Thank you, Josh. After the market closed today, MediaAlpha issued a press release and shareholder letter announcing results for the second quarter ended June 30, 2023. These documents are available in the Investors section of our website, and we will be referring to them on this call. Our discussion today will include forward-looking statements about our business and our outlook for future financial results, including our financial guidance for the third quarter of 2023, which are based on assumptions, forecasts, expectations and information currently available to management. These forward-looking statements are subject to risks and uncertainties that could cause future results or events to differ materially from those reflected in those statements. Please refer to the company’s SEC filings, including its Annual Report on Form 10-K and its quarterly reports on Form 10-Q for a fuller explanation of those risks and uncertainties and the limits applicable to forward-looking statements. These forward-looking statements are based on assumptions as of today, August 2, 2023, and the company undertakes no obligation to revise or update them. In addition, on today’s call, we will be referring to certain actual and projected financial metrics of MediaAlpha that are presented on a non-GAAP basis, including adjusted EBITDA, which we present in order to supplement your understanding and assessment of our financial performance. Non-GAAP measures should not be considered as a substitute for or superior to financial measures calculated in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our press release and shareholder letter issued today. Finally, I’d like to remind everyone that this call is being recorded and will be made available for replay via a link on the Investors section of the company’s website at investors.mediaalpha.com. Now, I’ll turn the call over to Steve and Pat for a few introductory remarks before opening the call to your questions.

Thanks, Denise. Hi everyone. Welcome to our second quarter earnings call. I'd like to make a few observations before turning the call over to our CFO, Pat Thompson for his comments. Our second quarter results exceeded guidance due to stronger than anticipated growth in our health insurance vertical. Our health transaction value grew 10% year-over-year, driven by broad-based strength in both under 65 and Medicare segments, resulting in better-than-expected margins and adjusted EBITDA. These trends have continued into the third quarter and we expect Q3 health transaction value to grow year-over-year at a rate similar to what we saw in the second quarter leading up to the all-important annual and open enrollment periods from Medicare and under 65 plans respectively. Q2 results in our P&C insurance verticals were in line with our expectations as our largest P&C carrier partner sharply reduced spend in our marketplace due to continued underwriting profitability concerns. We're projecting this major carrier spend to remain depressed through the end of the year, and as a result, we expect P&C transaction value in Q3 to be lower than what we saw in Q2. Taking a step back, I remain pleased by our resiliency through the historic P&C market downturn. Due to our capital efficient marketplace model, diversified industry vertical exposure, and most importantly, the extraordinary dedication of our team, we've been able to generate a positive adjusted EBITDA and free cash flow through the entirety of this hard market cycle. Looking ahead, we believe these attributes will lead to strong top and bottom line growth once our P&C carrier partners resume normal levels of marketing spend coming out of the hard market.

Thanks, Steve. I'll begin with a few comments on our second quarter financial results and other recent business and market developments. Before reviewing our third quarter financial guidance and opening the call up for questions. Our second quarter results benefited from top line outperformance in our health vertical due to the broad-based strength Steve discussed earlier. This drove especially strong adjusted EBITDA performance in Q2 relative to our guidance range as our health vertical margins benefit from a higher open marketplace mix. As we discussed in our shareholder letter during the second quarter, our largest shareholder, White Mountains Group, completed a tender offer for 5.9 million Class A shares increasing their ownership position to 36% of our total outstanding shares. The White Mountains tender offer at $10 per share represented a 32% premium to the closing price of our stock the day before the announcement. White Mountains publicly stated they believe our shares are an attractive investment and they have no intention of changing the relationship between our companies. Moving to third quarter guidance. We expect P&C transaction value to decline 40% to 50% year-over-year due to a full quarter of the reduced spend by our largest P&C carrier partner. In health, we expect favorable trends across the business to drive year-over-year transaction value growth at a rate similar to the 10% we saw in the second quarter. We expect improving year-over-year trends in our other vertical as we lap the exit of our Education business at the start of Q3 2022. As a result, we expect Q3 transaction value to be between $95 million and $110 million, a year-over-year decrease of 30% at the midpoint. We expect revenue to be between $65 million and $75 million, a year-over-year decrease of 1% at the midpoint. Lastly, we expect adjusted EBITDA to be between $1.5 million and $3.5 million, a year-over-year increase of 15% at the midpoint. Q3 operating expenses after adjusted EBITDA add-backs are expected to be approximately $1.5 million lower than Q2 levels driven by both a full quarter’s impact of the May workforce reduction and continued expense discipline. Moving to other noteworthy items. During Q2 we incurred approximately $1 million of fees related to the ongoing FTC inquiry, and we expect to incur a similar amount in Q3. We continue to believe we have been and remain fully compliant with all laws and regulations, and we are cooperating with the FTC as they continue their inquiry. In addition, we have amended our Founder’s employment agreements at their request to provide for roughly 90% of Steve and Eugene’s salaries to be paid in restricted stock rather than cash, representing an approximately $1 million annual benefit to adjusted EBITDA. This amendment reflects our Founders’ belief that our stock represents an attractive investment given the long-term growth potential of our business. Turning to the balance sheet and cash flow. We generated $3.8 million of free cash flow during the quarter and ended the quarter with $20 million of cash on hand. In the near-term, our first priority for cash flow is to decrease net debt. We are focused on reducing financial leverage through a combination of net debt reduction and adjusted EBITDA improvement driven by strong execution in our ongoing efforts to tightly manage expenses as we await the inevitable rebound in our P&C vertical.

Thanks for the question. Steve, in the shareholder letter you mentioned you remain bullish on Medicare Advantage growth over the long term. In recent months, we’ve seen a number of your competitors exit the space, so maybe two questions. First, what are you seeing that makes you optimistic in an area where others seem to be throwing in the towel? And then second, any update on your interpretation of the potential impact from the Medicare Advantage policy changes? Thank you.

Sure. Yes, to answer the first part of your question, I think really the difference in perspective is entirely due to the different business model that we have. When you look at the health insurance business that Evercore has and that LendingTree has, unlike their P&C business, which is similar to ours and that it’s media-driven, their health insurance businesses were both entirely or almost entirely based on a direct and consumer agency model where they’re selling policies directly to consumers. Now, I think the issues with that business model have been well documented. Among which it’s a very capital-intensive business because you incur the upfront customer acquisition costs, which you then expect to recoup over the lifetime of that policy as they renew over a several year period. And so for us, we have a media marketplace model where the revenues from the clicks, leads, and calls that are transacted in our marketplace hit in the current period, translating into both EBITDA and cash in the current period. And so, I think really their views on the Medicare Advantage market and that opportunity really is from their perspective as brokers and agents, and not from their position as a media marketplace. Does that make sense, Cory?

Yes. That’s helpful on the first part.

Okay. The second part now, just to clarify, were you talking about the new CMS marketing regulations?

Yes. I think the last time we talked, you expected minimal impact perhaps the outbound needs, but we're still kind of – interpretation was potentially still could change, but that was – I think that was your latest thinking.

Yes. I think, yes, absolutely you’re recalling correctly that we were optimistic about it then. I think we actually are even more optimistic about it now because a few things have happened since that period. First of all, when the final regulations came out in April, one of the prohibitions in the draft regulations that restricted the ability of one third-party marketing organization to sell marketing leads to another third-party marketing organization was removed from the final regulations. And so that was one piece of good news. And then subsequent to that, we’ve had our positive interpretations namely the applicability or the non-applicability of the 48 hour waiting period to inbound calls, and so that’s also been clarified by CMS. And so, for us, because calls are an important part of our overall marketplace, that was certainly good news. And I think if you are listening to the sentiment from the broker channel in particular, I think they’re echoing some of the positive sentiments about the limited impact that they expect to see from these new CMS marketing regulations in the upcoming enrollment period.

Thanks for your answer.

And Cory, probably the one thing I would add on that is, I think there is still a bit of uncertainty around leads and kind of outbound dialing and whether the 48 hour rule is applicable for that. The thing I would say is that leads for us in the Medicare space are a very small portion of our overall business, and so we’re still waiting on clarification of that and we’ll see how it shakes out, but it shouldn’t have a big impact on us either way.

Okay. Thank you both.

Thanks, Cory.

Hey guys, thank you. I just wanted to ask about the P&C vertical. I know you mentioned you felt it was going to be weak for the balance of the year. And I just wanted to ask if you had any reason for optimism for the beginning of next year. Is there anything going on just maybe a little more color there? And then, related to that, I just wanted to see if you could share anything about how this downturn is impacting your ability or your focus on product development and innovation. Is it giving you more time to kind of get ready for the upturn or are you resource constrained, I guess, and maybe not able to kind of invest as much as you want? Just would be interested in how you’re kind of handling this from a long-term planning perspective?

Yes, absolutely. So I think there’s a relatively short answer to the first question, which is not much has changed with regard to our sentiment since the last time we talked. I think as you’re seeing, and I’ll just echo this, right, which is it just continues to be a really challenging underwriting environment. I mean, you’re seeing some good signs used car pricing, for example, has stabilized. You’re seeing some of the states that were slow to approve rates now approving larger rate increases. For example, I think you just saw that Allstate has filed for a 35% increase in California. And so you’re starting to see some good signs, but overall, as you’ve been seeing from actually a lot of the carriers releases that happened today, as well as the monthly reports that have been coming out over the last few months, that the underwriting environment or the claim cost inflation has remained persistently high. So really no amendment to our perspective on when the broad-based recovery of the P&C market will happen. Certainly I don’t – we don’t think it’s going to happen this year. And so now pivoting to the second part of your question, it’s a great question. I think that overall the carriers that focus on efficiency have enabled us to really make headway with a lot of product development efforts to extract greater efficiency from this channel. And so, one obvious example is working with our carrier partners who are buyers who also then monetize non-converting traffic. And so in a time like this, when every marketing dollar matters, right, I think that there’s been great adoption or strong adoption on the part of carriers to actually this advertising program to help recoup the money that they’re spending to get customers to their site. And so, that’s not necessarily innovation, that’s just certainly an adoption of an innovative business model that we’ve had since our inception. But what it signals is that the carriers are very open to ideas to expect greater efficiencies from their marketing. And that makes it a ripe environment for us to be able to innovate and iterate with the partners to create new products, new implementations, et cetera, so that we can extract greater efficiencies going into the soft market period. And so overall, because our innovation is also based on just iterative approaches with our partners, right, and not one big initiative that we invest a lot of money into, it’s just not something that’s required in our space. What we’ve done is we’ve been able to retain the capabilities to maintain this kind of innovation. And again, it’s been in that positive in terms of the carrier’s receptivity to these new ideas and to iterate with us to come up with new ways to do things in this space.

All right, great. Thanks for all the color, Steve.

No. Thanks Michael.

Hey, this is Luis on for Daniel Grosslight. Just had a quick question on, do you have any update on how Medicaid redeterminations have impacted your health business? Thank you.

Yes. So Medicare redeterminations and impact on the health business, the thing I would say is that I think some of the redeterminations there’s been a series of back and forth around that. Would say that I think the numbers probably shook out on the higher side of what was being discussed, which was I think generally positive for us. And I think that the thing we would say on the Medicare piece is that these are fundamentally programs that are really attractive. The carriers like the business because there's a lot of premium dollars there, and they make money off of it. And I think in the redetermination range, they're feeling good about it. They're a win from a consumer standpoint because you've got zero premiums in certain cases, zero co-pays, great formularies. And it's a market that we have really helped kind of come online in terms of marketing. And it's a product that has 50% adoption. That adoption is going to be continuing to go up into the right. And we feel like it's a pretty attractive place to play over the intermediate to long-term. And we're pretty bullish on what it could look like in the years to come.

Thank you.

Did that answer your question, Luis?

Yes.

Great.

Thanks. A question I guess coming from, because they talked a little bit today about some regions or maybe some sub-sectors of policyholders where they think that they're adequately priced. When we look to your third quarter back half guidance, does that contemplate any sort of partial recovery? I know, Steve, you talked about a broad recovery, not likely.

Yes. And Meyer, this is Pat. I can tackle that question and would say that as we look at the landscape of spend on P&C, the largest carrier spent a lot in Q1, cut through a lot of Q2, and would say the trends have been probably reasonably stable for a couple of months with them. The bucket of everybody else has been kind of pretty stable since the start of the year. And we get positive news out of some and negative news out of others, but there is – the puts and takes have been pretty balanced and wouldn't be surprised if there are some carriers that go, hey, we've taken enough rate and we feel good about this state, or we feel good about premium customers, or hey, people that are homeowners, we want to lean in a bit on it. And there are others that may be trying to buoy short-term profitability through reductions. And so, would say our guidance, we typically guide to what we have a high degree of confidence in. And so that's this quarter and we know the trends we've been seeing for a while. And we probably say generally expect those to kind of continue for the balance of the quarter.

Okay. That's helpful. Go ahead, please.

I'll just add one thing, which is that we do, and I think we mentioned this before, I mean with just how extraordinary this hard market cycle's been, I think you're going to need to see an improvement in the overall combined ratio as these rate increases are and through, before carriers like Allstate really lean into those profitable pockets just because whether you're in a hard market or a soft market, new policies do tend to perform slightly worse than existing policies and to incur that new policy or growth tax, I think that there isn't a ton of appetite to do that while their overall results are where they're.

Yes, no, that makes perfect sense. Looking forward, should we assume that free cash flow on a quarterly or annual basis is a good proxy for debt reduction?

Yes, and Meyer, this is Pat. I would say, in the near to medium term, it will be, and I think we are in a spot where we are focused on putting the free cash flow towards net debt reduction. And that could either be building our cash balance, paying the revolver, or starting to chip away at the term loan beyond the mandatory amortization. And so, I think we're in a spot where that'll be the focus and to the extent that changes will be, I'll be communicating it at quarterly results at some point in the future.

Okay. Perfect. Thanks so much.

Thanks Meyer.

Thank you very much. Hey, guys. We heard from Humana this morning reiterate expectations for an active shopping environment for AEP. And as we get into closer to AEP prep, is there any call out you can make or any change in behavior among your partners in preparation for AEP this year that, just in terms of just general changes in behavior or spending for MA?

Yes, I mean, I think we'll have a better idea of this in Q3 because that's when the actual budget discussions happen, both with carriers and with the brokers. So I think overall, I think the sentiment has been generally positive. Certainly there's been some headwinds with higher than expected utilization rates, right. But there's also been some tailwinds or positive news, namely the applicability and the potential for impact of the new CMS marketing regulations. So I would say overall, what we're hearing from our partners is generally positive. I think overall, the trend towards there being a heavier mix of carrier demand partners and dollars from carriers versus brokers we continue – we expect to see that trend continue. But in terms of just more specificity into how that sentiment, like the sentiment you mentioned today from the Humana quarterly earnings call, will translate into budgets for the upcoming AEP and OEP, I think we'll have more clarity into that in Q3.

Got you. Thank you. And then finally just with, it seems like you've got some pretty significant platform changes with some cost savings and guidance. And then also we've got the White Mountains stake could this foreshadow any broader platform or strategic shifts that we could think about longer term in the future? Thanks.

Yes, and Ben, this is Pat and would say that the short answer to that question is no. Where I think we've – we've been a growth company in the past. We've been – we've suffered at the hands of this hard market along with pretty much everybody in the P&C space. We are extremely bullish about the long-term prospects for the industry and particularly, for our business. And I think we obviously tightened our belts to try to buoy results in this tough environment, but we believe the innovation engine and the delivery engine are untouched. And we continue operating the business efficiently and effectively. We're really excited to see what we think we can deliver as the market improves. Quite frankly, I think it's going to be an awful lot of fun to be a part of. And we're really bullish about the long-term future of the business. And I think White Mountains as an investor, we've been on the journey together for about 10 years, and they are value-driven and long-term focused just like we are. And we take their investment as a sign of faith and confidence that good times are to come. And our goal is to repay their faith and all the investors' faith in the years to come as the market recovers.

Great. Thanks guys. I appreciate the color.

Excellent. Thanks, Ben.

There are no further questions. This does conclude today's conference call. Thank you very much for joining.