MediaAlpha, Inc.

Thank you for standing by and welcome to Media Alpha Inc. first quarter 2026 earnings call. I'd like to remind everyone that this call is being recorded and that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one in your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Investor Relations. You may begin.

Thanks, Angela. Good afternoon, and thank you for joining us. With me are co-founder and CEO Steve Yee and CFO Pat Thompson. On today's call, we'll make forward-looking statements relating to our business and outlook for future financial results, including our financial guidance for the second quarter of 2026. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q for a fuller explanation of those risks and uncertainties. All the forward-looking statements we make on this call reflect our assumptions and beliefs as of today, and we disclaim any obligation to update such statements, except as required by law. Today's discussion will include non-GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of these non-GAAP financial measures to the corresponding GAAP measures can be found in our press release and shareholder letter issued today, which are available on the investor relations section of our website. I'll now turn the call over to Steve.

Hey, thanks, Alex. Hi, everyone. Thank you for joining us. We're off to a strong start in 2026, delivering record results across all of our key financial metrics. First quarter transaction value came in above the midpoint of our guidance range, reflecting continued strength in auto insurance carrier spend and further broadening of carrier participation on our platform. These dynamics drove a favorable makeshift to our open marketplace, pushing both revenue and adjusted EBITDA above the high end of our guidance. Within P&C, we've seen a number of carriers that were previously punching under the weight in our marketplace take meaningful steps over the last several quarters to increase their spend. As anticipated, this is resulting in a mixed shift towards our higher margin open marketplace, where our estimated 3x scale advantage and unmatched proprietary data fuel highly differentiated predictive AI optimizations that drive better outcomes for our partners. Moving forward, I'm encouraged by the productive conversations we're having with a growing number of leading carriers about further leveraging our trusted infrastructure and AI targeting capabilities to maximize the return on ad spend and gain market share. The underlying auto insurance industry remains healthy. Carriers are strongly profitable and are competing more aggressively by lowering their rates and increasing their advertising spend as they prioritize policy growth. While underwriting margins have begun to decline from record levels, they remain robust by historical standards. We believe these conditions support further growth in our P&C vertical, which continues to benefit from the secular shift in carrier distribution spend from agent commissions and offline advertising to a direct-to-consumer model supported by online performance marketing. While not yet material to our results, our strong first quarter P&C traffic growth suggests that consumers, who are starting their insurance shopping experience on LLMs are driving incremental referrals through our marketplace. During the quarter, we were pleased to see a significant strategic shift by a leading LLM to place greater emphasis on advertising modernization to support their consumer product. We view this as a favorable development that can meaningfully accelerate LLM referral traffic and revenue growth for us and our partners. We remain confident that carriers will stay central to the quoting and binding experience, regardless of how the consumer shopping experience evolves, reinforcing our highly defensible position as a core infrastructure layer connecting carriers with insurance shoppers. As a trusted partner to carriers and a leader in AI-powered insurance distribution, we recently launched autoinsurance.net, a chat GPT-powered shopping experience that simplifies the consumer journey while keeping carriers in full control of their brand, compliance standards, and quoting processes. This is an early proof-of-concept product, and we're excited about what comes next as we continue to build out this capability to better support our partners. On the health insurance side, our under 65 business continues to represent a diminishing portion of our overall mix, which is in alignment with our plans. We continue to believe that Medicare Advantage is the long-term growth opportunity for this vertical. Importantly, we remain focused on utilizing our significant free cash flow to maximize shareholder value. We are executing aggressively on our outstanding share repurchase authorization and have returned over $25 million of capital to shareholders already this year. As we look ahead, we're energized by the opportunities in front of us. Carrier and agent participation in our marketplace continues to expand, and the innovations we're bringing to market are opening new doors for consumers to discover and connect with both carriers and agents. Overall, we believe we're well positioned to deliver both sustained profitable growth and long-term shareholder value. Before turning the call over to Pat, I'm proud to share that MediaAlpha has earned a Great Place to Work certification for the 10th consecutive year, with 95% of our team members affirming that our company is indeed a great place to work. This recognition reflects the strength of our culture and our exceptional team, which underpins everything that we do.