MediaAlpha expects fourth-quarter revenue of $355 million to $375 million
Key Facts
MediaAlpha reported results on October 28 for the third quarter ended September 30 and provided a fourth-quarter revenue range of $355 million to $375 million, equivalent to 25% year-over-year growth at the midpoint of the guidance, according to the company’s statement. Third-quarter revenue was $375.9 million, up 22.7% year over year and a record. Net income rose to $29.4 million, up 66.4% year over year, while adjusted EBITDA was $39.5 million, up 35.8%. CEO Steve Yi said insurers were “competing aggressively for new policies and allocating significant budgets to home and auto insurance.” The company’s shares, which trade under the ticker MAX, closed at $11.72 on October 28.
The third-quarter results followed an update the company issued on September 3, saying it then expected results to reach or exceed the high end of its previous guidance ranges. Actual revenue exceeded analysts’ estimate of $347.93 million, according to Investing.com, while adjusted earnings per share were $0.46 against an estimate of $0.27. Gross profit margin was 14.7%, compared with 14.2% in the same quarter a year earlier. Contribution was $57.4 million, up 25.8% year over year. In the second quarter, the company reported record revenue of $316.9 million, up 26% year over year, and net income of $41.8 million.
MediaAlpha expects fourth-quarter contribution of $54.0 million to $57.0 million, representing 18% year-over-year growth at the midpoint. It also set a range of $36.0 million to $39.0 million for adjusted EBITDA, with expected year-over-year growth of 22% at the midpoint. The company attributes the strength of its property and casualty insurance business to insurers’ investments in growth and market-share gains. By contrast, it expects the health insurance segment to account for about 4% of fourth-quarter revenue, as the period coincides with the peak of annual enrollment. These estimates put the seasonal segment mix alongside continued insurance spending at the center of the company’s outlook for the coming period.
On liquidity, the company maintained its forecast for free cash flow of $90 million to $100 million in fiscal 2026. MediaAlpha defines free cash flow as cash generated from operating activities less capital expenditures. This annual target accompanies its fourth-quarter guidance for revenue, contribution and adjusted EBITDA. During the third quarter, the company repurchased about 0.8 million shares for $9 million. That brought total repurchases under its $100 million program to $64 million, equivalent to 6.2 million shares through the end of the third quarter; it had repurchased more than $41 million of shares in the first half of the year.
Management links its longer-term outlook to the shift toward digital customer acquisition and the scale advantages it says the company has. MediaAlpha said these factors could allow it to deliver double-digit growth in 2027 and beyond. In the near term, the next milestone is execution against its fourth-quarter ranges, with the company expecting health insurance to remain at about 4% of revenue during the peak annual enrollment period. The published guidance reflects 25% year-over-year growth at the midpoint of the revenue range, alongside expected growth in contribution and adjusted EBITDA at the midpoints of their respective ranges. The company’s fiscal-year free cash flow target remains $90 million to $100 million, according to its announcement.
The shares reacted to the results after the regular-session close at $11.72 on October 28, rising 19.37% in after-hours trading to $13.99, according to Investing.com. The previous close on October 27 was $11.77, according to EL7 data. These prices provide a timeline for the share move around the earnings announcement, while the documented data do not include the session high or low. The results combined a beat on revenue and adjusted earnings per share with record third-quarter revenue. The company’s guidance covers the fourth quarter and fiscal 2026, while management’s growth outlook extends to 2027 and beyond.