Media Alpha at Canaccord Conference: Navigating Growth and Challenges

On Tuesday, 12 August 2025, Media Alpha (NYSE:MAX) participated in Canaccord Genuity’s 45th Annual Growth Conference. The company outlined a balanced strategic overview, highlighting both growth potential and challenges. The discussion led by CFO Pat Thompson, focused on industry transformations, the impact of regulatory settlements, and future growth drivers.

Key Takeaways

• Media Alpha is adapting to industry changes, emphasizing transparency and monetization in its marketplace model.
• The company is addressing challenges in its under-65 health vertical due to an FTC settlement.
• Growth is expected in the P&C sector, with AI playing a significant role in future operations.
• Media Alpha is enhancing relationships with top carriers to expand demand.
• The CFO expressed confidence in the company’s strategic direction and financial outlook.

Financial Results

• FTC Settlement Impact: The settlement affects the under-65 health insurance business, reducing its contribution from $29 million last year to an expected $8-10 million this year.
• Cash Flow: The business operates with minimal net working capital and low CapEx, translating adjusted EBITDA into unlevered free cash flow.
• Q3 Growth: The company projects low to mid 20s growth in transaction value for the third quarter.
• Momentum in P&C: Optimism remains high for a strong year in the property and casualty sector.

Operational Updates

• Compliance Actions: Adjustments have been made in the under-65 business to comply with FTC requirements.
• Publisher Model: Designed to adapt to changes in the search landscape, the model supports large publishers and advertisers.
• Private Marketplace: This product caters to large publishers, enhancing monetization opportunities.

Future Outlook

• Key Growth Drivers: Focus on the P&C business, leveraging data analytics, and AI integration.
• Medicare Advantage: Long-term potential exists despite current profitability concerns among carriers.
• AI Integration: Media Alpha is poised to capitalize on AI advancements, leveraging extensive data resources.
• Demand Expansion: Strengthening relationships with top carriers to broaden demand.

Q&A Highlights

• Share Sales: The CFO addressed investor concerns, attributing share sales by the Chief Revenue Officer to tax obligations.
• Growth Strategies: Emphasis on gaining market share through a data-rich, lower-funnel approach.
• Competitive Edge: The two-sided online B2B marketplace model, focusing on transparency and advertiser relationships, remains a key differentiator.

Readers are encouraged to refer to the full transcript for a detailed understanding of Media Alpha’s strategic insights and financial outlook.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Maria Ripps, Internet Analyst, Canaccord Genuity: You all for joining us today. I’m Maria Ripps, Internet analyst here at Canaccord Genuity. And it’s my pleasure to introduce Pat Thompson, CFO of Media Alpha. And thank you so much for joining us today.

Pat Thompson, CFO, Media Alpha: It’s great to be here. Thanks, Maria.

Maria Ripps, Internet Analyst, Canaccord Genuity: Perfect. So let’s start with a question about sort of the broader trends across the industry. Insurance carriers and the sector have generally been slower to adapt sort of digital transition to digital. Where are we in that process?

Pat Thompson, CFO, Media Alpha: Yeah, and it’s an interesting question and one I wish I had an easy answer to say like, we’re in the x inning. And unfortunately, it doesn’t quite work that way because every carrier is different. And I would say there are a couple of carriers that really, they are performance marketers in terms of how they think of the world. And like I spent eleven years at Expedia before coming to Media Alpha. And these carriers, their level of kind of sophistication with which they look at performance marketing is pretty similar to an Expedia.

Like it is core to their marketing DNA. There are a number of other carriers that are just kind of waking up to the fact that the internet is a thing on the other side of the spectrum. And there are folks at different spots on that journey. And the folks that really have embraced performance marketing are the folks that have been kind of the anchor tenants for us over time. And I think the opportunity for us in the years to come is having other folks that are top five, top 10 carriers really start to embrace the online channels generally, and our channel in particular as being some of the biggest and probably some of the most exciting things that we’ve got in front of us as

Maria Ripps, Internet Analyst, Canaccord Genuity: a That’s a great overview. So last week you reported pretty strong results, constructive results, and you also announced settlement with the FTC. Maybe talk about the settlement. Maybe I feel like investors want to make sure that sort of that settlement impacts only your 65 business. Maybe talk about that a little bit.

And just overall, what does that mean for that part of your business?

Pat Thompson, CFO, Media Alpha: Yeah, so the FTC’s investigation and subsequent settlement were focused on under 65. Like there is no, essentially zero meaningful impact on that business outside of 65. Our P and C business, Medicare, life insurance, that is not going to be affected by that at all. The under-sixty five business, we started earlier this year implementing a number of different compliance actions on that business. Those actions are continuing, and they’ve had a pretty significant impact on the 65 component of our health vertical.

So that 65 last year generated $29,000,000 in contribution. That maps pretty cleanly to EBITDA for us. And we guided to that being 8,000,000 to $10,000,000 this year and single digits for the next twelve months. So you can we provided some transaction value numbers as well in our recent earnings materials, but that hopefully provides context for what we think the new baseline for that business is on a go forward basis.

Maria Ripps, Internet Analyst, Canaccord Genuity: And so cash flow was fairly strong in the quarter and you mentioned in your shareholder letter that you expect to convert a high percent of your adjusted EBITDA to free cash flow moving forward. Can you maybe talk about some of the cash flow characteristics of the business?

Pat Thompson, CFO, Media Alpha: Yes, for sure. I have a pretty simplistic view of cash flow and it’s taking EBITDA less changes in working capital. We are a minimal net working capital business. It is just not a big use of cash for us. We’re a business with essentially zero CapEx.

It’s in the hundreds of thousands of dollars per year. We don’t capitalize software development expense. And so CapEx is almost by definition very low for us. And really, biggest use of cash for us has been on the financing side. So it’s interest on our debt and mandatory amortization on the debt.

But from an unlevered free cash flow standpoint, adjusted EBITDA over time maps relatively cleanly to unlevered free cash flow.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. And I want to ask you another sort of short term question here. We noticed that you filed a form 144 on Friday related to share sales by chief revenue officer. Some investors are asking about this. Can you maybe just address that for the audience?

Pat Thompson, CFO, Media Alpha: Yeah, we have an interesting structure called an Up C structure which is, I won’t say common, but it is present with a number of public companies. And as a, kind of the way, one of the features of that corporate structure is that a number of our early employees are in fact not technically employees. They are K1 partners of one of our entities. And the way that works for them is they are not salaried. They receive guaranteed payments in lieu of salary.

And in their restricted stock grants, because they are not employees, we are not able to do the traditional withhold and sell to cover for their tax liabilities. And so these employees, literally as they’re writing their quarterly estimated payments, they’ve got to come out of pocket for that. And so Keith is a very early employee of the firm. And Steve and Eugene, who are our co founders, are also in the same boat, where in order if they want to effectively sell to withhold on it, they need to have a effectively disclose that. So it’s a little bit different from how typical companies work, but it is very much a kind of income tax covering type of sale.

Maria Ripps, Internet Analyst, Canaccord Genuity: No, yeah, that makes sense and I appreciate you addressing it. So some of the investors sort of highlighted that with So as you noted last week on earnings call, carriers are returning to historical sort of spend levels and carrier profitability remains robust. How should we think about sort of key growth drivers going forward?

Pat Thompson, CFO, Media Alpha: Yeah. I think we’re in a pretty nice industry pretty nice industry backdrop right now where profitability is good. And I think that the challenge a lot of carriers have is that the growth that they’ve put up, the top line growth they’ve put up over the last few years has been driven almost entirely or more than entirely by rate increases. And so most of the policy and force growth has gone to a handful of players or really one player in the industry. And so we’re in a spot now where rate increases are starting to moderate.

And a lot of these carriers are going to see their revenue growth rate, their premium dollars, the growth rates really start to decline. And so I think the opportunity for us and what has me really excited is a bunch of these folks, they might have grown 10%, 15% for the last few years because rates were going up 10% to 15%. While their go forward growth rate’s going to be a lot slower and the pressure is going to mount, I think they’re going to feel more pressure to grow volumes, to grow customers. And our business, it’s a lower funnel business. It’s super data rich.

We are absolutely fantastic at allowing carriers to target their ideal customers and the customers where they’re most likely to win. And we are a channel that, and we have also a lot of tools that allow us to help carriers do that very well and very efficiently without really meaningful headcount investment. And so we think we’re very well positioned to make that happen and it’s an opportunity we’re actually very excited about in the next year or two.

Maria Ripps, Internet Analyst, Canaccord Genuity: I guess maybe expanding on that point, as we think about your order vertical, how should we think about you gaining share as opposed to growth coming from sort of broader industry trends, which seems like that’s moderating now a little bit.

Pat Thompson, CFO, Media Alpha: Yeah, and we’ve been a beneficiary of industry growth, as has the whole sector. And I think that growth is still continuing. I think you can see the numbers everybody’s guiding to for Q3. And carriers are still actively looking for growth and are actively increasing aggregate marketing spend. And so we think that rising tide is, it’s probably eighteen months it’s been happening and we think there’s still more room to run on that side.

And we also feel like we are gaining share. We measure share primarily on the publisher side for us, is are we winning more publishers. But we also have the ability to look at the growth rates we’re putting up and guiding to vis a vis a select set of other competitors. We like the numbers that we’re putting up and we’re obviously eager to see the share gain continue.

Maria Ripps, Internet Analyst, Canaccord Genuity: Maybe spend a minute talking about what differentiates your platform from some other competitors out there?

Pat Thompson, CFO, Media Alpha: Yeah, and I think the biggest differentiator is what our core business model is. And so at our core, we are a two sided online B2B marketplace. And so we have hundreds of publishers. And you can think of those as businesses that have consumers that have some sort of insurance interest or insurance intent. And those could be price comparison sites.

Those could be financial apps. Those could be lead generators. And those could also be carriers themselves. So a carrier might not underwrite people with DUIs. They might not underwrite in Massachusetts.

Or they might have customers that are unlikely to convert that they can market to. And so I think we are different from a lot of our public peers in that that is the absolute focus of our business. And as far as what we think drives us winning over time, one of the big things for us is monetization. And publishers make decisions based on how well it monetizes, how much it costs, and how good the service is. Those are the three main factors they look at.

And on the monetization side, transparency is core to what we do. We feel that as we offer more transparency to advertisers, we get more dispersion in bids. And as you get more dispersion in bids, you get ultimately better monetization for publishers. And by virtue of our scale, being the industry’s largest, we also have some differentiated advertiser relationships where they may only advertise with us, which allows us to deliver more to our publishers. And so we feel like we’re very well positioned.

We’re investing heavily on these vectors, whether it’s excellent account management on the publisher side, whether it’s onboarding and deepening advertiser relationships, or having the best data, which ultimately makes the platform work more efficiently and allows everybody to see better returns. But it’s like that day to day operational playbook drives a lot of our success.

Maria Ripps, Internet Analyst, Canaccord Genuity: And then some of your supply partners, also your demand partners. Can you maybe talk about that dynamic on the platform and how important do you feel that is for your business overall?

Pat Thompson, CFO, Media Alpha: Yeah. So 15 of the top 20 carriers are demand partners of ours in auto insurance. And, you know, almost half of those carriers are publishers of ours. And so, what that means is you could have a major carrier and I go to their site, I enter all my information for a quote, and they either show their rate with ads underneath it, or they show ads on top with the rate below, or they may just show ads with no rate because they don’t have a rate to return. And this is super strategic business for us for a couple of reasons.

First off, that is immensely high quality traffic coming from the carriers because a consumer has gone for a quote like they’re ready to buy when they’re on a carrier site getting quotes. And secondly, it deepens the relationship with the carrier where it’s similar to a lot of financial services. If you have one product, a customer is sticky. If you have two products or three products, they’re stickier. And so we see that as well.

And finally, when a carrier is a publisher, we tend to find that they’re willing to spend more on the marketing side because they’re getting higher returns on every marketing dollar because they’ve got some subset of consumers that they bring to the website that don’t monetize, that are unlikely to convert. And if they can monetize them through advertising, they’re actually better off and thus can pay more for traffic. And so we think it’s a very virtuous cycle. And it’s a business we’ve been in for a long time. It’s a business we keep investing in and it’s one that we’re very excited about going forward.

Maria Ripps, Internet Analyst, Canaccord Genuity: Perfect. So I want to ask you about the mix of private versus open marketplace. So you’ve seen that mix sort of shifting more toward private sort of over time. I guess talk about what’s driving that and how do you see these dynamics playing out over the next couple of years?

Pat Thompson, CFO, Media Alpha: Yeah. Our private marketplace product is really one that is designed for large publishers and their largest advertisers. And so we’re in a spot right now where the demand landscape is relatively top heavy and concentrated in a handful or even fewer than a handful of big advertisers. And so we’ve seen that private marketplace product gaining some traction. And I think I talked about earlier on in the session that one of the things we’re excited about is having other carriers embrace this performance marketing mindset, focus on growth and embrace the channel.

And to the extent we can be successful at that over time, that will start to drive our mix in the opposite direction, which is a more economically lucrative direction for us. So we’re putting a lot of effort there. It’s something we’re optimistic about occurring over time.

Maria Ripps, Internet Analyst, Canaccord Genuity: Perfect. So let’s talk about other verticals. So within, there are two sub verticals within your health vertical, so under 65 and Medicare. So we talked about under 65. Maybe talk about what you’re seeing in your Medicare vertical and what are some of the key Certainly.

Trends

Pat Thompson, CFO, Media Alpha: Yeah, so Medicare is our, it’s our strategic focus within our health vertical. And what Medicare is for us is really Medicare Advantage. It’s the vast, vast majority of what we’re doing there. And so Medicare Advantage, for those of you that don’t know, it’s effectively a privatized HMO solution for Medicare that consumers opt into and they typically get some sort of other incentive for opting into that. And that it’s a market over half of Medicare eligible folks who have opted into Medicare Advantage.

Over $500,000,000,000 is spent on the product every year. And the carriers are struggling in that business right now. I think the medical costs, effectively claims costs for them, has run hotter than expectations. And so they’ve been retrenching their plans to try to get profitability where they want it to be. The implication of that is we’re seeing lots of consumer shopping, but carriers are not active advertisers, generally very active advertisers for us at the moment.

And so the financial profile of the business at the moment is disappointing in the short term. The long term opportunity, we think, is vast because folks aging into Medicare at 65 are much more internet enabled than folks that are 75 and 80. And that trend is only going to continue every year. And it’s a complicated product. It’s an important purchase decision with a lot of comparison.

We think it is primed for online shopping and we’re investing to be at the forefront as that market recovers and as it continues to move online over time.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. Are there any other verticals that you think may make sense for media alpha?

Pat Thompson, CFO, Media Alpha: Over time, I would say potentially. I think we are very focused on insurance today, where auto insurance, big and growing market. Homeowners insurance, big and growing market. Medicare, big and growing. Life insurance, decent sized market.

Maria Ripps, Internet Analyst, Canaccord Genuity: And

Pat Thompson, CFO, Media Alpha: there is a ton of untapped opportunity for us in insurance and that is the near term focus for us is unlocking that.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. I want to ask you about AI and sort of AI driven traffic and how that’s impacting the landscape overall. So as we’re seeing sort of AI generated traffic taking share from traditional search, what does that mean for your platform and just sort of how are you positioned maybe compared to some other platforms out there?

Pat Thompson, CFO, Media Alpha: Certainly. So I think our publisher model is, it’s core to who we are. And our publisher model is very well equipped to adapt to a changing search landscape. And so as we look across our publisher base, we’ve got folks that are employing basically every different marketing strategy. Like we got folks that are SEO.

We have folks that are SEM. We have folks that do branded ads on connected TV. We have people that do TikTok, Snapchat, Facebook, YouTube, kind of you name it, emailers. And one of the beauties of our publisher base is there are a number of folks who basically specialize in capitalizing on new and emerging channels. And with hundreds of these publishers, I can’t tell you which ones are going to be the winner on Perplexity or ChatGPT or Google AI.

The thing I can tell you is we’ve got hundreds of people that are making bets. And some of those bets are going to pay off. I can also tell you that there are new entrants that we maybe aren’t even aware of yet that are also making bets. And some of them are going to emerge, and I am highly confident given our reputation, the quality of our offering, and our scale, that we will win more than our fair share of those folks and be very well positioned to kind of capitalize on the changing search landscape. Unlike some other companies that might be heavily dependent on driving their own traffic, and thus more vulnerable to executing well in a pretty dynamic and unpredictable environment.

Maria Ripps, Internet Analyst, Canaccord Genuity: And maybe more broadly, what are your thoughts on the agentic AI impact in the insurance industry more broadly?

Pat Thompson, CFO, Media Alpha: Yeah, and I would say, I think that question probably has two components. Which is, first off, I’m really excited about what AgenTik AI can do for us given all of the data that we have. We’ve got a tremendous amount of shopping data, conversion data, consumer submitted data, first party, second party, third party. You name it, we’ve got it. And boy, having LLMs or other agentic AI to be able to kind of capitalize and optimize with that data, super, super exciting.

And so we’re getting up the curve to start to capitalize on that, but super exciting mid term, long term opportunity of how do we capitalize on all this data. That’s going to be at the core of that. The second piece of that I think is how will AI change the consumer shopping experience? And probably almost more so than that, the role of the insurance agent in the ecosystem. And I think folks are experimenting with that.

Hard to say exactly how that’s going to play out, but I think it will make aspects of that smoother and allow probably more of a convergence of how consumers shop for insurance. It’ll be less of, hey, I’m going to pick up the phone and talk to an agent, or maybe I’ll deal with an agent chat bot who ingests the information, provides a quote, and then passes it over to something And so there will be lots of changes in how that’s going to happen. And we think, once again, given our partnership model, we’re going to be well equipped to help drive that.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. That makes sense. Let’s, I think we have just a couple of minutes left Let’s touch on a couple of questions on financials. So you guided Q3 transaction value growth in the range of sort of low to mid 20s. So with continuous strength in P and C and offset by declines in HAL that we just talked about.

Sort of what’s your overall guidance philosophy and how conservative do you think this may be? Your guidance may be.

Pat Thompson, CFO, Media Alpha: Yeah, so from a philosophical standpoint, we guide to what we have a high degree of confidence in. And it’s really going to be momentum based for us plus an unknown and expected items, so nothing earth shattering there. The thing I would say is our track record of delivery against guidance over the last three years, think, has been pretty good. It’s something we believe is important as we make commitments to investors. We endeavor fulfill those commitments.

It’s super important and that’s something that we hold as being a high priority for ourselves.

Maria Ripps, Internet Analyst, Canaccord Genuity: And investors certainly appreciate that. So recognizing that you’re not guiding to 2026, sort of how should we think about maybe key growth variables next year given continued momentum in the business offset by sort of more difficult comps and sort of the evolution of your health business?

Pat Thompson, CFO, Media Alpha: Yeah, and I think you’ve probably, you actually summarized the key drivers in that question, which is P and C has good momentum right now. As we look forward into next year, we haven’t given any hard guidance, but we’re feeling good about the trends in P and C and pretty optimistic that it should be a pretty good year on that side of the house. The health business, I think I talked about some of those numbers before, which is $29,000,000 of profit in 2024, dollars 8,000,000 to $10,000,000 this year. And if I had to put a number out there for next year, it’s probably going to be mid single digits of profit. And so that’ll be a bit of a headwind as that rolls through.

But we think we’re in the midst of a good market backdrop for P and C, and we’re feeling pretty optimistic about the future looks like.

Maria Ripps, Internet Analyst, Canaccord Genuity: Perfect. Maybe just to wrap up our discussion, as you think about your business over the next year or two, what are you most excited about?

Pat Thompson, CFO, Media Alpha: Yeah, it’s two things that I think we touched on earlier. One would be broadening and deepening the demand set for us. And we are having more constructive and positive discussions with carriers than we’ve ever had before, Where there are folks that are sharing data that we thought they might never share with us. Or there are folks that are open to testing things that a year or two years ago, they almost rolled their eyes when we suggested. And that is the kind of thing that over a one to two year time period can really, really, can have a really, really powerful effect on our business, particularly if we can get some top five, top 10 carriers to start really punching in their weight class.

The second piece over a one to two year period is data. We believe we have more data than anybody in the insurance space. We’re just getting started capitalizing with that. But the capabilities we have and the tools that are available are both growing at a rapid rate and we’re really excited to see what we can do with that and we think that can be a source of long term sustained competitive advantage for us.

Maria Ripps, Internet Analyst, Canaccord Genuity: Great, well with that we’re out of time, but thank you so much for the discussion and thank you all for joining.

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