MediaAlpha (NYSE:MAX) executives said 2025 marked a “pivotal year” for the insurance advertising marketplace, driven primarily by a surge in property and casualty (P&C) demand and accompanied by a strategic narrowing of its Under-65 Health business.
Management highlights: P&C momentum and a tighter Health focus
Co-Founder and CEO Steve Yi said the company delivered “exceptional results” in P&C as auto insurance carriers and agents accelerated advertising spend, adding that MediaAlpha captured “more than our fair share” of that growth. In contrast, Yi said MediaAlpha narrowed the scope of its Under-65 Health insurance business to improve its risk profile and sharpen strategic focus.
Looking into 2026, Yi said the P&C business started strong and the company expects “continued positive momentum for the full year and beyond.” He described the industry as entering the early stages of a soft market, with carriers increasingly focused on growing customer bases and competition intensifying as some carriers lower rates to gain share. Yi said advertising is one of the main growth levers available to carriers and expects ad budgets to keep rising, adding that MediaAlpha’s scale and targeting across hundreds of supply partners should help it gain wallet share.
AI and insurance shopping: “the short answer is no”
A significant portion of the call focused on artificial intelligence and how large language models (LLMs) may change insurance shopping behavior. Asked whether MediaAlpha’s role changes if consumers start their search with an LLM instead of Google, Yi said, “the short answer is no,” arguing AI’s impact is concentrated at the top of the funnel (research and shopping), while quoting and binding still require carrier-controlled systems.
Yi said carriers are protective about how and where rates are displayed and that major carriers have historically resisted models that commoditize their product into side-by-side comparisons or shift transactional control to a third party. As a result, he said the company expects most major carriers will continue to keep pricing from being freely accessible through third parties, including LLMs.
On how LLMs may integrate into the ecosystem, Yi said it is more likely they become a traffic source for existing MediaAlpha supply partners rather than directly acting as supply partners themselves. He cited anecdotal feedback from supply partners that “mid to high single digits” of their traffic is coming from LLMs in the early stages, and said that as LLMs layer on advertising models, it could become an incremental traffic acquisition channel.
In response to questions about whether large carriers might provide rates to LLMs over time, Yi reiterated the view that rates pulled into an LLM environment would likely remain limited to independent agent carriers. He compared it to searching airfares on Kayak without seeing rates from major airlines, arguing that while it can be a good experience, it would not be complete if major brands are missing.
Financial recap: record 2025 and Q4 results
CFO Pat Thompson said 2025 was a record year in which MediaAlpha exceeded several milestones for the first time: $2 billion in Transaction Value, $1 billion in revenue, and $100 million in adjusted EBITDA.
- 2025 Transaction Value: up 45%, driven by 65% growth in P&C, which more than offset what Thompson called the “expected reset” in Under-65 Health.
- Under-65 Health revenue contribution: approximately $7 million in 2025, down from $41 million in 2024.
For the fourth quarter, Thompson reported Transaction Value of $613 million, up 23% year-over-year, including 38% growth in P&C and a 40% decline in Health. Revenue was $291 million, down 3% year-over-year as reported, but up 9% excluding Under-65 Health, as P&C growth mostly offset health declines.
Adjusted EBITDA in Q4 was $30.8 million, down 16% year-over-year. Thompson said that excluding Under-65 Health, adjusted EBITDA grew about 10% in the quarter, reflecting P&C momentum. He also said the company converted 66% of contribution to adjusted EBITDA, which he attributed to an efficient operating model. The Q4 take rate was 7.6%, “slightly above expectations,” driven by favorable Open Marketplace mix, and Thompson said take rates in Q1 are expected to be above Q4 levels.
Cash flow, balance sheet, and buybacks
Thompson said MediaAlpha generated $99 million of free cash flow in 2025, defined as operating cash flow less capex and excluding a $34 million FTC payment (or $65 million “on a net basis” including that payment). The company ended 2025 with $47 million in cash.
Thompson also noted the company met U.S. GAAP requirements to release the valuation allowance on deferred tax assets and recognized the related tax receivable agreement (TRA) liability, which resulted in a “gross up” to the balance sheet. He said the company’s Up-C structure generates tax benefits, from which MediaAlpha retains 15% of the savings through basis step-ups over the next 15 years.
On capital allocation, Thompson said the company repurchased about 1.1 million shares for $14 million in Q4, and reiterated full-year repurchases of about $47 million. He also said the board authorized a $50 million increase in the buyback program to $100 million, with the company expecting to complete the vast majority of it in 2026.
Q1 2026 guidance and longer-term framing
For the first quarter of 2026, Thompson guided to Transaction Value of $570 million to $595 million, up about 23% year-over-year at the midpoint. He said P&C Transaction Value is expected to grow about 35% year-over-year, driven by strong carrier demand and continued share gains, while Health Transaction Value is expected to decline about 50% year-over-year, primarily due to Under-65 Health.
Thompson guided to revenue of $285 million to $305 million (about 12% growth at the midpoint) and adjusted EBITDA of $29.5 million to $31.5 million (about 4% growth at the midpoint). Excluding Under-65 Health, he said adjusted EBITDA is expected to grow about 25% year-over-year at the midpoint. He added that contribution less adjusted EBITDA is expected to be roughly $500,000 to $1 million higher than in Q4 2025.
While the company did not provide formal full-year 2026 guidance, Thompson said MediaAlpha expects P&C Transaction Value to continue driving growth as carriers seek to expand in the soft market environment. In Health, he said the business is becoming “a smaller, more focused operation,” expected to represent a mid-single digit percentage of total Transaction Value in 2026, while reiterating that Medicare Advantage remains a “meaningful long-term growth opportunity.”
Thompson guided to 2026 free cash flow of $90 million to $100 million, including an $11.5 million final FTC payment made in January. He also said there is a TRA payment going out in Q1 in the “mid-single-digit millions,” describing it as the primary cash tax-related outflow for calendar 2026.
About MediaAlpha (NYSE:MAX)
MediaAlpha, Inc is a technology company that operates a real-time digital marketplace for the distribution of insurance and adjacent services. The company’s platform connects buyers—consumers seeking insurance policies—to sellers, including insurance carriers and distribution partners, through programmatic bidding and data-driven pricing. By leveraging transaction-level data and proprietary auction mechanics, MediaAlpha enables carriers to acquire customers more efficiently and at scale.
The firm offers a suite of products that help clients optimize marketing spend and improve conversion rates.
