MediaAlpha Inc

Previous wording

Our mission is to help insurance carriers and distributors target and acquire customers more efficiently and at greater scale through technology and data science. Our technology platform brings together leading insurance carriers and high-intent consumers through a real-time, programmatic, transparent, and results-driven ecosystem. We believe we are the largest online customer acquisition platform in our core verticals of property & casualty ("P&C") insurance, health insurance, and life insurance, supporting $599 million in Transaction Value across our platform from these verticals over the twelve-month period ended March 31, 2024.

Current wording

Our mission is to help insurance carriers and distributors target and acquire customers more efficiently and at greater scale through technology and data science. Our technology platform brings together leading insurance carriers and high-intent consumers through a real-time, programmatic, transparent, and results-driven ecosystem. We believe we are the largest online customer acquisition platform in our core verticals of property & casualty ("P&C") insurance, health insurance, and life insurance, supporting $797 million in Transaction Value across our platform from these verticals over the twelve-month period ended June 30, 2024.

Previous wording

We have multi-faceted relationships with top-tier insurance carriers and distributors. A buyer or a demand partner within our ecosystem is generally an insurance carrier or distributor seeking to reach high-intent insurance consumers. A seller or a supply partner is typically an insurance carrier looking to maximize the value of non-converting or low expected LTV consumers, or an insurance-focused research destination or other financial website looking to monetize high-intent users on their websites. For the twelve-month period ended March 31, 2024, the websites of our diversified group of supply partners and our proprietary websites drove an average of 8.4 million Consumer Referrals on our platform each month.

Current wording

We have multi-faceted relationships with top-tier insurance carriers and distributors. A buyer or a demand partner within our ecosystem is generally an insurance carrier or distributor seeking to reach high-intent insurance consumers. A seller or a supply partner is typically an insurance carrier looking to maximize the value of non-converting or low expected LTV consumers, or an insurance-focused research destination or other financial website looking to monetize high-intent users on their websites. For the twelve-month period ended June 30, 2024, the websites of our diversified group of supply partners and our proprietary websites drove an average of 8.5 million Consumer Referrals on our platform each month.

Previous wording

For the three months ended March 31, 2024, we generated $126.6 million of revenue and $219.1 million of Transaction Value, representing increases of 13.5% and 13.4%, respectively, compared with the three months ended March 31, 2023, driven primarily by higher customer acquisition spending by P&C carrier partners, and by higher demand in under 65 health and opportunistic partner spend in Medicare.

Current wording

For the three months ended June 30, 2024, we generated $178.3 million of revenue and $321.8 million of Transaction Value, representing increases of 110.3% and 155.6%, respectively, compared with the three months ended June 30, 2023, driven primarily by significant increases in customer acquisition spending by multiple P&C carrier partners as they refocus on growth in light of improved underwriting profitability.

Previous wording

Contribution, which generally represents revenue less revenue share payments and online advertising costs, was $27.7 million for the three months ended March 31, 2024, a year-over-year increase of 29.2%, driven primarily by the higher revenue. Contribution Margin was 21.9%, compared with 19.2% in the three months ended March 31, 2023.

Current wording

Contribution, which generally represents revenue less revenue share payments and online advertising costs, was $33.7 million for the three months ended June 30, 2024, a year-over-year increase of 104.1%, driven primarily by the higher revenue. Contribution Margin was 18.9%, compared with 19.5% in the three months ended June 30, 2023.

Previous wording

Net loss for the three months ended March 31, 2024 was $1.5 million, compared with a net loss of $14.6 million for the three months ended March 31, 2023, driven primarily by the increase in gross profit of $5.3 million and a $5.7 million decrease in equity-based compensation expense, as well as by a $1.4 million impairment charge related to a cost method investment recorded during the three months ended March 31, 2023 that did not recur in the current period.

Current wording

Net income for the three months ended June 30, 2024 was $4.4 million, compared with a net loss of $20.0 million for the three months ended June 30, 2023, driven primarily by the increase in gross profit and decrease in equity-based compensation expense.

Previous wording

Adjusted EBITDA for the three months ended March 31, 2024 was $14.4 million, a year-over-year increase of 98.5%, due primarily to higher gross profit as well as continued expense discipline.

Current wording

Adjusted EBITDA for the three months ended June 30, 2024 was $18.7 million, a year-over-year increase of 421.7%, due primarily to higher gross profit as well as continued expense discipline.

Previous wording

We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is an operating metric not presented in accordance with GAAP, and is a driver of revenue based on the economic relationships we have with our partners. Transaction Value from Open Marketplace transactions is a direct driver of our revenue, while Transaction Value from Private Marketplace transactions is an indirect driver of our revenue (see “Key business and operating metrics” below). Transaction Value on our platform increased to $219.1 million for the three months ended March 31, 2024, from $193.2 million for the three months ended March 31, 2023, due primarily to an increase in customer acquisition spending by P&C insurance carriers in response to improvements in their underwriting profitability. We have developed multi-faceted, deeply integrated partnerships with insurance carriers and distributors, who may be both buyers and sellers on our platform. We believe the versatility and breadth of our offerings, coupled with our focus on high-quality products, provide significant value to insurance carriers and distributors, leading many of them to use our platform as their central hub for broadly managing digital customer acquisition and monetization, resulting in strong retention rates. For the three months ended March 31, 2024, 99% of total insurance Transaction Value executed on our platform came from demand partner relationships in existence during 2023.

Current wording

We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is an operating metric not presented in accordance with GAAP, and is a driver of revenue based on the economic relationships we have with our partners. Transaction Value from Open Marketplace transactions is a direct driver of our revenue, while Transaction Value from Private Marketplace transactions is an indirect driver of our revenue (see “Key business and operating metrics” below). Transaction Value on our platform increased to $321.8 million and $540.9 million for the three and six months ended June 30, 2024, respectively, from $125.9 million and $319.1 million for the three and six months ended June 30, 2023, respectively, due primarily to an increase in customer acquisition spending by P&C insurance carriers in response to improvements in their underwriting profitability. We have developed multi-faceted, deeply integrated partnerships with insurance carriers and distributors, who may be both demand partners and supply partners on our platform. We believe the versatility and breadth of our offerings, coupled with our focus on high-quality products, provide significant value to insurance carriers and distributors, leading many of them to use our platform as their central hub for broadly managing digital customer acquisition and monetization, resulting in strong retention rates. For the three and six months ended June 30, 2024, 97% and 98% of total insurance Transaction Value executed on our platform, respectively, came from demand partner relationships in existence during 2023.

Previous wording

We retain and attract demand partners by finding high-quality sources of Consumer Referrals to make available to our demand partners. We obtain these Consumer Referrals from our diverse network of supply partners as well as from our proprietary properties. We seek to develop, acquire and retain relationships with high-quality supply partners by developing flexible platforms to enable our supply partners to maximize their revenue, manage their demand side relationships in scalable and flexible ways and focus on long-term sustainable economics with respect to revenue share. Our relationships with our partners are deep and long standing and involve most of the top-tier insurance carriers in the industry. In terms of buyers, during the three months ended March 31, 2024, 13 of the top 20 largest auto insurance carriers by customer acquisition spend were on our platform.

Current wording

We retain and attract demand partners by finding high-quality sources of Consumer Referrals to make available to our demand partners. We obtain these Consumer Referrals from our diverse network of supply partners as well as from our proprietary properties. We seek to develop, acquire and retain relationships with high-quality supply partners by developing flexible platforms to enable our supply partners to maximize their revenue, manage their demand side relationships in scalable and flexible ways and focus on long-term sustainable economics with respect to revenue share. Our relationships with our partners are deep and long standing and involve most of the top-tier insurance carriers in the industry. In terms of demand partners, during the six months ended June 30, 2024, 13 of the top 20 largest auto insurance carriers by customer acquisition spend were on our platform.

Previous wording

Our results depend in large part on the number of Consumer Referrals purchased on our platform. The aggregate number of consumer clicks, calls, and leads purchased by insurance buyers on our platform increased to 26.6 million for the three months ended March 31, 2024, from 24.9 million for the three months ended March 31, 2023. We seek to increase the number and scale of our supply relationships and drive consumers to our proprietary properties through a variety of paid traffic acquisition sources. We continuously look to diversify our paid media sources to extend beyond search engine marketing, which has historically represented the bulk of our paid media spend, into other online media sources, including native, social, and display advertising.

Current wording

Our results depend in large part on the number of Consumer Referrals purchased on our platform. The aggregate number of consumer clicks, calls, and leads purchased by insurance buyers on our platform increased to 26.2 million and 52.8 million for the three and six months ended June 30, 2024, respectively, from 24.3 million and 49.2 million for the three and six months ended June 30, 2023, respectively. We seek to increase the number and scale of our supply relationships and drive consumers to our proprietary properties through a variety of paid traffic acquisition sources. We continuously look to diversify our paid media sources to extend beyond search engine marketing, which has historically represented the bulk of our paid media spend, into other online media sources, including native, social, and display advertising.

Previous wording

Our results are also subject to fluctuations as a result of business cycles experienced by companies in the insurance industry. These cycles in the auto insurance industry are characterized by periods of “soft” market conditions, when carriers are profitable and are focused on increasing capacity and building market share, and “hard” market conditions, when carriers are experiencing lower or even negative underwriting profits and are seeking to increase their premium rates to improve their profitability. As our demand partners in these industries go through these market cycles, they often increase their customer acquisition spending during soft markets and reduce it during hard markets, causing their relative demand for Consumer Referrals from our platform to increase and decrease accordingly. Beginning in the second half of 2021, the auto insurance industry entered a "hard” market, with many carriers experiencing lower than expected underwriting profitability due to higher than expected inflation in automobile claims costs, causing them to significantly reduce their customer acquisition spending on our platform. In late 2023, P&C insurance industry profitability began to improve as premium increases began to outpace loss cost inflation and we believe that the cycle is now turning and a market recovery is underway. While we expect this improvement to continue, driving increases in P&C insurance revenue over the course of 2024, we are currently unable to accurately predict the pace or slope of this recovery from this cyclical downturn, or its impact on our revenue from the P&C insurance vertical or our profitability, beyond the second quarter of 2024.

Current wording

Our results are also subject to fluctuations as a result of business cycles experienced by companies in the insurance industry. These cycles in the auto insurance industry are characterized by periods of “soft” market conditions, when carriers are profitable and are focused on increasing capacity and building market share, and “hard” market conditions, when carriers are experiencing lower or even negative underwriting profits and are seeking to increase their premium rates to improve their profitability. As our demand partners in these industries go through these market cycles, they often increase their customer acquisition spending during soft markets and reduce it during hard markets, causing their relative demand for Consumer Referrals from our platform to increase and decrease accordingly. Beginning in the second half of 2021, the auto insurance industry entered a "hard” market, with many carriers experiencing lower than expected underwriting profitability due to higher than expected inflation in automobile claims costs, causing them to significantly reduce their customer acquisition spending on our platform. In late 2023, P&C insurance industry profitability began to improve as premium increases began to outpace loss cost inflation, causing them to begin to resume their marketing investments. This recovery gained significant momentum during the first half of 2024 as multiple carriers meaningfully increased their spending in our marketplaces, and we expect this trend to continue as additional carriers refocus on growth in response to improved underwriting profitability.

Previous wording

Our revenue and earnings may fluctuate from time to time as a result of federal, state, international and industry-based laws, directives and regulations and developing standards with respect to the enforcement of those regulations. Our business is affected directly because we operate websites, conduct telemarketing and email marketing and collect, process, store, share, disclose, transfer and use consumer information and other data. Our business is affected indirectly as our clients adjust their operations as a result of regulatory changes and enforcement activity within their industries. For example, the FTC has recently started taking a new position (in recent public statements and enforcement actions) regarding the consent rules under the Telemarketing Sales Rule ("TSR"), and the Federal Communications Commission has recently adopted changes to the consent rules under the Telephone Consumer Protection Act of 1991 (“TCPA”). These changes have required, and may in the future require, both us and our Partners to adjust their telemarketing activities. While it is unclear how these changes may ultimately be implemented and/or interpreted, they may have a significant impact on the market for leads, and may require us and our Partners to modify our telemarketing practices and policies. In addition, the California Consumer Privacy Act ("CCPA"), became effective on January 1, 2020 and has been amended by the California Privacy Rights Act ("CPRA"), which became effective January 1, 2023, and a number of other states, including Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Montana, New Jersey, Oregon, Tennessee, Texas, Utah, Virginia, and Washington, have enacted or are considering similar laws, all of which may affect our business. While it is unclear how this new legislation may be modified or how certain provisions will be interpreted, the effects of this legislation are potentially significant, and may require us to modify our data processing practices and policies and incur substantial compliance-related costs and expenses. In addition, we are licensed as a health insurance broker in all 50 states and the District of Columbia, making us subject to certain insurance laws and regulations. Our Medicare business is also subject to Federal rules governing the marketing of such policies. For a description of laws and regulations to which we are generally subject, see Item 1 “Business” and Item 1A “Risk Factors.” in our 2023 Annual Report on Form 10-K.

Current wording

Our revenue and earnings may fluctuate from time to time as a result of federal, state, international and industry-based laws, directives and regulations and developing standards with respect to the enforcement of those regulations. Our business is affected directly because we operate websites, conduct telemarketing and email marketing and collect, process, store, share, disclose, transfer and use consumer information and other data. Our business is affected indirectly as our clients adjust their operations as a result of regulatory changes and enforcement activity within their industries. For example, the FTC has recently started taking a new position (in recent public statements and enforcement actions) regarding the consent rules under the Telemarketing Sales Rule ("TSR"), and the Federal Communications Commission has recently adopted changes to the consent rules under the Telephone Consumer Protection Act of 1991 (“TCPA”). These changes have required, and may in the future require, both us and our Partners to adjust their telemarketing activities. While it is unclear how some of these changes may ultimately be interpreted, they may have a significant impact on the market for leads, and may require us and our Partners to modify our telemarketing practices and policies. In addition, the California Consumer Privacy Act ("CCPA") became effective on January 1, 2020 and has been amended by the California Privacy Rights Act ("CPRA"), which became effective January 1, 2023, and a number of other states, including Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Montana, New Jersey, Oregon, Tennessee, Texas, Utah, Virginia, and Washington, have enacted or are considering similar laws, all of which may affect our business. While it is unclear how this new legislation may be modified or how certain provisions will be interpreted, the effects of this legislation are potentially significant, and may require us to modify our data processing practices and policies and incur substantial compliance-related costs and expenses. In addition, we are licensed as a health insurance broker in all 50 states and the District of Columbia, making us subject to certain insurance laws and regulations. Our Medicare business is also subject to Federal rules governing the marketing of such policies. For a description of laws and regulations to which we are generally subject, see Item 1 “Business” and Item 1A “Risk Factors.” in our 2023 Annual Report on Form 10-K.

Previous wording

MediaAlpha, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from QLH based upon MediaAlpha, Inc.’s economic interest held in QLH. QLH is treated as a pass-through partnership for income tax reporting purposes and is not subject to federal income tax. Instead, QLH’s taxable income or loss is passed through to its members, including MediaAlpha, Inc, pro-rata to their ownership interest in QLH. Accordingly, as our ownership interest in QLH increases, our share of the taxable income (loss) of QLH also increases. As of March 31, 2024, our ownership interest in QLH was 77.2%.

Current wording

MediaAlpha, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from QLH based upon MediaAlpha, Inc.’s economic interest held in QLH. QLH is treated as a pass-through partnership for income tax reporting purposes and is not subject to federal income tax. Instead, QLH’s taxable income or loss is passed through to its members, including MediaAlpha, Inc, pro-rata to their ownership interest in QLH. Accordingly, as our ownership interest in QLH increases, our share of the taxable income (loss) of QLH also increases. As of June 30, 2024, our ownership interest in QLH was 82.5%.

Previous wording

The increase in P&C insurance revenue for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was due to an increase in customer acquisition spending by many of our P&C insurance carrier partners as their underwriting profitability began to improve as a result of lower claims cost inflation and regulatory approval of premium increases. In addition, the first quarter is typically a seasonally strong quarter for the P&C insurance industry. We believe that the hard market cycle the P&C insurance industry has experienced since the second half of 2021 has now turned and a market recovery is underway. While we expect this improvement to continue, driving increases in P&C insurance revenue over the course of 2024, we are currently unable to accurately predict the pace or slope of this recovery, or its impact on our revenue from the P&C insurance vertical or our profitability, beyond the second quarter of 2024.

Current wording

The increase in P&C insurance revenue for the three months ended June 30, 2024, compared with the three months ended June 30, 2023, was due to an increase in customer acquisition spending by multiple P&C insurance carrier partners as they refocus on growth in response to the significant improvement in their underwriting profitability. We believe that the hard market cycle the P&C insurance industry has experienced since the second half of 2021 has now turned and a market recovery is underway. While we expect this improvement to continue, we are currently unable to accurately predict the pace or slope of this recovery, or its impact on our revenue from the P&C insurance vertical or our profitability, beyond the third quarter of 2024.

Previous wording

The increase in health insurance revenue for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was driven by increases in customer acquisition spending in our marketplaces, due primarily to increased demand for leads and calls offset in part by a higher mix of Private Marketplace transactions, where we only recognize our platform fee as revenue.

Current wording

The decrease in health insurance revenue for the three months ended June 30, 2024, compared with the three months ended June 30, 2023, was driven by a lower mix of transaction through our Open Marketplace, which negatively impacted revenue, and by one of our partners ceasing operations during the three months ended June 30, 2024, offset in part by increases in customer acquisition spending in our marketplaces due primarily to increased demand for leads and calls.

Previous wording

The increase in life insurance revenue for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was driven primarily by a greater mix of transactions through our Open Marketplace, which positively impacted revenue.

Current wording

The increase in life insurance revenue for the three months ended June 30, 2024, compared with the three months ended June 30, 2023, was driven by a high mix of transactions through our Open Marketplace, which positively impacted revenue, offset in part by a decrease in customer acquisition spending.

Previous wording

The following table presents our other (income) expense, net for the three months ended March 31, 2024 and 2023, and the dollar and percentage changes between the two periods:

Current wording

The following table presents our other (income), net for the three months ended June 30, 2024 and 2023, and the dollar and percentage changes between the two periods:

Previous wording

The increase in interest expense for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was driven by higher interest rates payable on amounts borrowed under the 2021 Credit Facilities, offset in part by the impact of lower outstanding balances during the current year period.

Current wording

The decrease in interest expense for the three months ended June 30, 2024, compared with the three months ended June 30, 2023, was driven by the impact of lower outstanding balances during 2024, offset in part by a higher interest rate payable on amounts borrowed under the 2021 Credit Facilities.

Previous wording

The decrease in income tax expense for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was immaterial. Our effective tax rate of (1.8)% and (0.5)% for the three months ended March 31, 2024 and 2023, respectively, differed from the U.S. federal statutory rate of 21%, due primarily to the tax impacts of recording a valuation allowance against current year losses, nondeductible equity-based compensation, losses associated with non-controlling interests not taxable to us, state taxes, and other nondeductible permanent items.

Current wording

For the three months ended June 30, 2024, we recorded an income tax expense of $0.1 million resulting from our effective tax rate of 2.9%, which differed from the U.S. federal statutory rate of 21%, due primarily to the tax impacts of changes in our valuation allowance, nondeductible equity-based compensation, losses associated with non-controlling interests not taxable to us, state taxes, and other nondeductible permanent items. For the three months ended June 30, 2023, we recorded an income tax expense of $0.2 million resulting from our effective tax rate of (0.8)%, which differed from the U.S. federal statutory rate of 21%, due primarily to the tax impacts of recording a valuation allowance against current year losses, nondeductible equity-based compensation, losses associated with non-controlling interests not taxable to us, state taxes, and other nondeductible permanent items.

Previous wording

The decrease in other revenue for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was driven primarily by lower revenue from our travel vertical due to a reduced supply of consumer referrals resulting from higher traffic acquisition costs, as well as lower revenue from our consumer finance vertical due to a reduction in mortgage and refinancing activity caused by higher interest rates.

Current wording

The decrease in other revenue for the six months ended June 30, 2024, compared with the six months ended June 30, 2023, was driven by lower revenue from our travel vertical due to a reduced supply of consumer referrals resulting from higher traffic acquisition costs, as well as lower revenue from our consumer finance vertical due to a reduction in mortgage and refinancing activity caused by rising interest rates.

Previous wording

The decrease in sales and marketing expenses for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was due primarily to a decrease in equity-based compensation expense of $0.7 million and a decrease in personnel-related costs of $0.4 million, which were related to lower employee headcount resulting from the reduction-in-force implemented during the second quarter of 2023 ("RIF Plan").

Current wording

The decrease in sales and marketing expenses for the six months ended June 30, 2024, compared with the six months ended June 30, 2023, was due primarily to a decrease in equity-based compensation expense of $1.0 million and a decrease in personnel-related costs of $0.3 million, which were related to lower employee headcount, and a decrease in amortization expense of $0.3 million related to the amortization of intangible assets arising from our acquisition of Customer Helper Team, LLC.

Previous wording

The decrease in product development expenses for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was due primarily to a decrease in equity-based compensation expense of $0.7 million, which was related to lower employee headcount resulting from the RIF Plan.

Current wording

The decrease in product development expenses for the six months ended June 30, 2024, compared with the six months ended June 30, 2023, was due primarily to a decrease in equity-based compensation expense of $1.0 million.

Previous wording

The decrease in general and administrative expenses for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was due primarily to a decrease in equity-based compensation expense of $5.2 million, a decrease in personnel-related costs of $0.5 million, and a $0.3 million reduction in directors & officers insurance premiums, offset in part by a $1.2 million increase in legal costs associated primarily with the civil investigative demand received from the Federal Trade Commission (FTC) in February 2023.

Current wording

The decrease in general and administrative expenses for the six months ended June 30, 2024, compared with the six months ended June 30, 2023, was due primarily to a decrease in equity-based compensation expense of $9.9 million, a decrease in personnel-related costs of $0.7 million related primarily to lower employee headcount, and a $0.5 million reduction in directors and officers insurance premiums. This decrease was offset in part by a $1.2 million increase in legal costs for the six months ended June 30, 2024, associated primarily with the civil investigative demand from the Federal Trade Commission and secondary offerings of our shares.

Previous wording

The decrease in equity-based compensation expense for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was driven primarily by lower employee headcount, resulting primarily from the RIF Plan, offset in part by higher expenses related to annual awards of RSUs granted to employees. The decrease was also due in part to the expense in the 2023 period associated with the RSUs granted at the time of the IPO, substantially all of which were fully vested as of December 31, 2023. The increase in equity-based compensation expense recorded within cost of revenue for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was driven primarily due to acceleration of RSUs vesting for certain terminated employees during the three months ended March 31, 2024.

Current wording

The decrease in equity-based compensation expense for the six months ended June 30, 2024, compared with the six months ended June 30, 2023, due primarily to certain RSUs granted to key employees at IPO being fully vested as of December 31, 2023, and to lower employee headcount, offset in part by expenses related to annual awards of RSUs granted to employees during the three months ended March 31, 2024. The increase in equity-based compensation expense recorded within cost of revenue for the six months ended June 30, 2024, compared with the six months ended June 30, 2023, was due primarily to acceleration of vesting of RSUs held by certain terminated employees during the six months ended June 30, 2024.

Previous wording

The decrease in other (income) expense, net for the three months ended March 31, 2024, compared with the three months ended March 31, 2023, was driven primarily by an impairment charge of $1.4 million during the three months ended March 31, 2023 related to our cost method investment.

Current wording

The increase in other (income) expense, net for the six months ended June 30, 2024, compared with the six months ended June 30, 2023, was driven primarily by a one-time contract termination fee of $1.7 million receivable from one of our partners in the Health and Life vertical that ceased operations during the three months ended June 30, 2024 and an impairment charge of $1.4 million during the six months ended June 30, 2023 related to a cost method investment that did not recur in the current year period.

Previous wording

The following table reconciles Adjusted EBITDA with net (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended March 31, 2024 and 2023:

Current wording

The following table reconciles Adjusted EBITDA with net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three and six months ended June 30, 2024 and 2023:

Previous wording

(1)Transaction expenses consist of $0.7 million and $0.3 million of legal and accounting fees incurred by us for the three months ended March 31, 2024 and 2023, respectively, in connection with resale registration statements filed with the SEC.

Current wording

(1)Transaction expenses consist of $0.6 million and $1.2 million of legal and accounting fees incurred by us for the three and six months ended June 30, 2024, respectively, in connection with resale registration statements filed with the SEC. For the three and six months ended June 30, 2023, transaction expenses consist of $0.3 million and $0.5 million of expenses, respectively, in connection with the amendment to the 2021 Credit Facilities, the tender offer filed by the Company's largest shareholder in May 2023, and a resale registration statement filed with the SEC.

Previous wording

(2)Legal expenses of $1.1 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively, consist of legal fees incurred in connection with the civil investigative demand received from the FTC in February 2023.

Current wording

(3)Legal expenses of $0.7 million and $1.8 million for the three and six months ended June 30, 2024, respectively, and $1.1 million and $1.4 million for the three and six months ended June 30, 2023, respectively, consist of legal fees incurred in connection with the civil investigative demand received from the Federal Trade Commission in February 2023.

Previous wording

The following table reconciles Contribution with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended March 31, 2024 and 2023:

Current wording

The following table reconciles Contribution with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three and six months ended June 30, 2024 and 2023:

Previous wording

The following table presents Transaction Value by platform model for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents Transaction Value by platform model for the three and six months ended June 30, 2024 and 2023:

Previous wording

The following table presents Transaction Value by vertical for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents Transaction Value by vertical for the three and six months ended June 30, 2024 and 2023:

Previous wording

The following table presents the percentages of total Transaction Value generated from clicks, calls and leads for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents the percentages of total Transaction Value generated from clicks, calls and leads for the three and six months ended June 30, 2024 and 2023:

Previous wording

Our principal sources of liquidity are our cash flows generated from operations and cash and funds available under the 2021 Revolving Credit Facility. Our principal uses of cash include funding of our operations, interest payments, and mandatory principal payments on our long-term debt. As of March 31, 2024 and December 31, 2023, our cash and cash equivalents totaled $14.5 million and $17.3 million, respectively. As of March 31, 2024, the aggregate principal amount outstanding under the 2021 Term Loan Facility was $168.6 million and our borrowing capacity available under the 2021 Revolving Credit Facility was $45.0 million.

Current wording

Our principal sources of liquidity are our cash flows generated from operations and cash and funds available under the 2021 Revolving Credit Facility. Our principal uses of cash include funding of our operations, interest payments, and mandatory principal payments on our long-term debt. As of June 30, 2024 and December 31, 2023, our cash and cash equivalents totaled $28.7 million and $17.3 million, respectively. As of June 30, 2024, the aggregate principal amount outstanding under the 2021

Previous wording

Our business is seasonal and cyclical in nature and these trends, if continued for a long period of time, could impact the cash flows generated from operations, requiring us to draw on our available borrowing capacity under the 2021 Revolving Credit Facility or raise additional funds in the short term. During the second half of 2021, the auto insurance industry began to experience a cyclical downturn, as supply chain disruptions and cost increases caused by the pandemic and overall inflationary pressures contributed to higher-than-expected P&C insurance claims costs, which led many carriers to reduce their customer acquisition spending to preserve their profitability. However, we believe that the hard market cycle has now turned and a market recovery is underway as certain of our key carrier partners increased their customer acquisition spend during the first quarter of 2024. While we expect this improvement to continue over the course of 2024, we are currently unable to accurately predict the pace or slope of this recovery beyond the second quarter of 2024.

Current wording

Our business is seasonal and cyclical in nature and these trends, if continued for a long period of time, could impact the cash flows generated from operations, requiring us to draw on our available borrowing capacity under the 2021 Revolving Credit Facility or raise additional funds in the short term. During the second half of 2021, the auto insurance industry began to experience a cyclical downturn, as supply chain disruptions and cost increases caused by the pandemic and overall inflationary pressures contributed to higher-than-expected P&C insurance claims costs, which led many carriers to reduce their customer acquisition spending to preserve their profitability. However, we believe that the hard market cycle has now turned and a market recovery is underway as a number of our key carrier partners have meaningfully increased their customer acquisition spending during the first half of 2024. While we expect this improvement to continue, we are currently unable to accurately predict the pace or slope of this recovery beyond the third quarter of 2024.

Previous wording

The following table presents a summary of our cash flows for the three months ended March 31, 2024 and 2023, and the dollar and percentage changes between the periods:

Current wording

The following table presents a summary of our cash flows for the six months ended June 30, 2024 and 2023, and the dollar and percentage changes between the periods:

Previous wording

Cash flows provided by operating activities were $1.7 million for the three months ended March 31, 2024, compared with $12.6 million for the three months ended March 31, 2023. The decrease was due primarily to an increase in net working capital due to the timing of payments of our accounts payable and accounts receivable, offset in part by the lower net loss, excluding the impact of non-cash items.

Current wording

Cash flows provided by operating activities were $23.3 million for the six months ended June 30, 2024, compared with $16.3 million for the six months ended June 30, 2023. The increase was due primarily to the lower net loss and an increase in net working capital due to the increase in our accounts receivable as a result of higher revenue and the timing of payments of our accounts payable.

Previous wording

Cash flows used in investing activities were immaterial for the three months ended March 31, 2024 and 2023.

Current wording

Cash flows used in investing activities were immaterial for the six months ended June 30, 2024 and 2023.

Previous wording

Cash flows used in financing activities were $4.4 million for the three months ended March 31, 2024, compared with $7.5 million for the three months ended March 31, 2023. The decrease was due primarily to higher payments made pursuant to the TRA and distributions to non-controlling interests during the three months ended March 31, 2023.

Current wording

Cash flows used in financing activities were $11.7 million for the six months ended June 30, 2024, compared with $10.8 million for the six months ended June 30, 2023. The increase was due primarily to a required Excess Cash Flow principal payment on the 2021 Term Loan Facility during the six months ended June 30, 2024, offset in part by higher payments made pursuant to the TRA and distributions to non-controlling interests during the six months ended June 30, 2023.

Previous wording

Loans under the 2021 Credit Facilities will mature on July 29, 2026. Loans under the 2021 Term Loan Facility amortize quarterly, beginning with the first business day after December 31, 2021 and ending with June 30, 2026, by an amount equal to 1.25% of the aggregate outstanding principal amount of the term loans initially made. In addition, the 2021 Term Loan Facility also requires mandatory prepayments of principal in the amount of any Excess Cash Flow (as defined in the Amended

Current wording

Loans under the 2021 Credit Facilities will mature on July 29, 2026. Loans under the 2021 Term Loan Facility amortize quarterly, beginning with the first business day after December 31, 2021 and ending with June 30, 2026, by an amount equal to 1.25% of the aggregate outstanding principal amount of the term loans initially made. In addition, the 2021 Term Loan Facility also requires mandatory prepayments of principal in the amount of any Excess Cash Flow (as defined in the Amended Credit Agreement) on an annual basis. We generated Excess Cash Flow for the year ended December 31, 2023, and prepaid approximately $3.0 million of the principal under the 2021 Term Loan Facility during the three months ended June 30, 2024. The 2021 Revolving Credit Facility does not require amortization of principal and will mature on July 29, 2026.

Previous wording

As of March 31, 2024, we had $167.1 million of outstanding borrowings, net of deferred debt issuance costs of $1.5 million, under the 2021 Term Loan Facility, and $5.0 million of borrowings outstanding under the 2021 Revolving Credit Facility.

Current wording

As of June 30, 2024, we had $161.9 million of outstanding borrowings, net of deferred debt issuance costs of $1.4 million, under the 2021 Term Loan Facility, and $5.0 million of borrowings outstanding under the 2021 Revolving Credit Facility.

Previous wording

Our critical accounting policies and estimates are included in our 2023 Annual Report on Form 10-K and did not materially change during the three months ended March 31, 2024.

Current wording

Our critical accounting policies and estimates are included in our 2023 Annual Report on Form 10-K and did not materially change during the six months ended June 30, 2024.