MediaAlpha Inc (MAX) Reports Q3 2023 Earnings: Revenue Down 16% YoY, Adjusted EBITDA Grows
MediaAlpha Inc (NYSE:MAX) reports Q3 2023 revenue of $75 million, down 16% year over year.
Transaction Value for the quarter was $109 million, a decrease of 26% YoY.
Adjusted EBITDA for Q3 2023 was $3.6 million, compared to $2.2 million in Q3 2022.
The company expects continued Adjusted EBITDA growth in Q4 2023, driven by gross margin expansion and disciplined expense management.
On November 1, 2023, MediaAlpha Inc (NYSE:MAX) released its financial results for the third quarter ended September 30, 2023. The company reported a decrease in revenue and Transaction Value compared to the same period last year, but saw growth in Adjusted EBITDA despite challenging market conditions.
Financial Performance
MediaAlpha reported Q3 2023 revenue of $74.6 million, a decrease of 16% year over year. The Transaction Value for the quarter was $109.0 million, down 26% YoY. The company's gross margin was 16.5%, compared to 14.2% in Q3 2022. The net loss for the quarter was $18.7 million, an improvement from a net loss of $21.2 million in Q3 2022. Adjusted EBITDA was $3.6 million, up from $2.2 million in the same period last year.
Company Commentary
MediaAlpha CEO, Steve Yi, commented on the results, stating,
Our third quarter results reflected solid execution, as we grew Adjusted EBITDA year over year despite continued challenging market conditions in our property & casualty (P&C) insurance vertical. In the fourth quarter, we expect continued Adjusted EBITDA growth year over year, driven by gross margin expansion and disciplined expense management. We continue to see the benefits of insurance shopping migrating to online channels, and we expect growth to accelerate in 2024 as the P&C cycle turns and carrier advertising spending starts to normalize."
Financial Outlook
For Q4 2023, MediaAlpha expects Transaction Value between $145 million - $160 million, representing a 10% YoY decrease at the midpoint of the guidance range. The company also anticipates revenue between $106 million - $116 million, a 10% YoY decrease at the midpoint of the guidance range. Adjusted EBITDA is expected to be between $9.5 million and $11.5 million, representing a 16% YoY increase at the midpoint of the guidance range.
Summary of Financial Tables
The company's balance sheet shows cash and cash equivalents of $15.2 million as of September 30, 2023. Total assets were $133.0 million, while total liabilities were $232.7 million. The company reported a net loss of $18.7 million for the quarter. For the nine months ended September 30, 2023, net cash provided by operating activities was $14.9 million.
MediaAlpha's consolidated statement of operations shows a decrease in revenue from $89.0 million in Q3 2022 to $74.6 million in Q3 2023. The company's cost of revenue also decreased from $76.3 million in Q3 2022 to $62.3 million in Q3 2023. The net loss for the quarter was $18.7 million, compared to a net loss of $21.2 million in the same period last year.
The company's consolidated statement of cash flows shows a net increase in cash and cash equivalents of $654,000 for the nine months ended September 30, 2023. The company used $14.2 million in financing activities and $60,000 in investing activities during the same period.
Explore the complete 8-K earnings release (here) from MediaAlpha Inc for further details.
This article first appeared on GuruFocus.
