MediaAlpha, Inc.

Ladies and gentlemen, thank you for standing by. My name is Angela and I will be your conference operator today. At this time, I would like to welcome everyone to the Media Alpha, Inc. second 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 this time, Simply press star followed by the number one in your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Alex Leloya. Please go ahead.

Thanks, Angela. Good afternoon, and thank you for joining us. With me, our co-founder and CEO, Steve Yi, 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 third 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 these risks and uncertainties and the limits applicable to forward-looking statements. 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, an investor supplement issued today, which are available on the investor relations section of our website. I'll now turn this call over to Steve.

Thanks, Alex. Hi, everyone. Thank you for joining us. We delivered record second quarter results as demand continued to broaden across our marketplace. Each quarter, additional P&C carriers are unlocking advertising spend, expanding their campaign, and leaning further into our marketplace. This is no longer just a story about concentrated growth among a handful of large partners. It's a winding base of carriers that keeps ramping. Although down from peak levels, underwriting profitability in personal auto remains historically strong. This is driving carriers to compete more aggressively by lowering rates and spending more on advertising to acquire new customers. We're seeing this intensified competition show up in a meaningful way across our marketplace. When we look at the current concentration of carrier advertising spend, we believe the inevitability of further broadening becomes clear. Since 2021, over 80% of P&C ad spend growth, both in our marketplace and others, has come from just two carriers. That leaves a wide segment of the market that has yet to meaningfully scale, and we're increasingly seeing those carriers begin to close the gap. To put this in perspective, our top two carriers spent a double-digit percentage of their total ad budgets with us in 2025, compared with the rest of our top 10 carriers, which collectively spent about 3% of their total ad budgets with us. were seeing strong evidence that a growing number of carriers are preparing to allocate a meaningfully higher share of their advertising budgets to our marketplace. For example, our third, fourth, and fifth largest carriers nearly quadrupled their spend with us in the first half of 2026 as compared to the first half of 2025. We believe we're at the beginning of what we see as a massive growth opportunity in the years ahead, driven by the industry's ongoing transition from agent-based distribution, largely supported by brand advertising, to direct consumer distribution supported by highly targeted performance-based advertising. Our scale and proprietary data allow carriers making this transition to target online insurance shoppers through our open marketplace with a level of precision that allows them to compete far more effectively than would otherwise be possible. As we continue to deliver significant value to these carriers, we're becoming more deeply embedded in their customer acquisition processes, resulting in stickier, higher-value partnerships, The better the outcomes we deliver, the more budget these carriers commit to us, and the wider that pool of active demand partners becomes. While we have long believed that most of the industry will transition to direct-to-consumer distribution over time, recent advances in AI suggest that the pace of this transition is likely to accelerate in the near term. On the carrier side, AI is making direct-to-consumer acquisition increasingly attractive by allowing a greater percentage of consumers to purchase policies without interacting with the live agent, resulting in both higher conversion rates and lower acquisition costs. We believe these improved economics will make the online direct-to-consumer channel even more attractive to carriers, particularly those who have traditionally sold through agents. On the consumer side, AI-powered search has the potential to improve both the quality and quantity of online insurance shoppers by helping consumers become better informed before they begin their shopping process, which will result in higher-intent consumers entering the top of the funnel. Lastly, we're leveraging predictive AI throughout our marketplace to better target consumers and improve return on ad spend for our carriers and yield for our publishers. As a two-sided marketplace, we believe these dynamics reinforce our competitive position by connecting carriers and shoppers more efficiently, accelerating the industry's shift towards direct-to-consumer distribution, and expanding our long-term market opportunity. As we look ahead, we're optimistic about our near-term and long-term growth opportunities. In the near term, it's about broadening demand as additional carriers allocate a more meaningful share of their ad budgets to our open marketplace in order to stay competitive in a changing market. Over the longer term, it's about the shift from the legacy model where carriers use brand advertising to drive foot traffic to agents to a model where carriers leverage rich data to target consumers directly with precision through measurable online advertising channels like ours. With carriers still incurring more than $2 in agent commissions for every dollar they spend on advertising, and with only 40% of that advertising dollar currently allocated to digital, we believe we have a long runway ahead of us to grow our business and deliver significant value to our shareholders. With that, I'll hand it over to Pat. Thanks, Steve.