Mediaalpha Inc (MAX) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to MediaAlpha's Q2 2023 Earnings Call. (Operator Instructions) Thank you.

女士們、先生們，感謝大家的支持，歡迎參加 MediaAlpha 的 2023 年第二季度財報電話會議。 （操作員說明）謝謝。

Denise Garcia, Investor Relations. You may begin your conference.

丹尼斯·加西亞，投資者關係。您可以開始您的會議了。

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.

謝謝你，喬什。今天收盤後，MediaAlpha 發布了一份新聞稿和股東信函，宣布截至2023 年6 月30 日的第二季度業績。這些文件可在我們網站的投資者部分找到，我們將在本次電話會議上提及它們。

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.

我們今天的討論將包括有關我們業務的前瞻性陳述以及我們對未來財務業績的展望，包括我們對 2023 年第三季度的財務指引，這些指引基於管理層目前掌握的假設、預測、預期和信息。這些前瞻性陳述存在風險和不確定性，可能導致未來結果或事件與這些陳述中反映的結果或事件存在重大差異。

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.

請參閱該公司向 SEC 提交的文件，包括 10-K 表中的年度報告和 10-Q 表中的季度報告，以更全面地解釋這些風險和不確定性以及適用於前瞻性陳述的限制。這些前瞻性陳述基於截至今天（2023 年 8 月 2 日）的假設，公司不承擔修改或更新這些陳述的義務。

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.

此外，在今天的電話會議上，我們將提及MediaAlpha 在非GAAP 基礎上提供的某些實際和預測財務指標，包括調整後的EBITDA，我們提供這些指標是為了補充您對我們財務業績的理解和評估。

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.

非公認會計原則措施不應被視為替代或優於根據公認會計原則計算的財務措施。這些非公認會計準則衡量標準與最直接可比的公認會計準則衡量標準的調節包含在我們今天發布的新聞稿和股東信中。

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.

最後，我想提醒大家，本次電話會議正在錄音，並將通過公司網站 Investors 部分的鏈接進行重播，網址為 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.

現在，我將把電話轉給史蒂夫和帕特，讓他們做一些介紹性發言，然後再開始回答你們的問題。

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.

謝謝，丹妮絲。大家好。歡迎參加我們的第二季度財報電話會議。在將電話轉給我們的首席財務官帕特·湯普森徵求意見之前，我想先發表一些意見。

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 Medicare segments resulting in better-than-expected margins and adjusted EBITDA.

由於健康保險垂直領域的增長強於預期，我們第二季度的業績超出了預期。我們的健康交易價值同比增長 10%，這得益於 65 個醫療保險細分市場的廣泛實力，導致利潤率和調整後 EBITDA 好於預期。

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 for Medicare and under 65 plans, respectively.

這些趨勢一直持續到第三季度，我們預計第三季度健康交易價值將以與我們在第二季度看到的類似的速度同比增長，直到醫療保險和醫療保險的最重要的年度和開放註冊期。分別根據65 個計劃。

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.

我們的財產和意外傷害保險行業第二季度的業績符合我們的預期，因為我們最大的財產和意外傷害承運人合作夥伴由於持續的承保盈利能力擔憂而大幅減少了在我們市場的支出。我們預計這一主要運營商的支出將在今年年底前保持低迷狀態。因此，我們預計第三季度的財產險交易額將低於第二季度。

Taking a step back, I remain pleased by our resiliency through this 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.

退一步說，我對我們在這次歷史性財產與意外傷害市場低迷時期的韌性感到滿意。由於我們資本效率高的市場模式、多元化的行業垂直曝光以及最重要的是我們團隊的非凡奉獻，我們能夠在整個艱難的市場週期中產生積極的調整後 EBITDA 和自由現金流。展望未來，我們相信，一旦我們的財產與意外傷害承運商合作夥伴從硬市場中恢復正常的營銷支出水平，這些屬性將帶來強勁的收入和利潤增長。

With that, I'll turn the call over to Pat.

這樣，我就把電話轉給帕特。

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.

謝謝，史蒂夫。在回顧我們的第三季度財務指引並開始提問之前，我將首先對我們第二季度的財務業績以及其他近期業務和市場發展發表一些評論。

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.

我們第二季度的業績得益於我們健康垂直領域的出色表現，這得益於史蒂夫之前討論過的廣泛優勢。相對於我們的指導範圍，這推動了第二季度調整後 EBITDA 表現尤其強勁，因為我們的健康垂直利潤受益於更高的開放市場組合。

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.

正如我們在股東信中討論的那樣，第二季度，我們的最大股東 White Mountains Group 完成了對 590 萬股 A 類股的要約收購，將其所有權地位增加到我們已發行股份總數的 36%。

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.

White Mountains 的收購要約價格為每股 10 美元，較公告前一天我們股票的收盤價溢價 32%。白山公開表示，他們相信我們的股票是一項有吸引力的投資，並且無意改變我們公司之間的關係。

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.

轉向第三季度指導。由於我們最大的財產險承運商合作夥伴整整一個季度的支出減少，我們預計財產險交易額將同比下降 40% 至 50%。在健康領域，我們預計整個業務的有利趨勢將推動交易價值同比增長，增長率與第二季度的 10% 類似。隨著我們在 2022 年第三季度初退出教育業務，我們預計其他垂直領域的同比趨勢將有所改善。

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 21% at the midpoint.

因此，我們預計第三季度交易額將在 9500 萬美元至 1.1 億美元之間，同比中值下降 30%。我們預計收入將在 6500 萬美元至 7500 萬美元之間，中值同比下降 21%。

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.

最後，我們預計調整後 EBITDA 將在 150 萬美元至 350 萬美元之間，中值同比增長 15%。調整後的 EBITDA 加回後的第三季度運營費用預計將比第二季度水平低約 150 萬美元，這是由於 5 月份裁員對整個季度的影響以及持續的費用紀律的推動。

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.

轉向其他值得注意的項目。在第二季度，我們因正在進行的 FTC 調查而產生了大約 100 萬美元的費用，我們預計在第三季度也會產生類似的費用。我們仍然相信我們已經並將繼續完全遵守所有法律和法規，並且我們正在配合聯邦貿易委員會繼續調查。

In addition, we have amended our founders' 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.

此外，我們還根據創始人的要求修改了他們的僱傭協議，規定Steve 和Eugene 大約90% 的工資將以限制性股票而非現金的形式支付，這意味著每年調整後的EBITDA 收益約為100 萬美元。這一修正案反映了我們創始人的信念，即考慮到我們業務的長期增長潛力，我們的股票是一項有吸引力的投資。

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.

轉向資產負債表和現金流量。本季度我們產生了 380 萬美元的自由現金流，季度末手頭現金為 2000 萬美元。短期內，我們現金流的首要任務是減少淨債務。

We are focused on reducing financial leverage through a combination of net debt reduction and adjusted EBITDA improvement, driven by strong execution and our ongoing efforts to tightly manage expenses as we await the inevitable rebound in our P&C vertical.

我們專注於通過淨債務削減和調整後的 EBITDA 改善相結合來降低財務槓桿，在強大的執行力和我們持續努力嚴格管理費用的推動下，我們正在等待財產和意外險行業不可避免的反彈。

With that, operator, we are ready for the first question.

至此，操作員，我們準備好回答第一個問題了。

(Operator Instructions) Your first question comes from the line of Cory Carpenter with JPMorgan.

（操作員說明）您的第一個問題來自摩根大通的 Cory Carpenter。

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.

史蒂夫，在股東信中，您提到您仍然看好 Medicare Advantage 的長期增長。近幾個月來，我們看到許多競爭對手退出了該領域。

So maybe two questions. First, what are you seeing that makes you optimistic in an area where others seem to be (inaudible)? And then second, any update on your interpretation of the potential impact from the Medicare Advantage policy changes?

所以也許有兩個問題。首先，您看到什麼讓您在其他人似乎（聽不清）的領域保持樂觀？其次，您對 Medicare Advantage 政策變化的潛在影響的解釋有何更新？

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 EverQuote had and that LendingTree had, unlike their P&C business which is similar to ours and that is media-driven, their health insurance businesses were both entirely or almost entirely based on a direct-to-consumer agency model where they're selling policies directly to consumers.

當然。是的，回答你問題的第一部分，我認為觀點的差異完全是由於我們擁有不同的商業模式。當你看看 EverQuote 和 LendingTree 的健康保險業務時，與我們類似且由媒體驅動的財產和意外傷害業務不同，他們的健康保險業務完全或幾乎完全基於直接面向消費者的業務他們直接向消費​​者銷售保單的代理模式。

Now I think -- the issues with that business model, I think, has been well documented, among which it's a very capital-intensive business because you incur the upfront customer acquisition cost which you then expect to recoup over the lifetime of that policy as they renew over a several year period.

現在我認為- 我認為該業務模式的問題已得到充分記錄，其中它是一項資本密集型業務，因為您承擔了前期客戶獲取成本，然後您希望在該保單的生命週期內收回該成本，如下所示它們會在幾年內更新。

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 translate 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 the media marketplace. Does that make sense, Cory?

因此，對我們來說，我們有一個媒體市場模型，其中當期在我們的市場中交易的點擊、潛在客戶和來電產生的收入轉化為當期的 EBITDA 和現金。因此，我認為，他們對醫療保險優勢市場和機會的看法實際上是從他們作為經紀人和代理人的角度出發的，而不是從他們作為媒體市場的立場出發的。這有道理嗎，科里？

Yes, that's helpful on the first part.

是的，這對第一部分很有幫助。

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

好的。第二部分——現在澄清一下，您是在談論新的 CMS 營銷法規嗎？

Yes. I think -- and the last time we talked, you expected minimal impact, perhaps the outbound leads, but we're still kind of -- interpretation was potentially still to change. But I think that was your...

是的。我認為——上次我們談話時，你預計影響很小，也許是出站線索，但我們仍然認為——解釋可能仍會改變。但我想那是你的...

Yes, absolutely and I think -- yes, I think yes. So absolutely, you're recalling correctly that we were optimistic about it then. I think we actually are even more optimistic about it now. But a few things have happened since that period.

是的，絕對是的，我認為——是的，我認為是的。所以絕對，你正確地記得我們當時對此持樂觀態度。我認為我們現在實際上對此更加樂觀。但自那段時間以來發生了一些事情。

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.

首先，當4月份最終條例出台時，條例草案中限制一個第三方營銷組織銷售營銷能力的禁令之一，導致了另一個第三方營銷組織的銷售能力。

And based on the definition of a TTMO, which basically meant anyone who's not an insurance carrier, that would have restricted some of the activities in our overall channel, namely selling leads to brokers or selling leads to other lead generators. And so that prohibition was actually removed from the final regulations, and so that was one piece of good news.

根據 TTMO 的定義，這基本上意味著不是保險公司的任何人，這將限制我們整個渠道中的一些活動，即向經紀人銷售線索或向其他線索生成者銷售線索。因此，該禁令實際上已從最終法規中刪除，這是一個好消息。

And then subsequent to that, we've had our positive interpretation, namely the applicability or the nonapplicability of the 48-hour waiting period to inbound calls. And so that's also been clarified by CMS.

接下來我們就有了積極的解讀，即48小時等待期對於呼入電話是否適用。 CMS 也對此進行了澄清。

And so for us, I mean 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 seeing -- 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.

對我們來說，我的意思是，因為電話是我們整個市場的重要組成部分，這當然是個好消息。我認為，如果您特別聆聽經紀商渠道的情緒，我認為他們正在呼應一些積極情緒，即他們期望從這些新的 CMS 營銷法規中看到的有限影響。即將到來的招生期。

And Cory, (inaudible) 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.

Cory，（聽不清）我要補充的一件事是，我認為潛在客戶和出站撥號以及 48 小時規則是否適用方面仍然存在一些不確定性。

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.

我想說的是，醫療保險領域的銷售線索只占我們整體業務的一小部分。因此，我們仍在等待澄清，我們將看看它會如何發展，但無論如何，它都不會對我們產生太大影響。

Your next question comes from the line of Michael Graham with Canaccord Genuity.

您的下一個問題來自 Canaccord Genuity 的 Michael Graham。

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.

我只是想問一下 P&C 垂直領域的情況。我知道您提到您認為今年剩餘時間將會疲軟。我只是想問你是否有理由對明年初感到樂觀？有什麼事嗎？可能只是顏色多一點。

And then related to that, I just wanted to see if you could share anything about how this downturn is impacting your ability or you're focused on like 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.

與此相關的是，我只是想看看您是否可以分享有關這次經濟低迷如何影響您的能力或您專注於產品開發和創新等方面的信息。我想，這是否給了你更多的時間來為經濟好轉做好準備，或者你是否資源有限，也許無法按照你想要的方式進行投資？只是對您如何從長期規劃的角度處理這個問題感興趣。

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.

是的，一點沒錯。所以我認為，第一個問題的答案相對較短，自上次談話以來我們的情緒並沒有太大變化。我認為，正如您所看到的，我只是回應這一點，對，這仍然是一個真正具有挑戰性的承保環境。

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.

我的意思是你看到了一些好的跡象。例如，二手車價格已經穩定。你會看到一些批准利率緩慢的州現在批准了更大幅度的加息。例如，我想您剛剛看到 Allstate 已申請在加利福尼亞州漲價 35%。

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.

因此，您開始看到一些好的跡象，但總體而言，正如您從今天發生的許多運營商版本以及過去幾個月發布的月度報告中看到的那樣，承保環境或索賠成本通脹持續居高不下。因此，實際上，我們對財產險市場何時全面復甦的看法沒有任何修改。當然，我不認為——我們認為今年不會發生這種情況。

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 has 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 nonconverting traffic.

所以——現在，轉向你問題的第二部分，這是一個很好的問題。我認為總體而言，注重效​​率的運營商使我們能夠通過大量產品開發工作真正取得進展，從而從該渠道中獲取更高的效率。因此，一個明顯的例子是與我們的運營商合作夥伴合作，他們是買家，然後也通過非轉化流量貨幣化。

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 helped 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.

因此，在這樣的時代，每一塊營銷資金都很重要，對吧，我認為運營商方面已經廣泛採用或大力採用，實際上，該廣告計劃幫助收回了他們為吸引客戶而花費的資金到他們的網站。因此，這不一定是創新，這肯定是我們自成立以來所採用的創新商業模式的採用。

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.

但這表明運營商對各種想法非常開放，希望從營銷中獲得更高的效率。這為我們提供了一個成熟的環境，使我們能夠與合作夥伴一起創新和迭代，創造新產品、新實施等，以便我們能夠在進入疲軟市場時期時獲得更高的效率。

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 a net positive in terms of the carriers' receptivity to these new ideas and to iterate with us to come up with new ways to do things in the space.

總的來說，因為我們的創新也只是基於與合作夥伴的迭代方法，對吧，而不是我們投入大量資金的一項重大舉措，所以這不是我們領域所需要的。我們所做的是我們能夠保留維持這種創新的能力。再說一次，這對於運營商對這些新想法的接受程度以及與我們反复提出在該領域開展工作的新方法而言是一個淨積極的結果。

Your next question comes from the line of Luismario Higuera with Citigroup.

您的下一個問題來自花旗集團的 Luismario Higuera。

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?

我是路易斯替丹尼爾·格羅斯萊特發言。剛剛有一個簡單的問題 - 您是否有關於醫療補助重新確定如何影響您的健康業務的最新信息？

Yes. So on 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. I 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.

是的。因此，關於醫療保險的重新確定和對健康業務的影響，我想說的是，我認為一些重新確定，圍繞這個問題進行了一系列的反复討論。我想說的是——我認為這些數字可能會超出正在討論的內容，我認為這對我們來說總體上是積極的。

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.

我認為，我們在醫療保險方面要說的是，這些從根本上來說是非常有吸引力的計劃，運營商喜歡這項業務，因為那裡有很多保費，他們可以從中賺錢。我認為在重新決定的範圍內，他們對此感覺良好。

The -- they're a win from a consumer standpoint because you've got 0 premiums, in certain cases, 0 co-pays, great formularies. And it's a market that we have really helped kind of come online in terms of marketing.

從消費者的角度來看，它們是一場胜利，因為你有 0 保費，在某些情況下，0 共付額，很棒的處方。我們在營銷方面確實幫助這個市場上線。

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. Did that answer your question, Luis?

該產品的採用率達到 50%。這種採用將繼續上升到右翼。我們覺得從中長期來看，這是一個非常有吸引力的地方。我們非常看好未來幾年的情況。這回答了你的問題嗎，路易斯？

Yes.

是的。

Your next question comes from the line of Meyer Shields with KBW.

您的下一個問題來自 Meyer Shields 和 KBW 的線路。

A question, I guess, coming from Allstate because they talked a little bit today about some regions or maybe some subsectors 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, and I assume you talked about a broad recovery not likely?

我猜這個問題來自好事達，因為他們今天談論了一些地區或保單持有人的一些子部門，他們認為他們的定價足夠。當我們查看您的第三季度下半年指導時，是否考慮了任何形式的部分複蘇，我認為您談到了不太可能的全面復甦？

Yes. And Meyer, this is Pat. I can tackle that question. And I would say that as we look at the landscape of spend on P&C, the largest carrier spends a lot in Q1, cut through a lot of Q2 and I would say the trends have been probably reasonably stable for a couple of months with them.

是的。邁耶，這是帕特。我可以解答這個問題。我想說的是，當我們觀察財產和意外險的支出情況時，最大的承運商在第一季度花費了大量資金，在第二季度削減了很多資金，我想說，他們的趨勢可能在幾個月內相當穩定。

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 on others, but there is -- the puts and takes have been pretty balanced. And I wouldn't be surprised if there are some carriers that go, hey, we've taken an upgrade and we feel good about the 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.

自今年年初以來，其他所有人的收入都相當穩定。我們從一些方面得到了積極的消息，而另一些方面則得到了消極的消息，但看跌期權和賣出期權相當平衡。如果有一些運營商說，嘿，我們已經升級了，我們對州政府感覺良好，或者我們對高級客戶感覺良好，或者嘿，房主們，我們想加入進來，我不會感到驚訝有點關於它。還有其他一些公司可能試圖通過削減開支來提振短期盈利能力。

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 said generally expect those to kind of continue for the balance of the quarter.

所以可以說，我們的指導 - 我們通常指導我們有高度信心的事情。這就是本季度的情況。我們知道我們已經看到了一段時間的趨勢，並且我們可能普遍預計這些趨勢將在本季度的剩餘時間內持續下去。

I'll just add one thing which is that we do -- and I think we mentioned this before, I mean just how extraordinary this hard market cycle has been. I think you're going to need to see an improvement in the overall combined ratio as these rate increases run 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 the overall results are where they are.

我只想補充一件事，我們所做的——我想我們之前提到過這一點，我的意思是這個艱難的市場週期是多麼的非同尋常。我認為隨著這些利率的增加，您將需要看到總體綜合比率的改善。在像好事達這樣的保險公司真正投入那些有利可圖的口袋之前，只是因為，無論是在硬市場還是軟市場，新保單的表現往往會比現有保單的表現稍差。對於徵收新政策或增長稅，我認為雖然總體結果是這樣的，但人們並沒有太大的興趣這樣做。

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?

是的。不，這是完全有道理的。展望未來，我們是否應該假設季度或年度的自由現金流是債務減少的良好指標？

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, starting to chip away at the term loan beyond the mandatory amortization. And so I think we're in a spot where that will be the focus. And to the extent that changes, we'll be -- I'll be communicating it at the quarterly results at some point in the future.

是的。邁耶，這是帕特。我想說，從近期到中期來看，將會是這樣。我認為我們現在正專注於將自由現金流用於減少淨債務，這可以是建立我們的現金餘額，支付左輪手槍，開始削減強制攤銷之外的定期貸款。所以我認為我們正處於一個焦點所在。如果發生變化，我們將在未來某個時候在季度業績中傳達這一點。

Your next question comes from the line of Ben Hendrix with RBC Capital Markets.

您的下一個問題來自加拿大皇家銀行資本市場的本·亨德里克斯 (Ben Hendrix)。

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 M&A?

今天早上我們從 Humana 那裡聽到重申了對 AEP 活躍購物環境的期望。當我們進入 - 接近 AEP 準備時，您是否可以提出任何要求，或者您的合作夥伴之間的行為是否有任何改變，以準備今年的 AEP - 僅就併購行為或支出的一般變化而言？

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 this new CMS marketing regulation.

是的。我的意思是 - 我認為我們會在第三季度對此有更好的了解，因為那時與運營商和經紀人都會進行實際的預算討論。所以我認為，總的來說，我認為人們的情緒總體上是積極的。當然，利用率高於預期也存在一些阻力，對吧？但也有一些順風或積極的消息，即這一新的 CMS 營銷法規的適用性和潛在影響。

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.

所以我想說，總的來說，我們從合作夥伴那裡聽到的總體來說是積極的。我認為總體而言，運營商需求合作夥伴和運營商與經紀人之間的資金組合更加緊密的趨勢仍在繼續，我們預計這種趨勢將繼續下去。

But in terms of just more specificity into how that sentiment, like the sentiment that 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.

但就更具體地了解這種情緒如何，就像您今天在Humana 季度收益電話會議上提到的情緒將轉化為即將到來的AEP 和OEP 的預算一樣，我認為我們將在第三季度對此有更清晰的了解。

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

明白你了。最後，似乎您已經進行了一些相當重大的平台更改，並節省了一些成本並提供了指導。然後，我們還擁有懷特山的股份。這是否預示著我們未來可以考慮更廣泛的平台或戰略轉變？

Yes. And Ben, this is Pat. And would say -- the short answer to that question is no. I think we -- 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.

是的。本，這是帕特。我會說——這個問題的簡短答案是否定的。我認為我們過去一直是一家成長型公司。我們和財產保險領域的幾乎所有人一樣，都在這個艱難的市場中遭受了痛苦。我們非常看好該行業的長期前景，尤其是我們業務的長期前景。

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.

我認為我們顯然勒緊褲腰帶，試圖在這個艱難的環境中提振業績。但我們相信創新引擎​​和交付引擎沒有受到影響。我們將繼續高效且有效地運營業務。

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.

我們非常高興看到隨著市場的改善我們可以提供什麼。坦白說，我認為參與其中將會非常有趣，而且我們非常看好該業務的長期未來。我認為白山作為投資者，我們已經一起走過了大約 10 年的路，他們像我們一樣以價值為導向，著眼於長期。我們將他們的投資視為對美好時光即將到來的信念和信心的標誌。我們的目標是在未來幾年隨著市場的複蘇，回報他們的信任和所有投資者的信任。

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

沒有其他問題了。今天的電話會議到此結束。非常感謝您的加入。您現在可以斷開連接。