grow and having the ad ecosystems really layered on top of these LLMs, like Gemini is already doing and that I think OpenAI is doing. I think we would expect a lot more partners to tap into the advertising ecosystem to generate a lot more traffic from these LLMs going forward. Got it. Thank you, Steve. Your next question comes from the line of Tommy McJoynt with KBW. Your line is now open. Hey, good evening. Thanks for taking our questions. I thought it was a pretty interesting data point that you gave around the growth in the top three to five P&C advertisers. As you continue to see this expansion of advertisers outside of the top two, can you talk about the impact of how that'll flow through, specifically on your contribution margin or your gross profit margin? Just thinking about the economics of those relationships with those carriers outside of the top two. Thanks. Yeah. Tommy, thanks for the question. This is Pat here. I would say that as you think about our business, we have, as you know, kind of two main models with which our partners transact. There's the private marketplace and the open marketplace. The private marketplace is really a product for our top publishers with the top couple of advertisers, and those tend to be advertisers that have very deep in-house capabilities for how they manage spend both with us and in our channel more broadly. The three, four, five players and then six through 10 and 11 through however many 100 we have Those folks overwhelmingly transact on the open marketplace with us. As Steve alluded to, those partners are much more likely to utilize a lot of the tools that we have to offer. You can think of managed services where we do the bidding on behalf of the advertiser, or some of the tools where we manage some of the technology flow for them. Given that the take rates we have, so the percentage of transaction value that we recognize are markedly higher in the open marketplace. One nuance that's important to note is that the revenue treatment in the open marketplace is gross. If an advertiser spends $100 with us, we recognize $100 of revenue, and we would have a contribution margin typically in the teens on that. For the private marketplace, we recognize it on a net basis. If there's $100 of spend, we would have low single-digit dollars of revenue, and that would all drop down to contribution. Got it. Thanks for that. Is that clear? Yeah. No, that's a good refresher. Great. Another question on the health segment side of the business. The decline in revenues there was a bit more than we expect and understand the Under- 65 dynamic is going on. Was there anything else sort of unusual that happened in the second quarter? Just remind me when we sort of lap the headwinds around that business. Thanks. Yeah. Tommy, we guided to it being around 1% of revenue in Q2, and it was around 1% of revenue in Q2. I would say it was basically in line with our expectations, and we've guided to that same 1% in Q3. I think with each quarter, the comp gets easier for that business. I think as we get into Q4 of this year and into Q1 of next year, the comp starts to get pretty clean for us. Got it. Thanks. Thanks, Tommy. Your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is now open. Thanks for taking the questions. You talked a fair bit about AI in your prepared remarks, and it's a little bit deeper in how you're utilizing AI in your business, both as a driver of productivity and efficiency gains in the business, and also as a potential tool to improve conversions and attract more advertisers and attract more revenue into the ecosystem, and just how you think about the priorities of investing behind those themes versus those themes building a momentum in the P&L looking out over the next 12- 24 months. Thanks so much, guys. Sure, Eric. I think primarily, I think you talked about us investing in AI. In some of the similar ways that you hear from other companies, obviously, our tech team has embraced it wholeheartedly to accelerate our product development efforts, to allow us to gain more leverage from an outstanding technology team that we have up in Bellevue, Washington. In addition to that, the second thing I'd point out is really about the predictive AI that we've been leveraging for years, and the machine learning capabilities that we have to leverage all of the data that's within our marketplace, because we have millions of insurance shoppers coming through our marketplace every month. We see all the characteristics. We know a ton of attributes about them. We see exactly what they're doing, what carriers they're going to, who they're getting a quote from, who they're binding with. What we're able to do is really with a lot of machine learning and predictive AI, just do a much, much better job of matching consumers to carriers than we've been able to before. That obviously has a profound effect on the return on ad spend that we're able to deliver for carriers and the yield that we're able to deliver for publishers. I would say that that's really a meaningful area of investment for us. Again, it's predictive AI. I have a feeling that you're asking more about sort of LLM and generative AI investments that we're making. That's really an area of investment that's been very important for us and something that's allowed us to really outpace our competition. Just in terms of our generative AI elsewhere, we're certainly leveraging that within our product suite to make a lot of the features a lot more intuitive. I think this has been really important for our newer efforts to work with agents. We've been able to scale the number of agents that we're working with geometrically while keeping that size of that team that's based in Phoenix, Arizona. It's an outstanding team. We've been able to keep the size of that team relatively lean. Again, we wouldn't have been able to do that without incorporating AI into a lot of the features that we're making available for agents. Overall, we're absolutely just fundamentally just huge believers in the power of that technology to really create a ton of internal efficiencies and product development enhancements. Now, I will point out that we've always been very, very lean by nature. I always like to point out that we were 80 people when we went public. We're still only about 160, 170 people, so we're extraordinarily lean. You're not going to see a ton of headcount savings from us announcing just because we're adopting AI. Certainly, it's allowing us to grow and leverage our outstanding team in ways that we hadn't imagined before. We continue to expect to be able to grow geometrically and exponentially with the size of the market opportunity ahead of us, with adding only meaningful or incremental additions to our headcount. We do look forward to continuing to embrace AI to be able to grow in that way. Thank you. Your next question comes from the line of Randy Binner with Texas Capital. Your line is now open. Hey there. I think this one might be for Pat, and I apologize if I missed this, the responses have been very detailed, the contribution margin was a little bit lower than modeled. You've guided that higher, I think, for third quarter. I think you mentioned a dynamic where there was a mid-quarter take rate dip and then I guess what's been a pretty fast recovery. I guess just trying to understand what was the nature of the lower take rate and just how you turned it around so quickly. Yeah, Randy. I would say in May and early June, we saw a bit of weakness on the take rate side. Really what happened there was we made a couple of kind of partner-specific investments there, and they were investments that obviously, had short-term costs for us, but we believe had meaningful long-term benefits. Kind of what we saw is by the end of Q2, take rate was right where we wanted it. Q3, it's off to a good start. The guide we have I think shows that it has recovered. As we think about that short-term investment we made in Q2, we're starting to harvest some of that goodness here in Q3. Okay. As we look forward into Q4 and beyond, we kind of like our positioning, both from a competitive standpoint and in terms of partner relationships. We feel good right now. Okay. Is the nature of that investment, is that AI related, or is it just bringing someone new on? Is it kind of in the AI funnel, or is it just a new partner? Yeah. Randy, I would say it was really with existing partners. Okay. Got you. that we have. The vast majority of our partner relationships are very long-term in nature. Okay. I would say they were some short-term investments with longstanding partners that we believe will pay long-term dividends. Okay. Understood on that. Then I had another one, if you don't mind. I think this was received. I guess I could use a little bit more explanation. I think you mentioned the customers are higher quality that are coming through the AI funnel broadly, and I guess it's not clear to me. Is that because it's just better interface and technology, or are they providing more data? What is making them higher quality? Yeah. It's because what they're doing with an LLM search is that they're just going deeper and expressing more nuances and more details around the insurance that they're looking for. So what you have is more targeted consumer. It's a consumer who didn't just search for auto insurance quote on Google. It's a consumer who has been researching auto insurance, told the LLM that they're married and they have two cars and two kids. So what you have is a far more granular search. That's really what I meant by quality, is that you actually have a consumer coming through about whom you know a lot more. Typically, you see that these consumers are higher intent because they've actually taken a few steps in the process inside an LLM that they wouldn't otherwise do through Google search. All right. Got it. That's helpful. Thank you. Again, if you would like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Mike Zaremski with BMO Capital Markets. Your line is now open. Hey, thanks. Maybe just one. On the TRA agreement, clearly a great IRR. Is there more potential for those to happen? I believe there are other counterparties other than Insignia, or was that kind of a special one-off? I don't know if there's anything you can add to that. Thanks. Mike, I'm happy to cover that. I think following the Insignia transaction, the remaining recorded liability we have is about $55 million total. The remaining holders essentially break into three categories. There are the founders, there are some early employees, and there's an external third party. I would say we would evaluate any further TRA repurchases the exact same way we evaluated the one that we completed in June with Insignia Capital Group, where we look at the expected IRR versus alternative uses of capital. I think like any transaction, there's no obligation for any holder to sell. In order to do a deal, we'll need to have the double coincidence of wants where they want to sell at a price where we're willing to buy. I think we'd be very open to it if it makes sense for shareholders. Got it. Okay. Pat, maybe lastly, clearly you all have the cash flow to continue buying back shares. We know that you plan on continuing. Is there a price sensitivity to the extent the stock did continue to move north? Would you be price sensitive or should we just earmark it the full amount? Yeah. Mike, I would say, we've kind of continued to reiterate our guidance of we expect to complete the vast majority of the outstanding buyback, which is $45 million is authorized today. I think going forward over the longer term, we evaluate share repurchases alongside other uses of capital, and we base the decisions around what we think represents the highest long-term return for our shareholders. I think, having said that, at the end of the quarter, we had $24 million of cash, $30 million undrawn on the revolver, and we think we're going to generate $90 million-$100 million of free cash flow this year. We feel good about our ability to fulfill the commitment that we've made, and I think we have been believers in the stock, and I think we continue to feel like the stock is an attractive opportunity for us. Thank you. Thanks, Mike. Ladies and gentlemen, that concludes the question and answer session, and that also concludes today's call. Thank you all for joining. You may now disconnect.