MediaAlpha (MAX) 10 Dec 202020 Q3 Earnings call transcript

Ladies and gentlemen, thanks for standing by and welcome to the MediaAlpha Third Quarter 2020 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Denise Garcia, Investor Relations. you. Thank ahead. go Please

operator. you, Thank

Investor expectations, discussion today letter for for shareholder And the to may we are in about outlook assumptions, forward-looking uncertainties posted section risks be important year the SEC's of management. with statements. means MediaAlpha available the These forward-looking to the website to this will explanation that forward-looking financial website, risks results, on X-K include forecasts, to the address today, on future based guidance which fuller website statements earnings for we information IR for filed including and currently XXXX, a of public and statements regulation SEC to our will applicable could information are Our and disclosure. our to those investors manner full Relations of or a on purposes routinely results and that our our refer information future material subject guidance. non-exclusionary limits we'll use differ the disclosing to and the of Please to the Form fair events materially uncertainties broad cause investors.mediaalpha.com. from today's post a release financial as

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over call the Now, to I'll Steve. turn

Thanks, Denise. company. first our as Hi, a earnings everyone. call Welcome to public

some billion the believe Insurance important the process. with trillion leading the platform in digital the carrier a insurance Before to we we're We connect from opportunity. open increase billion discussed by IPO XXXX call insurance the built to the $XX we stages We've point digital to XXXX. start our purchase. of in to concepts shift distribution want to early projected with enormity of still at/or insurance industry market near $X model. $X of spend carriers and consumers during recap direct-to-consumer to technology is distribution our question, I I'll

has enabled insurance Our three transparent other larger now science data than customer to is marketplaces. one scale, based tremendous approach acquisition times us achieve two to that

serve intelligently platform or carriers by and from distributors. new is unique revenue carriers needs to holistically, ability consumers insurance other generate in Our looking customers, are these referring acquire it's they shoppers non-converting their to whether to insurance

company, a with our our do; transparency underlies to partners, As treat our and we to we team everything we work product from members. how how development, inspires

you. fourth our most our We're for discussing and results Most stewardship. our to that quarter anticipate with of partners. self-funded us, that and forward to ever all, only we quarter. has looking was that of third strong mattered a IPO; we have one growing in the the until I'm profitably our company believe created Our value measures we performance, said, the record-breaking enduring recent importance pleased with scorecard is With

to the So questions we'll open now. call

first comes Doug with [Operator from Morgan. [ph] Instructions] JP Our question Ayman

open. is line Your

and Tigran. One for questions. the taking Steve for thanks one Great, for

imply the growth, health And guide of talked your of Tigran, XQ what's Thanks. of perhaps in -- are driving just of not the puts nine slowdown seasonality with some the the those talk of transaction second, enrollment, increased you're in Just about growth, takes you also XQ. some us first And value evolving the you talk strong about then that just partners talked you letter, largest platform momentum months XX%-ish year-over-year around are some carriers? given about you relative And maybe who bigger year. some XQ. about on could the with then, Steve, spend the shareholder seeing first, XX carriers conversations in and today. does annual kind to carrier through Can some to of the just the growth XX% tell

Thanks. Doug. Hey,

your about insurance the Top carriers. question increasing XX first trend from to So our

was that new on keep some XX. are growth Top as the Now, XX who Top now, it to from so and right of

had discovering so is is ones, do to you channels large when typically policies; there. offline make when and traditional they these to investments to that tend their so And companies, and relied I'll sell is what transition online, on here a we're their tell that, insurance increase rapidly direct-to-consumer, agents that to the they what spend

rates high insurance most as saw investment from our ecosystem partners in year from traditional their growth the the QX carriers, this Top XX so, growth of outsized of in space, in [ph] the P&C of increased reflect think you rapidly large And the XXXX. that notably rates I some who

add carriers do spend, sure those all as many as day-to-day consultative about In and are the mean side. this each it's demand -- always from our of work their in had possible. existing partnerships. us and are a I'll on add supply all account both carriers by-partners; that us already, as the in platform, of efficiently We to and the growth terms their QX, to for advertised from We demand to of growth the tell for what coming who carrier carriers, so we're is never you But day-to-day management, measured the with who that looking top we I make not with the before. and insurance of the of channel is our as on work did platform; really, all investments carriers as granularly insurance top new insurance partners, both that

some we because of just into while be in And carriers we've are coming of already. the is already so new major there worked platform, have, will verticals existing -- the across so carriers focus with many already our that insurance partnerships all the really the growing so that

great. seasonality puts that's takes, Any helpful. just perhaps? guide; the dynamics any thoughts and on and of XQ That's some Okay,

Doug. Yes,

I think hit you it on seasonality. that

So, as in a a period reminder, tends to seasonally be weaker QX P&C.

open we And driving so QX a in Health; the down P&C period see the come Medicare QX. and in seen enrollment November, vertical, so from you little through do have that's QX strong a in both, guidance bit and

line. on our a obviously that in year, other verticals Another was would the pre-COVID, year, obviously is In challenge. this last top note that travel big vertical is, be other considered

up pickup In And just about there, that starting following you see think any travel how coming are vertical? to in do back? you XXXX,

Doug, not. some with. increase GSA a translated travel stat. It seeing I of the we We're hasn't spend air mean, it's in travel, and big in increases monitor, Steve. we that's into that from work advertising we're terms that something companies

it's predict for For kind we're us feel but markets we back; back. come market right that now, of one, to comes positioned when hard that the well

both. Okay, great. Thank you,

Zaremski with comes next Suisse. Michael from question Credit Our

open. is line Your

base? be might on about a -- a platform, your your back evening. good top first what I as Like, we advertised thinking should given smaller, some to of understand. more spend disproportionately carrier it's question, ecosystem. thinking -- of kind somewhat niche? to of I client that we -- niche kind given than big be Just it it's from Hey, in a be should who differently carrier about never adding it's other comments your carriers maybe do had pretty Curious, trying a guess, maybe the carrier

Mike. think Hey, so. I don't

I either more our tell it's to the been or is years; new then start start to that carriers to to in transition and our still -- ecosystem then, they carriers what that And who've more with think you we with begin ecosystem. stages. direct-to-consumer when I work start are on invest in working focus mean, for early who I'll

You to know, up. to that's that's come curve one that -- years growth two the takes

curve experience; traditional quickly what early to years. it's of last look or ones riders, you're up is so, to the going a some the that the carrier transition now, two over that more tell curve learning right curve too adoption that are they adoption has may than the agency lot And curve come referring of direct or so who've who that like. to made But

that's Okay, helpful.

out should negative correctly, sure just I'm trends switching contribution be pointed margin; other that Just a might have that you margin just there was any on to or we had secular saying, there of think a the want to think I contribution it may about? that you're gears make influence. I interpreting I kind partner the -- thinking are be one-time

is me Steven, let Mike, that. this take

us to early, earlier early had prior that had economic in the pay period on a step, first relationship a partner commenced a the platform that their with provider. the That's start long-term contribution in Just through margin. the X; to relationship really transition October to signed fee the XXXX they wanted contemplated starting but deal we

partner. that see to from temporary [ph] no so margin but one-time And but there, on really that a business we took you QX; contribution partner a where be took in QX, no good revenue issue in

quantify And impact about? the out think Is for Tigran, to we call it should you us? did that

our XX% would revenue a basis, little pro to forma have point in On added X. which percentage that the have commenced over contribution so would share, our one had a Yes. contractual we share, right, on little QX, a partner over October taken X%, that margin; revenue been

Okay.

should than other And -- no [ph]? that, into years we and about be so trends outer -- no other thinking

No.

Okay.

a almost travel; about a other kind I back the the the -- the given in eventually should not go million cloudy, primary way I -- be Lastly, if eventually outlook and revenues we of little but that you're $XX I in hopefully, thinking driver to come we can in we be it's pandemic. of the back travel -- saying guess right if might -- But segment? of year-over-year could drop kind know should mean, real

Yes, Mike.

is what's the the it going be in mean, into but at -- year that I terms I happened one, with your timing of mine, be. we next, this as that what guess now what with study to assume the comfortable uncertainty good to can as back but will would would On feel you what's going and we're you, timing around, saying hard I see think be. say to I really honest looking what this the it's will industry, say on; come

Okay, understood. very Thank you much.

from question [Operator Citi. next with Grossman Instructions] Our Daniel comes

Your open. line is

to trends taking guys. the good Obviously, a versus just has congrats everything want ended. on that different AEP any bit curious, the or gate. I kind of coming you've were customer perspective that this Anything a partner quarter on previous now, was the year? clicks, if Hi, online out calls, and or -- last moved of leads; seen referrals so of Thanks period for demand of kind that focus Medicare just from a years? different anything little amount question, different this versus year the year through

was out, there nothing call say would right. to I specific

support so some I of the just AEP our -- was partners that among had precipitates but customer new now demand was acquisition, in growing of advantage increased Medicare strong, adoption starting investment heavier demand, direct-to-consumer; Medicare pool. and a experience of we've entrants online performance. to in increased very which And an think online-only adoption then the of the the into form it strong

and a all while. secular that of and seen trends trends trends for are So, we've demographic those

hadn't period So all trends, not this just contributed that thing strong that any of one we to and believe a a seeing us; AEP those we're for really continuation in of those anticipated. things we

you. Got

sales Okay, -- address going that agents? the to that make kind of the you agency you traditional then, And newer is channel? makes the can selling Any for folks of on progress comments channel. into leads hiring And channels sense. to you're the one

absolutely. Yes,

launched of are typically great to a think carriers, outreach we to And is something Arizona, because used going; that place well, them team require that's I right point in going opposed many insurance team different up, as it and as making doing. a out, that good our we're to progress, hiring you're to in work team does ramping agents the there how's the we is hiring in very QX. have with

of that those making so room a making to feedback understand ecosystem, transparency starting what revenue and are we we're this their agency on, Because all disruption now, in with, control in thing happy that needs to And with is. very are, that to really it's one here; early working encouraging the to early lacking that what that here. things think there brought from sure that we the granularity -- the space right up us team, for organization we're the that, and here, dig we're with that is our is their seeing there on are of that are focused innovation for sure we're in and ramp building room I business adopters, generate -- but is that we

ways we're from making. then, to so the opportunities we're We a this but expect of and very here; coming seeing we're have address it with the in business progress happy see what different And growth are we results forward. and strong and in -- going lot we

last double looks of transaction Got IPO Tigran; maybe from was it numbers one, for you. were the the flashed And what like in you expenses perspective. expecting

we caused for that year? the should the what curious, that how think rest Just about double? to And of

Dan. Okay,

items. to flash recurring expensed were and So those sheet on when that are range some we those be reflected that needs one-time items; formulating, closing, we one-time, determined the as were balance IPO-related not as transaction expenses of

monthly a adjustments going EBITDA that not then, these items. see that of beyond you to can expect see expect to QX, number IPO. the and one-time normalize in forward to And You transaction the close similar obviously, reflect to

right. All guys. it. Got Thanks,

Our next question Graham comes Canaccord. with from Michael

Your line open. your Michael is open. line is Graham,

I And question well comment is of most you for those the as on with on, into first that sorry, demand taking working just the of partners if was on more of platform? carriers dynamic partners, guys, question. turning opportunity mute. is the folks would you're opportunity? thanks [ph] dynamic on your that Hey be supply for And into My you? Hey, of advantage are converting that taking can wondering

Hey Michael, absolutely. Yes, Steve. it's

partnerships recently, know, of -- have with, already also expanding as carriers; to partners, we supply and we partners both so over I we but What is, work we've are. in the progress those a don't most made and that getting the lot partnerships, in insurance be about sure; place. think XX I happy demand expanding terms new we're that that partnerships,

years adopting to they're development in a in past, three explain a that and competition customer carriers in we for in and toes this that the carriers; then there that lot with to or water, costs there, really the due tried in believe or partnerships. marketplace interest is take P&C market, customer and Because to space; that the to dipping relationship increase partnerships then years great it is this increased we've more. as we offset we've and relationships insurance have one are costs, way to with seeing place how those As happy to these greater typically, but supply a become to the expanding these acquisition. in cycle, been can cycle, the from have expanding had program, the openness not acquisition start is of may is, for is competitive just two particularly this; stock in has insurance acquisition two expand And customer I about the what expanding now it their with

on insurance more more see prominent, -- like seems specifically, picture the guess, ask just auto question I Okay, market; I to DTC should we bigger it as policies and thanks wanted consumers for switching And then, that. a frequently. becomes

shop how And true? two So, volumes going because term more LTVs -- compare, transaction foresee be wondering lower does just wondering, to under issues potential if LTVs and might the pressure from losing of more higher be if you And do frequently? that out? dynamic customers they're transactions a that's sort -- better for and are those is see for where that that playing longer carrier you you -- versus any outcome I your think platform? if Just you think

we're open -- switching non-standard to drivers, -- drivers seeing It's that's time now hard because with that's consumers and policies say, some seeing that that of been for I is policies, been so. we're switching Yes, open right. mean, do period are more policies to Michael. being what now. a have standard as the comparing they can standard which I more, what the to question, are ease and good

And it again, would but I I is consumers? then to the value mean, comparison if so, I expected when bit have that that the we in it's impact insurance in that lower a be is, say. hard mean, how -- switching confidence it increased what these expected right lifetime of factor will to to is able quickly these lifetime of comes to it value the carriers in, with work consumers. what assessing that factor are there and

Yes.

a thanks Okay, lot.

And ultimately for they that able or us the LTV. expected to accurately that's right, that what's evaluate important, factor in being

Yes.

I Steve. Okay. it. appreciate Thank you,

today's conference this There time. at concludes are This no questions call. further

disconnect. now may You