Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries MediaAlpha Announces First Quarter 2021 Financial Results By: MediaAlpha, Inc. via Business Wire May 13, 2021 at 16:05 PM EDT Revenue of $174 million, up 45% year over year Revenue from Property & Casualty grew 74% year over year to $126 million Transaction Value grew to a record $262.5 million, up 58% year over year MediaAlpha, Inc. (NYSE: MAX), today announced its financial results for the first quarter ended March 31, 2021. “We had a great start to 2021, with our Transaction Value growing 58% year over year to another quarterly record,” said Steve Yi, MediaAlpha Co-Founder and CEO. “Given consumers’ aggressive adoption of online shopping in the past year, and our industry-leading market share, we are very optimistic about further solidifying our position as the leading customer acquisition partner to the insurance industry this year. As a result, we are raising our guidance for Transaction Value, Contribution and Adjusted EBITDA for full year 2021.” First Quarter 2021 Financial Results Revenue of $173.6 million, an increase of 45% year over year; Transaction Value of $262.5 million, an increase of 58% year over year; Gross margin of 15.2%, compared with 15.7% in the first quarter of 2020; Contribution Margin(1) of 16.1%, compared with 16.5% in the first quarter of 2020; Net income was $0.2 million, compared with $8.8 million in the first quarter of 2020; and Adjusted EBITDA(1) was $16.3 million, compared with $12.7 million in the first quarter of 2020. (1)A reconciliation of GAAP to Non-GAAP financial measures has been provided at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Financial Outlook For the second quarter of 2021, MediaAlpha currently expects the following: Transaction Value between $255 million - $260 million, representing 47% year-over-year growth at the midpoint of the guidance range; Revenue between $156 million - $161 million, representing 28% year-over-year growth at the midpoint of the guidance range; Contribution between $25 million - $27 million, representing 28% year-over-year growth at the midpoint of the guidance range; and Adjusted EBITDA between $14.5 million - $15.5 million, representing 13% year-over-year growth at the midpoint of the guidance range. For the full year 2021, MediaAlpha currently expects the following: Transaction Value between $1,050 million - $1,100 million, representing 32% year-over-year growth at the midpoint of the guidance range; Revenue between $680 million - $710 million, representing 19% year-over-year growth at the midpoint of the guidance range; Contribution between $114 million - $118 million, representing 25% year-over-year growth at the midpoint of the guidance range; and Adjusted EBITDA between $65 million - $67 million, representing 14% year-over-year growth at the midpoint of the guidance range. The Company expects total shares outstanding at the end of the second quarter of 2021 to be 59.4 million and 64.6 million on a basic and fully diluted basis, respectively. With respect to the Company’s projections of Contribution and Adjusted EBITDA under “Financial Discussion – Q2 2021 Outlook,” MediaAlpha is not providing a reconciliation of Contribution or Adjusted EBITDA to the respective GAAP measures because the Company is unable to predict with reasonable certainty the reconciling items that may affect gross profit and net income without unreasonable effort, including equity-based compensation, transaction expenses and income tax expense. These reconciling items are uncertain, depend on various factors and could significantly impact, either individually or in the aggregate, the GAAP measures for the applicable period. For a detailed explanation of the Company’s non-GAAP measures, please refer to the appendix section of this press release. Conference Call Information MediaAlpha will host a Q&A conference call today to discuss the Company's first quarter 2021 results and its financial outlook for the second quarter and full year of 2021 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the call will be available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. To register for the webcast, click here. Participants may also dial-in, toll-free, at (833) 350-1346 or internationally at (236) 389-2445 with Conference ID 8753258. An audio replay of the conference call will be available for two weeks following the call and available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. We have also posted to our investor relations website a letter to shareholders. We have used, and intend to continue to use, our investor relations website at https://investors.mediaalpha.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the second quarter and full year 2021. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including those more fully described in MediaAlpha’s filings with the Securities and Exchange Commission (“SEC”), including the final prospectus filed with the SEC pursuant to Rule 424(b) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), on March 22, 2021 and the Annual Report on Form 10-K filed on March 15, 2021 and our Quarterly Report on Form 10-Q to be filed for the first quarter of 2021. These factors should not be construed as exhaustive. MediaAlpha disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this shareholder letter. Non-GAAP Financial Measures and Operating Metrics This press release includes Adjusted EBITDA, Contribution, and Contribution Margin, which are non-GAAP financial measures. The Company also presents Transaction Value, which is an operating metric not presented in accordance with GAAP. See the appendix for definitions of Adjusted EBITDA, Contribution, Contribution Margin and Transaction Value, as well as reconciliations to the corresponding GAAP financial metrics, as applicable. We present Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. Accordingly, the Company believes that Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management team and board of directors. Each of Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin has limitations as a financial measure and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. MediaAlpha, Inc. Condensed Consolidated Balance Sheets (In thousands) March 31, December 31, 2021 2020 Assets Current assets Cash and cash equivalents $ 12,853 $ 23,554 Accounts receivable, net of allowance for credit losses of $0.6 million and $0.4 million, respectively 80,268 96,295 Prepaid expenses and other current assets 7,251 7,950 Total current assets 100,372 127,799 Property and equipment, net 749 762 Intangible assets, net 14,805 15,551 Goodwill 18,402 18,402 Deferred tax asset 91,278 31,613 Other assets 16,085 16,210 Total assets $ 241,691 $ 210,337 Liabilities and stockholders' deficit Current liabilities Accounts payable $ 64,574 $ 98,249 Accrued expenses 5,360 9,206 Total current liabilities 69,934 107,455 Long-term debt 183,004 182,668 Liabilities under tax receivable agreement, net of current portion 75,355 22,498 Other long-term liabilities 2,823 2,834 Total liabilities 331,116 315,455 Total stockholders' (deficit) attributable to MediaAlpha, Inc. $ (30,803 ) $ (33,773 ) Non-controlling interest (58,622 ) (71,345 ) Total stockholders' (deficit) $ (89,425 ) $ (105,118 ) Total liabilities and stockholders' deficit $ 241,691 $ 210,337 MediaAlpha, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data and per share amounts) Three months ended March 31, 2021 2020 Revenue $ 173,588 $ 119,445 Cost and operating expenses Cost of revenue 147,179 100,669 Sales and marketing 5,384 3,136 Product development 3,315 1,843 General and administrative 15,746 3,247 Total cost and operating expenses 171,624 108,895 Income from operations 1,964 10,550 Other (income), net (150 ) — Interest expense 2,301 1,715 Total other expense 2,151 1,715 (Loss) income before income taxes (187 ) 8,835 Income tax (benefit) (364 ) — Net income $ 177 $ 8,835 Net income attributable to QLH prior to Reorganization Transactions — 8,835 Net (loss) attributable to non-controlling interest (117 ) — Net income attributable to MediaAlpha, Inc. $ 294 $ — Net income per share of Class A common stock -Basic $ 0.01 $ — -Diluted $ 0.00 $ — Weighted average shares of Class A common stock outstanding -Basic 33,136,632 — -Diluted 62,163,390 — MediaAlpha, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) Three months ended March 31, 2021 2020 Cash flows from operating activities Net income $ 177 $ 8,835 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash equity-based compensation expense 10,602 568 Depreciation expense on property and equipment 82 67 Amortization of intangible assets 746 804 Amortization of deferred debt issuance costs 345 113 Bad debt expense 157 107 Deferred taxes (358 ) — Tax receivable agreement liability adjustments (156 ) — Changes in operating assets and liabilities: Accounts receivable 15,870 8,012 Prepaid expenses and other current assets 690 (54 ) Other assets 125 (4,750 ) Accounts payable (33,675 ) (2,615 ) Accrued expenses (3,961 ) (3,796 ) Net cash (used in) provided by operating activities (9,356 ) 7,291 Cash flows from investing activities Purchases of property and equipment (69 ) (17 ) Net cash used in investing activities (69 ) (17 ) Cash flows from financing activities Proceeds received from: Revolving line of credit — 2,500 Payments made for: Repayments on revolving line of credit — (2,500 ) Repayments on long-term debt — (562 ) Repurchase of Class B units at QLH up to fair value — (1,254 ) Shares withheld for taxes on vesting of restricted stock units (1,276 ) — Net cash used in financing activities (1,276 ) (1,816 ) Net (decrease) increase in cash and cash equivalents (10,701 ) 5,458 Cash and cash equivalents, beginning of period 23,554 10,028 Cash and cash equivalents, end of period $ 12,853 $ 15,486 Key business and operating metrics Transaction Value We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is a direct driver of revenue, with differing revenue recognition based on the economic relationship we have with our partners. Our partners use our platform to transact via open and private platform transactions. In our open platform model, revenue recognized represents the Transaction Value and revenue share payments to our supply partners represent costs of revenue. In our private platform model, revenue recognized represents a platform fee billed to the demand partner or supply partner based on an agreed-upon percentage of the Transaction Value for the Consumer Referrals transacted, and accordingly there are no associated costs of revenue. We utilize Transaction Value to assess revenue and to assess the overall level of transaction activity through our platform. We believe it is useful to investors to assess the overall level of activity on our platform and to better understand the sources of our revenue across our different transaction models and verticals. The following table presents Transaction Value by platform model for the three months ended March 31, 2021 and 2020: Three months ended March 31, (dollars in thousands) 2021 2020 Open platform transactions $ 169,348 $ 117,022 Percentage of total Transaction Value 64.5 % 70.5 % Private platform transactions 93,114 49,026 Percentage of total Transaction Value 35.5 % 29.5 % Total Transaction Value $ 262,462 $ 166,048 The following table presents Transaction Value by vertical for the three months ended March 31, 2021 and 2020: Three months ended March 31, (dollars in thousands) 2021 2020 Property & casualty insurance $ 183,426 $ 104,860 Percentage of total Transaction Value 69.9 % 63.2 % Health insurance 50,342 33,346 Percentage of total Transaction Value 19.2 % 20.1 % Life insurance 14,442 10,316 Percentage of total Transaction Value 5.5 % 6.2 % Other(1) 14,251 17,526 Percentage of total Transaction Value 5.4 % 10.6 % Total Transaction Value $ 262,462 $ 166,048 (1) Our other verticals include Travel, Education and Consumer Finance. Contribution and Contribution Margin We define “Contribution” as revenue less revenue share payments and online advertising costs, or, as reported in our consolidated statement of operations, revenue less cost of revenue, as adjusted to exclude the following items from cost of revenue: equity-based compensation; salaries, wages, and related; internet and hosting; amortization; depreciation; other services; and merchant-related fees. “Contribution Margin” represents Contribution expressed as a percentage of revenue for the same period. We use Contribution and Contribution Margin to measure the return on our relationships with our supply partners (excluding certain fixed costs), the financial return on our online advertising, and our operating leverage. We do not use Contribution and Contribution Margin as measures of overall profitability. We present Contribution and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. The following table reconciles Contribution and Contribution Margin with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, the three months ended March 31, 2021 and 2020: Three months ended March 31, (in thousands) 2021 2020 Revenue $ 173,588 $ 119,445 Less cost of revenue (147,179 ) (100,669 ) Gross profit 26,409 18,776 Adjusted to exclude the following (as related to cost of revenue): Equity-based compensation 400 21 Salaries, wages, and related 464 356 Internet and hosting 102 123 Other expenses 105 68 Depreciation 7 5 Other services 291 219 Merchant-related fees 90 152 Contribution $ 27,868 $ 19,720 Gross margin 15.2 % 15.7 % Contribution Margin 16.1 % 16.5 % Adjusted EBITDA We define “Adjusted EBITDA” as net income excluding interest expense, income tax benefit (expense), depreciation expense on property and equipment, and amortization of intangible assets, as well as equity-based compensation expense and transaction expenses. Adjusted EBITDA is a key measure used by our management to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In addition, presenting Adjusted EBITDA provides investors with a metric to evaluate the capital efficiency of our business. The following table reconciles Adjusted EBITDA with net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended March 31, 2021 and 2020. Three months ended March 31, (in thousands) 2021 2020 Net income $ 177 $ 8,835 Equity-based compensation expense 10,602 1,266 Interest expense 2,301 1,715 Income tax (benefit) (364 ) — Depreciation expense on property and equipment 82 67 Amortization of intangible assets 746 804 Transaction expenses(1) 2,759 — Adjusted EBITDA $ 16,303 $ 12,687 (1) For the three months ended March 31, 2021, transaction expenses included $2.8 million in legal, accounting, and other consulting fees related primarily to the Secondary Offering. View source version on businesswire.com: https://www.businesswire.com/news/home/20210513005956/en/Contacts Investors Investor Relations IR@MediaAlpha.com Press SHIFT MediaAlpha@SHIFTComm.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
MediaAlpha Announces First Quarter 2021 Financial Results By: MediaAlpha, Inc. via Business Wire May 13, 2021 at 16:05 PM EDT Revenue of $174 million, up 45% year over year Revenue from Property & Casualty grew 74% year over year to $126 million Transaction Value grew to a record $262.5 million, up 58% year over year MediaAlpha, Inc. (NYSE: MAX), today announced its financial results for the first quarter ended March 31, 2021. “We had a great start to 2021, with our Transaction Value growing 58% year over year to another quarterly record,” said Steve Yi, MediaAlpha Co-Founder and CEO. “Given consumers’ aggressive adoption of online shopping in the past year, and our industry-leading market share, we are very optimistic about further solidifying our position as the leading customer acquisition partner to the insurance industry this year. As a result, we are raising our guidance for Transaction Value, Contribution and Adjusted EBITDA for full year 2021.” First Quarter 2021 Financial Results Revenue of $173.6 million, an increase of 45% year over year; Transaction Value of $262.5 million, an increase of 58% year over year; Gross margin of 15.2%, compared with 15.7% in the first quarter of 2020; Contribution Margin(1) of 16.1%, compared with 16.5% in the first quarter of 2020; Net income was $0.2 million, compared with $8.8 million in the first quarter of 2020; and Adjusted EBITDA(1) was $16.3 million, compared with $12.7 million in the first quarter of 2020. (1)A reconciliation of GAAP to Non-GAAP financial measures has been provided at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Financial Outlook For the second quarter of 2021, MediaAlpha currently expects the following: Transaction Value between $255 million - $260 million, representing 47% year-over-year growth at the midpoint of the guidance range; Revenue between $156 million - $161 million, representing 28% year-over-year growth at the midpoint of the guidance range; Contribution between $25 million - $27 million, representing 28% year-over-year growth at the midpoint of the guidance range; and Adjusted EBITDA between $14.5 million - $15.5 million, representing 13% year-over-year growth at the midpoint of the guidance range. For the full year 2021, MediaAlpha currently expects the following: Transaction Value between $1,050 million - $1,100 million, representing 32% year-over-year growth at the midpoint of the guidance range; Revenue between $680 million - $710 million, representing 19% year-over-year growth at the midpoint of the guidance range; Contribution between $114 million - $118 million, representing 25% year-over-year growth at the midpoint of the guidance range; and Adjusted EBITDA between $65 million - $67 million, representing 14% year-over-year growth at the midpoint of the guidance range. The Company expects total shares outstanding at the end of the second quarter of 2021 to be 59.4 million and 64.6 million on a basic and fully diluted basis, respectively. With respect to the Company’s projections of Contribution and Adjusted EBITDA under “Financial Discussion – Q2 2021 Outlook,” MediaAlpha is not providing a reconciliation of Contribution or Adjusted EBITDA to the respective GAAP measures because the Company is unable to predict with reasonable certainty the reconciling items that may affect gross profit and net income without unreasonable effort, including equity-based compensation, transaction expenses and income tax expense. These reconciling items are uncertain, depend on various factors and could significantly impact, either individually or in the aggregate, the GAAP measures for the applicable period. For a detailed explanation of the Company’s non-GAAP measures, please refer to the appendix section of this press release. Conference Call Information MediaAlpha will host a Q&A conference call today to discuss the Company's first quarter 2021 results and its financial outlook for the second quarter and full year of 2021 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the call will be available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. To register for the webcast, click here. Participants may also dial-in, toll-free, at (833) 350-1346 or internationally at (236) 389-2445 with Conference ID 8753258. An audio replay of the conference call will be available for two weeks following the call and available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. We have also posted to our investor relations website a letter to shareholders. We have used, and intend to continue to use, our investor relations website at https://investors.mediaalpha.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the second quarter and full year 2021. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including those more fully described in MediaAlpha’s filings with the Securities and Exchange Commission (“SEC”), including the final prospectus filed with the SEC pursuant to Rule 424(b) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), on March 22, 2021 and the Annual Report on Form 10-K filed on March 15, 2021 and our Quarterly Report on Form 10-Q to be filed for the first quarter of 2021. These factors should not be construed as exhaustive. MediaAlpha disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this shareholder letter. Non-GAAP Financial Measures and Operating Metrics This press release includes Adjusted EBITDA, Contribution, and Contribution Margin, which are non-GAAP financial measures. The Company also presents Transaction Value, which is an operating metric not presented in accordance with GAAP. See the appendix for definitions of Adjusted EBITDA, Contribution, Contribution Margin and Transaction Value, as well as reconciliations to the corresponding GAAP financial metrics, as applicable. We present Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. Accordingly, the Company believes that Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management team and board of directors. Each of Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin has limitations as a financial measure and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. MediaAlpha, Inc. Condensed Consolidated Balance Sheets (In thousands) March 31, December 31, 2021 2020 Assets Current assets Cash and cash equivalents $ 12,853 $ 23,554 Accounts receivable, net of allowance for credit losses of $0.6 million and $0.4 million, respectively 80,268 96,295 Prepaid expenses and other current assets 7,251 7,950 Total current assets 100,372 127,799 Property and equipment, net 749 762 Intangible assets, net 14,805 15,551 Goodwill 18,402 18,402 Deferred tax asset 91,278 31,613 Other assets 16,085 16,210 Total assets $ 241,691 $ 210,337 Liabilities and stockholders' deficit Current liabilities Accounts payable $ 64,574 $ 98,249 Accrued expenses 5,360 9,206 Total current liabilities 69,934 107,455 Long-term debt 183,004 182,668 Liabilities under tax receivable agreement, net of current portion 75,355 22,498 Other long-term liabilities 2,823 2,834 Total liabilities 331,116 315,455 Total stockholders' (deficit) attributable to MediaAlpha, Inc. $ (30,803 ) $ (33,773 ) Non-controlling interest (58,622 ) (71,345 ) Total stockholders' (deficit) $ (89,425 ) $ (105,118 ) Total liabilities and stockholders' deficit $ 241,691 $ 210,337 MediaAlpha, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data and per share amounts) Three months ended March 31, 2021 2020 Revenue $ 173,588 $ 119,445 Cost and operating expenses Cost of revenue 147,179 100,669 Sales and marketing 5,384 3,136 Product development 3,315 1,843 General and administrative 15,746 3,247 Total cost and operating expenses 171,624 108,895 Income from operations 1,964 10,550 Other (income), net (150 ) — Interest expense 2,301 1,715 Total other expense 2,151 1,715 (Loss) income before income taxes (187 ) 8,835 Income tax (benefit) (364 ) — Net income $ 177 $ 8,835 Net income attributable to QLH prior to Reorganization Transactions — 8,835 Net (loss) attributable to non-controlling interest (117 ) — Net income attributable to MediaAlpha, Inc. $ 294 $ — Net income per share of Class A common stock -Basic $ 0.01 $ — -Diluted $ 0.00 $ — Weighted average shares of Class A common stock outstanding -Basic 33,136,632 — -Diluted 62,163,390 — MediaAlpha, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) Three months ended March 31, 2021 2020 Cash flows from operating activities Net income $ 177 $ 8,835 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash equity-based compensation expense 10,602 568 Depreciation expense on property and equipment 82 67 Amortization of intangible assets 746 804 Amortization of deferred debt issuance costs 345 113 Bad debt expense 157 107 Deferred taxes (358 ) — Tax receivable agreement liability adjustments (156 ) — Changes in operating assets and liabilities: Accounts receivable 15,870 8,012 Prepaid expenses and other current assets 690 (54 ) Other assets 125 (4,750 ) Accounts payable (33,675 ) (2,615 ) Accrued expenses (3,961 ) (3,796 ) Net cash (used in) provided by operating activities (9,356 ) 7,291 Cash flows from investing activities Purchases of property and equipment (69 ) (17 ) Net cash used in investing activities (69 ) (17 ) Cash flows from financing activities Proceeds received from: Revolving line of credit — 2,500 Payments made for: Repayments on revolving line of credit — (2,500 ) Repayments on long-term debt — (562 ) Repurchase of Class B units at QLH up to fair value — (1,254 ) Shares withheld for taxes on vesting of restricted stock units (1,276 ) — Net cash used in financing activities (1,276 ) (1,816 ) Net (decrease) increase in cash and cash equivalents (10,701 ) 5,458 Cash and cash equivalents, beginning of period 23,554 10,028 Cash and cash equivalents, end of period $ 12,853 $ 15,486 Key business and operating metrics Transaction Value We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is a direct driver of revenue, with differing revenue recognition based on the economic relationship we have with our partners. Our partners use our platform to transact via open and private platform transactions. In our open platform model, revenue recognized represents the Transaction Value and revenue share payments to our supply partners represent costs of revenue. In our private platform model, revenue recognized represents a platform fee billed to the demand partner or supply partner based on an agreed-upon percentage of the Transaction Value for the Consumer Referrals transacted, and accordingly there are no associated costs of revenue. We utilize Transaction Value to assess revenue and to assess the overall level of transaction activity through our platform. We believe it is useful to investors to assess the overall level of activity on our platform and to better understand the sources of our revenue across our different transaction models and verticals. The following table presents Transaction Value by platform model for the three months ended March 31, 2021 and 2020: Three months ended March 31, (dollars in thousands) 2021 2020 Open platform transactions $ 169,348 $ 117,022 Percentage of total Transaction Value 64.5 % 70.5 % Private platform transactions 93,114 49,026 Percentage of total Transaction Value 35.5 % 29.5 % Total Transaction Value $ 262,462 $ 166,048 The following table presents Transaction Value by vertical for the three months ended March 31, 2021 and 2020: Three months ended March 31, (dollars in thousands) 2021 2020 Property & casualty insurance $ 183,426 $ 104,860 Percentage of total Transaction Value 69.9 % 63.2 % Health insurance 50,342 33,346 Percentage of total Transaction Value 19.2 % 20.1 % Life insurance 14,442 10,316 Percentage of total Transaction Value 5.5 % 6.2 % Other(1) 14,251 17,526 Percentage of total Transaction Value 5.4 % 10.6 % Total Transaction Value $ 262,462 $ 166,048 (1) Our other verticals include Travel, Education and Consumer Finance. Contribution and Contribution Margin We define “Contribution” as revenue less revenue share payments and online advertising costs, or, as reported in our consolidated statement of operations, revenue less cost of revenue, as adjusted to exclude the following items from cost of revenue: equity-based compensation; salaries, wages, and related; internet and hosting; amortization; depreciation; other services; and merchant-related fees. “Contribution Margin” represents Contribution expressed as a percentage of revenue for the same period. We use Contribution and Contribution Margin to measure the return on our relationships with our supply partners (excluding certain fixed costs), the financial return on our online advertising, and our operating leverage. We do not use Contribution and Contribution Margin as measures of overall profitability. We present Contribution and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. The following table reconciles Contribution and Contribution Margin with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, the three months ended March 31, 2021 and 2020: Three months ended March 31, (in thousands) 2021 2020 Revenue $ 173,588 $ 119,445 Less cost of revenue (147,179 ) (100,669 ) Gross profit 26,409 18,776 Adjusted to exclude the following (as related to cost of revenue): Equity-based compensation 400 21 Salaries, wages, and related 464 356 Internet and hosting 102 123 Other expenses 105 68 Depreciation 7 5 Other services 291 219 Merchant-related fees 90 152 Contribution $ 27,868 $ 19,720 Gross margin 15.2 % 15.7 % Contribution Margin 16.1 % 16.5 % Adjusted EBITDA We define “Adjusted EBITDA” as net income excluding interest expense, income tax benefit (expense), depreciation expense on property and equipment, and amortization of intangible assets, as well as equity-based compensation expense and transaction expenses. Adjusted EBITDA is a key measure used by our management to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In addition, presenting Adjusted EBITDA provides investors with a metric to evaluate the capital efficiency of our business. The following table reconciles Adjusted EBITDA with net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended March 31, 2021 and 2020. Three months ended March 31, (in thousands) 2021 2020 Net income $ 177 $ 8,835 Equity-based compensation expense 10,602 1,266 Interest expense 2,301 1,715 Income tax (benefit) (364 ) — Depreciation expense on property and equipment 82 67 Amortization of intangible assets 746 804 Transaction expenses(1) 2,759 — Adjusted EBITDA $ 16,303 $ 12,687 (1) For the three months ended March 31, 2021, transaction expenses included $2.8 million in legal, accounting, and other consulting fees related primarily to the Secondary Offering. View source version on businesswire.com: https://www.businesswire.com/news/home/20210513005956/en/Contacts Investors Investor Relations IR@MediaAlpha.com Press SHIFT MediaAlpha@SHIFTComm.com
Revenue of $174 million, up 45% year over year Revenue from Property & Casualty grew 74% year over year to $126 million Transaction Value grew to a record $262.5 million, up 58% year over year
MediaAlpha, Inc. (NYSE: MAX), today announced its financial results for the first quarter ended March 31, 2021. “We had a great start to 2021, with our Transaction Value growing 58% year over year to another quarterly record,” said Steve Yi, MediaAlpha Co-Founder and CEO. “Given consumers’ aggressive adoption of online shopping in the past year, and our industry-leading market share, we are very optimistic about further solidifying our position as the leading customer acquisition partner to the insurance industry this year. As a result, we are raising our guidance for Transaction Value, Contribution and Adjusted EBITDA for full year 2021.” First Quarter 2021 Financial Results Revenue of $173.6 million, an increase of 45% year over year; Transaction Value of $262.5 million, an increase of 58% year over year; Gross margin of 15.2%, compared with 15.7% in the first quarter of 2020; Contribution Margin(1) of 16.1%, compared with 16.5% in the first quarter of 2020; Net income was $0.2 million, compared with $8.8 million in the first quarter of 2020; and Adjusted EBITDA(1) was $16.3 million, compared with $12.7 million in the first quarter of 2020. (1)A reconciliation of GAAP to Non-GAAP financial measures has been provided at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” Financial Outlook For the second quarter of 2021, MediaAlpha currently expects the following: Transaction Value between $255 million - $260 million, representing 47% year-over-year growth at the midpoint of the guidance range; Revenue between $156 million - $161 million, representing 28% year-over-year growth at the midpoint of the guidance range; Contribution between $25 million - $27 million, representing 28% year-over-year growth at the midpoint of the guidance range; and Adjusted EBITDA between $14.5 million - $15.5 million, representing 13% year-over-year growth at the midpoint of the guidance range. For the full year 2021, MediaAlpha currently expects the following: Transaction Value between $1,050 million - $1,100 million, representing 32% year-over-year growth at the midpoint of the guidance range; Revenue between $680 million - $710 million, representing 19% year-over-year growth at the midpoint of the guidance range; Contribution between $114 million - $118 million, representing 25% year-over-year growth at the midpoint of the guidance range; and Adjusted EBITDA between $65 million - $67 million, representing 14% year-over-year growth at the midpoint of the guidance range. The Company expects total shares outstanding at the end of the second quarter of 2021 to be 59.4 million and 64.6 million on a basic and fully diluted basis, respectively. With respect to the Company’s projections of Contribution and Adjusted EBITDA under “Financial Discussion – Q2 2021 Outlook,” MediaAlpha is not providing a reconciliation of Contribution or Adjusted EBITDA to the respective GAAP measures because the Company is unable to predict with reasonable certainty the reconciling items that may affect gross profit and net income without unreasonable effort, including equity-based compensation, transaction expenses and income tax expense. These reconciling items are uncertain, depend on various factors and could significantly impact, either individually or in the aggregate, the GAAP measures for the applicable period. For a detailed explanation of the Company’s non-GAAP measures, please refer to the appendix section of this press release. Conference Call Information MediaAlpha will host a Q&A conference call today to discuss the Company's first quarter 2021 results and its financial outlook for the second quarter and full year of 2021 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the call will be available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. To register for the webcast, click here. Participants may also dial-in, toll-free, at (833) 350-1346 or internationally at (236) 389-2445 with Conference ID 8753258. An audio replay of the conference call will be available for two weeks following the call and available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. We have also posted to our investor relations website a letter to shareholders. We have used, and intend to continue to use, our investor relations website at https://investors.mediaalpha.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the second quarter and full year 2021. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including those more fully described in MediaAlpha’s filings with the Securities and Exchange Commission (“SEC”), including the final prospectus filed with the SEC pursuant to Rule 424(b) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), on March 22, 2021 and the Annual Report on Form 10-K filed on March 15, 2021 and our Quarterly Report on Form 10-Q to be filed for the first quarter of 2021. These factors should not be construed as exhaustive. MediaAlpha disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this shareholder letter. Non-GAAP Financial Measures and Operating Metrics This press release includes Adjusted EBITDA, Contribution, and Contribution Margin, which are non-GAAP financial measures. The Company also presents Transaction Value, which is an operating metric not presented in accordance with GAAP. See the appendix for definitions of Adjusted EBITDA, Contribution, Contribution Margin and Transaction Value, as well as reconciliations to the corresponding GAAP financial metrics, as applicable. We present Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. Accordingly, the Company believes that Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management team and board of directors. Each of Transaction Value, Adjusted EBITDA, Contribution, and Contribution Margin has limitations as a financial measure and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. MediaAlpha, Inc. Condensed Consolidated Balance Sheets (In thousands) March 31, December 31, 2021 2020 Assets Current assets Cash and cash equivalents $ 12,853 $ 23,554 Accounts receivable, net of allowance for credit losses of $0.6 million and $0.4 million, respectively 80,268 96,295 Prepaid expenses and other current assets 7,251 7,950 Total current assets 100,372 127,799 Property and equipment, net 749 762 Intangible assets, net 14,805 15,551 Goodwill 18,402 18,402 Deferred tax asset 91,278 31,613 Other assets 16,085 16,210 Total assets $ 241,691 $ 210,337 Liabilities and stockholders' deficit Current liabilities Accounts payable $ 64,574 $ 98,249 Accrued expenses 5,360 9,206 Total current liabilities 69,934 107,455 Long-term debt 183,004 182,668 Liabilities under tax receivable agreement, net of current portion 75,355 22,498 Other long-term liabilities 2,823 2,834 Total liabilities 331,116 315,455 Total stockholders' (deficit) attributable to MediaAlpha, Inc. $ (30,803 ) $ (33,773 ) Non-controlling interest (58,622 ) (71,345 ) Total stockholders' (deficit) $ (89,425 ) $ (105,118 ) Total liabilities and stockholders' deficit $ 241,691 $ 210,337 MediaAlpha, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data and per share amounts) Three months ended March 31, 2021 2020 Revenue $ 173,588 $ 119,445 Cost and operating expenses Cost of revenue 147,179 100,669 Sales and marketing 5,384 3,136 Product development 3,315 1,843 General and administrative 15,746 3,247 Total cost and operating expenses 171,624 108,895 Income from operations 1,964 10,550 Other (income), net (150 ) — Interest expense 2,301 1,715 Total other expense 2,151 1,715 (Loss) income before income taxes (187 ) 8,835 Income tax (benefit) (364 ) — Net income $ 177 $ 8,835 Net income attributable to QLH prior to Reorganization Transactions — 8,835 Net (loss) attributable to non-controlling interest (117 ) — Net income attributable to MediaAlpha, Inc. $ 294 $ — Net income per share of Class A common stock -Basic $ 0.01 $ — -Diluted $ 0.00 $ — Weighted average shares of Class A common stock outstanding -Basic 33,136,632 — -Diluted 62,163,390 — MediaAlpha, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) Three months ended March 31, 2021 2020 Cash flows from operating activities Net income $ 177 $ 8,835 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash equity-based compensation expense 10,602 568 Depreciation expense on property and equipment 82 67 Amortization of intangible assets 746 804 Amortization of deferred debt issuance costs 345 113 Bad debt expense 157 107 Deferred taxes (358 ) — Tax receivable agreement liability adjustments (156 ) — Changes in operating assets and liabilities: Accounts receivable 15,870 8,012 Prepaid expenses and other current assets 690 (54 ) Other assets 125 (4,750 ) Accounts payable (33,675 ) (2,615 ) Accrued expenses (3,961 ) (3,796 ) Net cash (used in) provided by operating activities (9,356 ) 7,291 Cash flows from investing activities Purchases of property and equipment (69 ) (17 ) Net cash used in investing activities (69 ) (17 ) Cash flows from financing activities Proceeds received from: Revolving line of credit — 2,500 Payments made for: Repayments on revolving line of credit — (2,500 ) Repayments on long-term debt — (562 ) Repurchase of Class B units at QLH up to fair value — (1,254 ) Shares withheld for taxes on vesting of restricted stock units (1,276 ) — Net cash used in financing activities (1,276 ) (1,816 ) Net (decrease) increase in cash and cash equivalents (10,701 ) 5,458 Cash and cash equivalents, beginning of period 23,554 10,028 Cash and cash equivalents, end of period $ 12,853 $ 15,486 Key business and operating metrics Transaction Value We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is a direct driver of revenue, with differing revenue recognition based on the economic relationship we have with our partners. Our partners use our platform to transact via open and private platform transactions. In our open platform model, revenue recognized represents the Transaction Value and revenue share payments to our supply partners represent costs of revenue. In our private platform model, revenue recognized represents a platform fee billed to the demand partner or supply partner based on an agreed-upon percentage of the Transaction Value for the Consumer Referrals transacted, and accordingly there are no associated costs of revenue. We utilize Transaction Value to assess revenue and to assess the overall level of transaction activity through our platform. We believe it is useful to investors to assess the overall level of activity on our platform and to better understand the sources of our revenue across our different transaction models and verticals. The following table presents Transaction Value by platform model for the three months ended March 31, 2021 and 2020: Three months ended March 31, (dollars in thousands) 2021 2020 Open platform transactions $ 169,348 $ 117,022 Percentage of total Transaction Value 64.5 % 70.5 % Private platform transactions 93,114 49,026 Percentage of total Transaction Value 35.5 % 29.5 % Total Transaction Value $ 262,462 $ 166,048 The following table presents Transaction Value by vertical for the three months ended March 31, 2021 and 2020: Three months ended March 31, (dollars in thousands) 2021 2020 Property & casualty insurance $ 183,426 $ 104,860 Percentage of total Transaction Value 69.9 % 63.2 % Health insurance 50,342 33,346 Percentage of total Transaction Value 19.2 % 20.1 % Life insurance 14,442 10,316 Percentage of total Transaction Value 5.5 % 6.2 % Other(1) 14,251 17,526 Percentage of total Transaction Value 5.4 % 10.6 % Total Transaction Value $ 262,462 $ 166,048 (1) Our other verticals include Travel, Education and Consumer Finance. Contribution and Contribution Margin We define “Contribution” as revenue less revenue share payments and online advertising costs, or, as reported in our consolidated statement of operations, revenue less cost of revenue, as adjusted to exclude the following items from cost of revenue: equity-based compensation; salaries, wages, and related; internet and hosting; amortization; depreciation; other services; and merchant-related fees. “Contribution Margin” represents Contribution expressed as a percentage of revenue for the same period. We use Contribution and Contribution Margin to measure the return on our relationships with our supply partners (excluding certain fixed costs), the financial return on our online advertising, and our operating leverage. We do not use Contribution and Contribution Margin as measures of overall profitability. We present Contribution and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. The following table reconciles Contribution and Contribution Margin with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, the three months ended March 31, 2021 and 2020: Three months ended March 31, (in thousands) 2021 2020 Revenue $ 173,588 $ 119,445 Less cost of revenue (147,179 ) (100,669 ) Gross profit 26,409 18,776 Adjusted to exclude the following (as related to cost of revenue): Equity-based compensation 400 21 Salaries, wages, and related 464 356 Internet and hosting 102 123 Other expenses 105 68 Depreciation 7 5 Other services 291 219 Merchant-related fees 90 152 Contribution $ 27,868 $ 19,720 Gross margin 15.2 % 15.7 % Contribution Margin 16.1 % 16.5 % Adjusted EBITDA We define “Adjusted EBITDA” as net income excluding interest expense, income tax benefit (expense), depreciation expense on property and equipment, and amortization of intangible assets, as well as equity-based compensation expense and transaction expenses. Adjusted EBITDA is a key measure used by our management to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In addition, presenting Adjusted EBITDA provides investors with a metric to evaluate the capital efficiency of our business. The following table reconciles Adjusted EBITDA with net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended March 31, 2021 and 2020. Three months ended March 31, (in thousands) 2021 2020 Net income $ 177 $ 8,835 Equity-based compensation expense 10,602 1,266 Interest expense 2,301 1,715 Income tax (benefit) (364 ) — Depreciation expense on property and equipment 82 67 Amortization of intangible assets 746 804 Transaction expenses(1) 2,759 — Adjusted EBITDA $ 16,303 $ 12,687 (1) For the three months ended March 31, 2021, transaction expenses included $2.8 million in legal, accounting, and other consulting fees related primarily to the Secondary Offering. View source version on businesswire.com: https://www.businesswire.com/news/home/20210513005956/en/
