MEDIAALPHA, INC. – 10-Q/A – Management's discussion and analysis of financial condition and results of operations

The following discussion and analysis of our financial condition and results of
operations should be read together with our unaudited consolidated financial
statements and related notes included in Part I, Item 1 of this Quarterly Report
on Form 10-Q.

This discussion, particularly information with respect to our future results of
operations or financial condition, business strategy and plans, and objectives
of management for future operations, includes forward-looking statements that
involve risks and uncertainties as described under the heading "Cautionary
Statement Regarding Forward-Looking Statements" in this Quarterly Report on Form
10-Q. You should review the disclosure under the heading "Risk Factors" in Part
II, Item 1A of this Quarterly Report on Form 10-Q for a discussion of important
factors that could cause our actual results to differ materially from those
anticipated in these forward-looking statements.

Management overview

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, transparent, and results-driven
ecosystem. We believe we are the largest online customer acquisition channel in
our core verticals of property & casualty ("P&C") insurance, health insurance,
and life insurance, supporting $926 million in Transaction Value across our
platform over the the twelve-month period ended March 31, 2022.

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 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, 2022, the websites of our diversified group of supply partners and our
proprietary websites drove an average of 8.2 million Consumer Referrals on our
platform each month.

We generate revenue by earning a fee for each Consumer Referral sold on our
platform. A transaction becomes payable upon a qualifying consumer action, such
as a click, call or lead, and is not contingent on the sale of a product to the
consumer.

We believe in the disruptive power of transparency. Traditionally, insurance
customer acquisition platforms operated in a black box. We recognized that a
consumer may be valued differently by one insurer versus another; therefore,
insurers should be able to determine pricing granularly based on the value that
a particular customer segment is expected to bring to their business. As a
result, we developed a technology platform that powers an ecosystem where buyers
and sellers can transact with full transparency, control, and confidence,
aligning the interests of the parties participating on our platform.

We believe our technology is a key differentiator and a powerful driver of our
performance. We maintain deep, custom integrations with partners representing
the majority of our Transaction Value, which enable automated, data-driven
processes that optimize our partners' customer acquisition spend and revenue.
Through our platform, our insurance carrier partners can target and price across
over 35 separate consumer attributes to manage customized acquisition
strategies.

Key factors affecting our business

Revenue

We believe that our future performance will depend on many factors, including
those described below and in Part I, Item 1A "Risk Factors" in the 2021 Annual
Report on Form 10-K.

Secular trends in the insurance industry

Our technology platform was created to serve and grow with our core insurance
end markets. We believe secular trends in the insurance industry are critical
drivers of our revenue and will continue to provide strong tailwinds for our
business. More insurance consumers are shopping online and direct-to-consumer
marketing, which fuels our revenue, is the fastest growing insurance
distribution channel. In addition, insurance customer acquisition spending is
growing over time. As mass-market customer acquisition spend is becoming more
costly, insurance carriers and distributors are increasingly focusing on
optimizing customer acquisition spend, which is at the core of the service we
deliver on our platform. As long as these secular trends persist, we expect
digital insurance customer acquisition spending to continue to grow over time,
and we believe we are well-positioned to benefit from this growth.
                                       20

--------------------------------------------------------------------------------

Table of Contents

Transaction Value

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 declined to $239.0 million for the three
months ended March 31, 2022, from $262.5 million for the three months ended
March 31, 2021 due primarily to a decrease in customer acquisition spending by
P&C insurance carriers in response to reductions in underwriting profitability.
We have developed multi-faceted, deeply integrated partnerships with insurance
carriers and distributors, who are often 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, resulting in strong retention rates. As a result,
many insurance carriers and distributors use our platform as their central hub
for broadly managing digital customer acquisition and monetization. For the
three months ended March 31, 2022, 99.0% of total insurance Transaction Value
executed on our platform came from demand partner relationships from 2021.

Our demand and supply partners

We retain and attract demand partners by finding high-quality sources of
Consumer Referrals to make available to our demand partners. 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 longstanding and involve most of
the top-tier insurance carriers in the industry. In terms of buyers, during the
three months ended March 31, 2022, 15 of the top 20 largest auto insurance
carriers by customer acquisition spend were on our platform.

Consumer Referrals

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 grew to 24.6 million for the three
months ended March 31, 2022, from 24.5 million for the three months ended March
31, 2021. 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 are investing in diversifying our paid media
sources to extend beyond search engine marketing, which historically represented
the bulk of our paid media spend, into other online media sources, including
native, social, and display advertising.

Seasonality

Our results are subject to fluctuations as a result of seasonality. In
particular, our property & casualty insurance vertical is typically
characterized by seasonal strength in our quarters ending March 31 due to a
greater supply of Consumer Referrals and higher customer acquisition budgets
typically during the start of the year, and to seasonal weakness in our quarters
ending December 31 due to a lower supply of Consumer Referrals available on a
cost-effective basis and lower customer acquisition budgets from some buyers
during those quarters. Our health insurance vertical is typically characterized
by seasonal strength in our quarters ending December 31 due to open enrollment
periods for health insurance and annual enrollment for Medicare during those
quarters, with a material increase in consumer search volume for health products
and a related increase in buyer customer acquisition budgets.

Other factors affecting our partners' businesses include macro factors such as
credit availability in the market, the strength of the economy and employment
levels.

Cyclicality

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 tend to raise prices
and prioritize profitability over growth. 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. We believe that the auto insurance industry
is currently in a "hard" market due to higher than expected underwriting losses,
and that many P&C insurance carriers are reducing their customer acquisition
spending until they can increase their premium rates, the timing of which is
difficult to predict.
                                       21

--------------------------------------------------------------------------------

Table of Contents

Regulations

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 California
Consumer Privacy Act ("CCPA"), became effective on January 1, 2020, and number
of other states, including Colorado and Virginia, 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. For a description of laws and
regulations to which we are generally subject, see Item 1 "Business" and Item 1A
"Risk Factors." in our 2021 Annual Report on Form 10-K.

In addition, we are impacted by the regulation of the insurance carriers with
whom we do business. In most/all states, insurance carriers are required to
obtain approval of their premium rates from the regulatory authority in such
state. The timing of such approval process, as well as the willingness of
insurance regulators to approve rate increases, can impact the profitability of
new policies and the level of customer acquisition spending by carriers in a
given period, which in turn can cause fluctuations in our revenue and earnings.

COVID-19

While the COVID-19 pandemic has changed the physical working environment of the
substantial majority of our workforce to working from home, it has otherwise
caused only minor disruptions to our business operations with a limited impact
on our operating results thus far. Our Travel vertical is largely driven by
consumer spending on airfare, hotels, rentals and other travel products. As a
result of COVID-19, we have experienced a dramatic decline in revenue from the
Travel vertical and expect this trend to continue for the foreseeable future.
For the three months ended March 31, 2022, 2021, and 2020, revenue from the
Travel vertical comprised approximately 2.7%, 1.3%, and 7.5%, respectively, of
our total revenue. While we have sought to maintain our commercial relationships
in the Travel vertical and remain positioned to capitalize on transactions in
the Travel vertical when travel activity resumes, we do not expect that revenue
from the Travel vertical will match our historical results or have any material
impact on our overall revenue or profitability for the foreseeable future. In
addition, during the second half of 2021, supply chain disruptions and cost
increases caused by the pandemic contributed to higher-than-expected property
and casualty insurance claims costs, which has led many carriers to reduce their
customer acquisition spending to preserve their profitability. These reductions
continue to impact revenue from our P&C vertical, and the duration and extent of
this impact are difficult to estimate beyond the second quarter of 2022.

Recent developments

On February 24, 2022, we agreed to acquire substantially all of the assets of
Customer Helper Team, LLC ("CHT"), a provider of customer generation and
acquisition services for Medicare insurance, automobile insurance, health
insurance, life insurance, debt settlement, and credit repair companies on the
terms and subject to the conditions set forth in the Asset Purchase Agreement
(as amended, the "Agreement"). We closed the transaction on April 1, 2022. We
believe the acquisition is a good strategic fit with our long-term objectives
and will increase our ability to generate Consumer Referrals on various social
media and short form video platforms. The purchase price for the acquisition was
$50 million in cash at closing, adjusted for any working capital adjustments as
set forth in the Agreement, plus up to an additional $20 million of contingent
cash consideration based on CHT's achievement of revenue and profitability
targets over the next two years. We funded the transaction in part by drawing
$25 million under the 2021 Revolving Credit Facility and the balance from cash
on hand as of the closing.

Key components of our results of operations

Revenue

We operate primarily in the P&C insurance, health insurance and life insurance
verticals and generate revenue through the purchase and sale of Consumer
Referrals.

The price and amount of Consumer Referrals purchased and sold on our platform
vary based on a number of market conditions and consumer attributes, including
(i) geographic location of consumers, (ii) demographic attributes of consumers,
(iii) the source of Consumer Referrals and quality of conversion by source,
(iv) buyer bids and (v) buyer demand and budget.
                                       22

--------------------------------------------------------------------------------

Table of Contents

In our Open Marketplace transactions, we have control over the Consumer
Referrals that are sold to our demand partners. In these arrangements, we have
separate agreements with demand partners and suppliers. Suppliers are not a
party to the contractual arrangements with our demand partners, nor are the
suppliers the beneficiaries of our demand partner agreements. We earn fees from
our demand partners and separately pay (i) a revenue share to suppliers and
(ii) a fee to internet search companies to drive consumers to our proprietary
websites. We are the principal in the Open Marketplace transactions. As a
result, the fees paid by demand partners are recognized as revenue and the fees
paid to suppliers are included in cost of revenue.

With respect to our Private Marketplace transactions, buyers and suppliers
contract with one another directly and leverage our platform to facilitate
transparent, real-time transactions utilizing the reporting and analytical tools
available to them from use of our platform. We charge a platform fee on the
Consumer Referrals transacted. We act as an agent in the Private Marketplace
transactions and recognize revenue for the platform fee received. There are no
separate payments made by us to suppliers in our Private Marketplace.

Costs and operating expenses

Costs and operating expenses consist primarily of cost of revenue, sales and
marketing expenses, product expenses and general and administrative expenses.

Cost of revenue

Our cost of revenue is comprised primarily of revenue share payments to
suppliers and traffic acquisition costs paid to top tier search engines, as well
as telephony infrastructure costs, internet and hosting costs, and merchant
fees, and include salaries, wages and benefits, including non-cash equity-based
compensation, and other expenses.

Sales and marketing

Sales and marketing expenses consist primarily of an allocation of personnel
expenses for employees engaged in demand side and supply side business
development, marketing and media acquisition activities, and include salaries,
wages and benefits, including non-cash equity-based compensation. Sales and
marketing expenses also include costs related to attracting partners to our
platform, including marketing and promotions, tradeshows and related travel and
entertainment expenses. Sales and marketing expenses also include an allocated
portion of rent and facilities expenses and depreciation and amortization
expense.

Product development

Product development expenses consist primarily of an allocation of personnel
expenses for employees engaged in technology, engineering and product
development and include salaries, wages and benefits, including non-cash
equity-based compensation. Product development expenses also include an
allocated portion of rent and facilities expenses and depreciation and
amortization expense.

General and administrative

General and administrative expenses consist primarily of an allocation of
personnel expenses for executive, finance, legal, human resources, and business
analytics employees, and include salaries, wages and benefits, including
non-cash equity-based compensation. General and administrative expenses also
include professional services and an allocated portion of rent and facilities
expenses and depreciation expense.

Interest expense

Interest expense consists primarily of interest expense associated with
outstanding borrowings under our loan and security agreements and the
amortization of deferred financing costs associated with these arrangements.

Provision for income taxes

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
                                       23

--------------------------------------------------------------------------------

Table of Contents

to its members, including MediaAlpha, Inc. As our ownership interest in QLH
increases, our share of the taxable income (loss) of QLH also increases. As of
March 31, 2022, our ownership interest in QLH was 68.2%.

Net income (loss) attributable to Non-controlling interest

Net income (loss) is attributed to non-controlling interests in accordance with
QLH's limited liability company agreement. We allocate the share of net income
(loss) incurred subsequent to the Reorganization Transactions to the
non-controlling interest holders pro-rata to their holdings. The non-controlling
interests balance represents the Class B-1 units, substantially all of which are
held by Insignia and the Senior Executives.

Operating results for the three months ended March 31, 2022 and 2021

The following table sets forth our operating results in absolute dollars and as
a percentage of revenue for the three months ended March 31, 2022 and 2021:

                                                                                Three months ended
                                                                                     March 31,
(in thousands)                                                    2022                                       2021
Revenue                                           $    142,599                100.0  %       $    173,588                100.0  %
Costs and operating expenses
Cost of revenue                                        120,881                 84.8  %            147,180                 84.8  %
Sales and marketing                                      7,223                  5.1  %              5,391                  3.1  %
Product development                                      5,216                  3.7  %              3,320                  1.9  %
General and administrative                              17,148                 12.0  %             15,749                  9.1  %
Total costs and operating expenses                     150,468                105.5  %            171,640                 98.9  %
(Loss) income from operations                           (7,869)                (5.5) %              1,948                  1.1  %
Other (income), net                                       (523)                (0.4) %               (150)                (0.1) %
Interest expense                                         1,359                  1.0  %              2,301                  1.3  %
Total other expense, net                                   836                  0.6  %              2,151                  1.2  %
(Loss) before income taxes                              (8,705)                (6.1) %               (203)                (0.1) %
Income tax expense (benefit)                             1,143                  0.8  %               (364)                (0.2) %
Net (loss) income                                 $     (9,848)                (6.9) %       $        161                  0.1  %
Net (loss) attributable to non-controlling
interest                                                (2,772)                (1.9) %               (124)                (0.1) %
Net (loss) income attributable to
MediaAlpha, Inc.                                  $     (7,076)                (5.0) %       $        285                  0.2  %
Net (loss) income per share of Class A
common stock
-Basic                                            $      (0.17)                              $       0.01
-Diluted                                          $      (0.17)                              $       0.00
Weighted average shares of Class A common
stock outstanding
-Basic                                              40,847,941                                 33,136,632
-Diluted                                            40,847,941                                 62,163,390


                                       24

--------------------------------------------------------------------------------

Table of Contents

Revenue

The following table presents our revenue, disaggregated by vertical, for the
three months ended March 31, 2022 and 2021, and the dollar and percentage
changes between the two periods:

                                                Three Months                                                Three Months
                                                    Ended                                                       Ended
                                                  March 31,                                                   March 31,
(dollars in thousands)                              2022                 $                   %                  2021
Property & Casualty insurance                   $   87,454          $ (38,087)               (30.3) %       $  125,541
Percentage of total revenue                           61.3  %                                                     72.3  %
Health insurance                                    42,109              6,213                 17.3  %       $   35,896
Percentage of total revenue                           29.5  %                                                     20.7  %
Life insurance                                       7,067               (886)               (11.1) %       $    7,953
Percentage of total revenue                            5.0  %                                                      4.6  %
Other                                                5,969              1,771                 42.2  %       $    4,198
Percentage of total revenue                            4.2  %                                                      2.4  %
Revenue                                         $  142,599            (30,989)               (17.9) %       $  173,588


The decrease in P&C insurance revenue for the three months ended March 31, 2022,
compared with the three months ended March 31, 2021, was due to a decrease in
customer acquisition spending by certain insurance carriers to address
profitability concerns caused by higher-than-expected automobile repair and
replacement costs and overall inflationary pressures and certain carriers and
supply partners shifting their transactions with each other from our Open
Marketplace to our Private Marketplace due to lower platform fees for our
Private Marketplace, which transact on a net revenue basis . The auto insurance
industry began to experience a cyclical downturn in the second half of 2021,
with many P&C carriers experiencing lower than expected underwriting
profitability, leading them to reduce marketing budget allocations to our
channel. We are currently unable to predict the duration of this cyclical
downturn or its impact on our revenue from the P&C insurance vertical, or our
profitability, beyond the second quarter of 2022.

The increase in health insurance revenue for the three months ended March 31,
2022, compared with the three months ended March 31, 2021, was driven by
increased customer acquisition spending in our marketplaces by health insurance
carriers and brokers, as well as by an increased supply of customer referrals to
our marketplaces by our supply partners and our proprietary websites due to the
increased demand. Additionally, the Open and Annual Enrollment periods for
fiscal 2021, which typically end by December 15th, were extended until January
15, 2022, resulting in increased revenue from our health insurance vertical
during the current quarter.

The decrease in life insurance revenue for the three months ended March 31,
2022, compared with the three months ended March 31, 2021, was driven by a
decrease in customer shopping for life insurance as concerns related to COVID-19
eased.

The increase in other revenue for the three months ended March 31, 2022,
compared with the three months ended March 31, 2021, was driven primarily by an
increase in travel comparison shopping, due to the easing of concerns related to
COVID-19, as well as higher activity levels from our consumer finance supply and
demand partners due to the continued strength in the mortgage and refinance
market.

Cost of revenue

The following table presents our cost of revenue for the three months ended
March 31, 2022 and 2021, and the dollar and percentage changes between the two
periods:

                               Three Months Ended                                  Three Months Ended
(dollars in thousands)           March 31, 2022            $             %           March 31, 2021
Cost of revenue               $         120,881       $ (26,299)      (17.9) %    $         147,180
Percentage of revenue                      84.8  %                                             84.8  %

The decrease in cost of revenue for the three months ended March 31, 2022,
compared with the three months ended March 31, 2021, was driven by the overall
decrease in revenue.

                                       25

--------------------------------------------------------------------------------

Table of Contents

Sales and marketing

The following table presents our sales and marketing expenses for the three
months ended March 31, 2022 and 2021, and the dollar and percentage changes
between the two periods:

                               Three Months Ended                                Three Months Ended
(dollars in thousands)           March 31, 2022           $            %           March 31, 2021
Sales and marketing           $           7,223       $ 1,832        34.0  %    $           5,391
Percentage of revenue                       5.1  %                                            3.1  %


The increase in sales and marketing expenses for the three months ended March
31, 2022, compared with the three months ended March 31, 2021, was due primarily
to higher equity-based compensation expense of $1.0 million and an increase in
personnel-related costs of $0.8 million resulting from planned headcount
additions.

Product development

The following table presents our product development expenses for the three
months ended March 31, 2022 and 2021, and the dollar and percentage changes
between the two periods:

                               Three Months Ended                                Three Months Ended
(dollars in thousands)           March 31, 2022           $            %           March 31, 2021
Product development           $           5,216       $ 1,896        57.1  %    $           3,320
Percentage of revenue                       3.7  %                                            1.9  %


The increase in product development expenses for the three months ended March
31, 2022, compared with the three months ended March 31, 2021, was due primarily
to higher equity-based compensation expense of $0.9 million and an increase in
personnel-related costs of $0.8 million resulting from planned headcount
additions to continue to enhance our technology.

General and administrative

The following table presents our general and administrative expenses for the
three months ended March 31, 2022 and 2021, and the dollar and percentage
changes between the two periods:

                                 Three Months Ended                              Three Months Ended
(dollars in thousands)             March 31, 2022           $           %          March 31, 2021
General and administrative      $         17,148        $ 1,399       8.9  %    $         15,749
Percentage of revenue                       12.0   %                                         9.1   %


The increase in general and administrative expenses for the three months ended
March 31, 2022, compared with the three months ended March 31, 2021, was due
primarily to higher equity-based compensation expense of $1.3 million and an
increase in personnel-related costs of $0.7 million resulting from planned
headcount additions, offset in part by lower legal and professional fees.

Equity-based compensation

The following table presents our equity-based compensation expense that was
included in costs and operating expenses for the three months ended March 31,
2022 and 2021, and the dollar and percentage changes between the two periods:

                                 Three Months Ended                                 Three Months Ended
(dollars in thousands)             March 31, 2022            $            %           March 31, 2021
Cost of revenue                 $               398      $    (2)       (0.5) %    $               400
Sales and marketing                           2,705        1,003        58.9  %                  1,702
Product development                           2,249          917        68.8  %                  1,332
General and administrative                    8,421        1,253        17.5  %                  7,168
Total                           $            13,773      $ 3,171        29.9  %    $            10,602


The increase in equity-based compensation expense for the three months ended
March 31, 2022, compared with the three months ended March 31, 2021, was driven
primarily by expenses related to additional restricted stock units granted
during 2021.
                                       26

--------------------------------------------------------------------------------

Table of Contents

Amortization

The following table presents our amortization of intangible asset expense that
was included in costs and operating expenses for the three months ended March
31, 2022 and 2021, and the dollar and percentage changes between the two
periods:

                               Three Months Ended                               Three Months Ended
(dollars in thousands)           March 31, 2022           $           %           March 31, 2021

Sales and Marketing           $               683      $ (63)       (8.4) %    $               746

The decrease in amortization expense for the three months ended March 31, 2022
compared with the three months ended March 31, 2021 was not material.

Other (income), net

The following table presents our other income for the three months ended March
31, 2022 and 2021, and the dollar and percentage changes between the two
periods:

                               Three Months Ended                                Three Months Ended
(dollars in thousands)           March 31, 2022           $            %           March 31, 2021
Other (income), net           $           (523)        $ (373)      248.7  %    $           (150)
Percentage of revenue                     (0.4)   %                                         (0.1)   %


The increase in other income for the three months ended March 31, 2022, compared
with the three months ended March 31, 2021, was driven primarily by estimated
future state tax benefits adjustments related to the tax receivables agreement
("TRA").

Interest expense

The following table presents our interest expense for the three months ended
March 31, 2022 and 2021, and the dollar and percentage changes between the two
periods:

                               Three Months Ended                               Three Months Ended
(dollars in thousands)           March 31, 2022          $            %           March 31, 2021
Interest expense              $           1,359       $ (942)      (40.9) %    $           2,301
Percentage of revenue                       1.0  %                                           1.3  %

The decrease in interest expense for the three months ended March 31, 2022,
compared with the three months ended March 31, 2021, was driven by a lower
interest rate on the 2021 Credit Facility resulting from the refinancing of our
2020 Credit Facilities on July 29, 2021.

Income tax expense (benefit)

The following table presents our income tax expense for the three months ended
March 31, 2022 and 2021, and the dollar and percentage changes between the two
periods:

                                                     Three Months
                                                        Ended                                                      Three Months Ended
(dollars in thousands)                              March 31, 2022            $                    %                 March 31, 2021
Income tax expense (benefit)                        $     1,143          $   1,507                (414.0) %       $           (364)
Percentage of revenue                                       0.8  %                                                            (0.2)   %


For the three months ended March 31, 2022, we recorded an income tax expense of
$1.1 million resulting from our effective tax rate of (13.1)%, which differed
from the U.S. federal statutory rate of 21%, due primarily to 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 March 31, 2021, we recorded an income tax benefit of $0.4
million resulting from our effective tax rate of 179.3% which differed from the
U.S. federal statutory rate of 21%, primarily due to nondeductible equity-based
compensation, state taxes, income not taxable to us associated with the
non-controlling interest, nondeductible transaction costs associated with the
secondary offering and the impact of tax benefits associated with equity-based
awards.
                                       27

--------------------------------------------------------------------------------

Table of Contents

Key business and operating metrics

In addition to traditional financial metrics, we rely upon certain business and
operating metrics that are not presented in accordance with GAAP to estimate the
volume of spending on our platform, estimate and recognize revenue, evaluate our
business performance and facilitate our operations. Such business and operating
metrics should not be considered in isolation from, or as an alternative to,
measures presented in accordance with GAAP and should be considered together
with other operating and financial performance measures presented in accordance
with GAAP. Also, such business and operating metrics may not necessarily be
comparable to similarly titled measures presented by other companies.

Adjusted EBITDA

We define "Adjusted EBITDA" as net income excluding interest expense, income tax
benefit (expense), depreciation expense on property and equipment, amortization
of intangible assets, as well as equity-based compensation expense and certain
other adjustments as listed in the table below. Adjusted EBITDA is a non-GAAP
financial measure that we present to supplement the financial information we
present on a GAAP basis. We monitor and present Adjusted EBITDA because it is a
key measure used by our management to understand and evaluate our operating
performance, to establish budgets and to develop operational goals for managing
our business. We believe that Adjusted EBITDA helps identify underlying trends
in our business that could otherwise be masked by the effect of the expenses
that we exclude in the calculations of Adjusted EBITDA. Accordingly, we believe
that Adjusted EBITDA provides useful information to investors and others in
understanding and evaluating our operating results, enhancing the overall
understanding of our past performance and future prospects. In addition,
presenting Adjusted EBITDA provides investors with a metric to evaluate the
capital efficiency of our business.

Adjusted EBITDA is not presented in accordance with GAAP and should not be
considered in isolation of, or as an alternative to, measures presented in
accordance with GAAP. There are a number of limitations related to the use of
Adjusted EBITDA rather than net income, which is the most directly comparable
financial measure calculated and presented in accordance with GAAP. These
limitations include the fact that Adjusted EBITDA excludes interest expense on
debt, income tax benefit (expense), equity-based compensation expense,
depreciation and amortization, and certain other adjustments that we consider
useful information to investors and others in understanding and evaluating our
operating results. In addition, other companies may use other measures to
evaluate their performance, including different definitions of "Adjusted
EBITDA," which could reduce the usefulness of our Adjusted EBITDA as a tool for
comparison.

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 months ended March 31, 2022 and 2021.

                                                                Three months ended
                                                                    March 31,
(in thousands)                                                  2022           2021
Net (loss) income                                           $   (9,848)     $    161
Equity-based compensation expense                               13,773        10,602
Interest expense                                                 1,359         2,301
Income tax expense (benefit)                                     1,143          (364)
Depreciation expense on property and equipment                      98      

82

Amortization of intangible assets                                  683           746
Transaction expenses(1)                                            380         2,665
Employee-related costs(2)                                            -           250
SOX implementation costs(3)                                        110           152
Changes in TRA related liability(4)                               (630)     

(156)

Settlement of federal and state income tax refunds(5)               74             -
Adjusted EBITDA                                             $    7,142      $ 16,439


(1)Transaction expenses consist of $0.4 million of expenses incurred by us for
the three months ended March 31, 2022 in connection with the acquisition of CHT.
For the three months ended March 31, 2021 transaction expenses consist of
$2.7 million for legal, accounting, and other consulting fees in connection with
the Secondary Offering.

(2)Employee-related costs include $0.3 million of expenses incurred by us for
the three months ended March 31, 2021 for amounts payable to recruiting firms in
connection with the hiring of certain executive officers to support our
operation as a publicly-reporting company.
                                       28

--------------------------------------------------------------------------------

Table of Contents

(3)SOX implementation costs consist of $0.1 million and $0.2 million of expenses
incurred by us for the three months ended March 31, 2022 and 2021, respectively,
for third-party consultants to assist us with the development, implementation,
and documentation of new and enhanced internal controls and processes for
compliance with SOX Section 404(b) for 2021.

(4)Changes in TRA related liability consist of $0.6 million and $0.2 million of
income for the three months ended March 31, 2022 and 2021, respectively, due to
a change in the estimated future state tax benefits and other changes in the
estimate resulting in reductions of the TRA liability.

(5)Settlement of federal and state tax refunds consist of $0.1 million of
expense incurred by us for the three months ended March 31, 2022 related to
reimbursement to White Mountains for state tax refunds for the period prior to
the Reorganization Transaction related to 2020 tax returns. The settlement also
resulted in a benefit of the same amount which has been recorded within income
tax expense (benefit).

Contribution and Contribution Margin

We define "Contribution" as revenue less revenue share payments and online
advertising costs, or, as reported in our consolidated statements of operations,
revenue less cost of revenue (i.e., gross profit), as adjusted to exclude the
following items from cost of revenue: equity-based compensation; salaries,
wages, and related costs; internet and hosting costs; amortization;
depreciation; other services; and merchant-related fees. We define "Contribution
Margin" as Contribution expressed as a percentage of revenue for the same
period. Contribution and Contribution Margin are non-GAAP financial measures
that we present to supplement the financial information we present on a GAAP
basis. We use Contribution and Contribution Margin to measure the return on our
relationships with our supply partners (excluding certain fixed costs), the
financial return on and efficacy of our online advertising costs to drive
consumers to our proprietary websites, and our operating leverage. We do not use
Contribution and Contribution Margin as measures of overall profitability. We
present Contribution and Contribution Margin because they are used by our
management and board of directors to manage our operating performance, including
evaluating our operational performance against budget and assessing our overall
operating efficiency and operating leverage. For example, if Contribution
increases and our headcount costs and other operating expenses remain steady,
our Adjusted EBITDA and operating leverage increase. If Contribution Margin
decreases, we may choose to re-evaluate and re-negotiate our revenue share
agreements with our supply partners, to make optimization and pricing changes
with respect to our bids for keywords from primary traffic acquisition sources,
or to change our overall cost structure with respect to headcount, fixed costs
and other costs. Other companies may calculate Contribution and Contribution
Margin differently than we do. Contribution and Contribution Margin have their
limitations as analytical tools, and you should not consider them in isolation
or as substitutes for analysis of our results presented in accordance with GAAP.

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, 2022 and 2021:

                                                                             Three months ended
                                                                                  March 31,
(in thousands)                                                             2022               2021
Revenue                                                                $ 142,599          $ 173,588
Less cost of revenue                                                    (120,881)          (147,180)
Gross profit                                                              21,718             26,408
Adjusted to exclude the following (as related to cost of
revenue):
Equity-based compensation                                                    398                400
Salaries, wages, and related                                                 656                464
Internet and hosting                                                         104                102
Other expenses                                                               127                107
Depreciation                                                                   6                  7
Other services                                                               530                291
Merchant-related fees                                                         15                 90
Contribution                                                              23,554             27,869
Gross margin                                                                15.2  %            15.2  %
Contribution Margin                                                         16.5  %            16.1  %


                                       29

--------------------------------------------------------------------------------

Table of Contents

Transaction Value

We define "Transaction Value" as the total gross dollars transacted by our
partners on our platform. Transaction Value is a driver of revenue, with
differing revenue recognition based on the economic relationship we have with
our partners. Our partners use our platform to transact via Open and Private
Marketplace transactions. In our Open Marketplace model, Transaction Value is
equal to revenue recognized and revenue share payments to our supply partners
represent costs of revenue. In our Private Marketplace model, revenue recognized
represents a platform fee billed to the demand partner or supply partner based
on an agreed-upon percentage of the Transaction Value for the Consumer Referrals
transacted, and accordingly there are no associated costs of revenue. We utilize
Transaction Value to assess revenue and to assess the overall level of
transaction activity through our platform. We believe it is useful to investors
to assess the overall level of activity on our platform and to better understand
the sources of our revenue across our different transaction models and
verticals.

The following table presents Transaction Value by platform model for the three
months ended March 31, 2022 and 2021:

                                                  Three months ended
                                                      March 31,
(dollars in thousands)                           2022            2021
Open Marketplace transactions                $ 138,096       $ 169,348
Percentage of total Transaction Value             57.8  %         64.5  %
Private Marketplace transactions               100,916          93,114
Percentage of total Transaction Value             42.2  %         35.5  %
Total Transaction Value                      $ 239,012       $ 262,462

The following table presents Transaction Value by vertical for the three months
ended March 31, 2022 and 2021:

                                                  Three months ended
                                                      March 31,
(dollars in thousands)                           2022            2021
Property & Casualty insurance                $ 148,083       $ 183,426
Percentage of total Transaction Value             62.0  %         69.9  %
Health insurance                                60,255          50,342
Percentage of total Transaction Value             25.2  %         19.2  %
Life insurance                                  12,392          14,442
Percentage of total Transaction Value              5.2  %          5.5  %
Other (1)                                       18,282          14,252
Percentage of total Transaction Value              7.6  %          5.4  %
Total Transaction Value                      $ 239,012       $ 262,462

(1)Our other verticals include Travel, Education and Consumer Finance.

Consumer Referrals

We define "Consumer Referral" as any consumer click, call or lead purchased by a
buyer on our platform. Click revenue is recognized on a pay-per-click basis and
revenue is earned and recognized when a consumer clicks on a listed buyer's
advertisement that is presented subsequent to the consumer's search (e.g., auto
insurance quote search or health insurance quote search). Call revenue is earned
and recognized when a consumer transfers to a buyer and remains engaged for a
requisite duration of time, as specified by each buyer. Lead revenue is
recognized when we deliver data leads to buyers. Data leads are generated either
through insurance carriers, insurance-focused research destination websites or
other financial websites that make the data leads available for purchase through
our platform, or when consumers complete a full quote request on our proprietary
websites. Delivery occurs at the time of lead transfer. The data we generate
from each Consumer Referral feeds into our analytics model to generate
conversion probabilities for each unique consumer, enabling discovery of
predicted return and cost per sale across the platform and helping us to improve
our platform technology. We monitor the number of Consumer Referrals on our
platform in order to measure Transaction Value, revenue and overall business
performance across our verticals and platform models. For the three months ended
March 31, 2022, Transaction Value generated from clicks, calls and leads was
77.7%, 11.7% and 10.6%, respectively. For the three months ended March 31, 2021,
Transaction Value generated from clicks, calls and leads was 82.6%, 7.2% and
10.2%, respectively.
                                       30

--------------------------------------------------------------------------------

  Table of Contents


Segment information

We operate in the United States and in a single operating segment. Operating
segments are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker, or decision-making group, in deciding how to allocate
resources and in assessing performance. Our chief operating decision maker is
our chief executive officer, who reviews financial information presented on a
consolidated basis for purposes of allocating resources and evaluating financial
performance. No expense or operating income is evaluated at a segment level.
Since we operate in one operating segment and reportable segment, all required
financial segment information can be found in the consolidated financial
statements.

Liquidity and capital resources

Overview

Our principal sources of liquidity are our cash flows generated from operations.
Our principal uses of cash include to fund operations, interest payments and
mandatory principal payments on our long-term debt. As of March 31, 2022 and
December 31, 2021, our cash and cash equivalents totaled $55.3 million and $50.6
million, respectively.

We believe that our current sources of liquidity, which include cash flow
generated from operations, cash and funds available under the 2021 Credit
Facilities, will be sufficient to meet our projected operating and debt service
requirements for at least the next 12 months. To the extent that our current
liquidity is insufficient to fund future activities, we may need to raise
additional funds. 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 and supply chain disruptions and cost
increases caused by the pandemic contributed to higher-than-expected property
and casualty insurance claims costs, which led many carriers to reduce their
customer acquisition spending to preserve their profitability. These reductions
continue to impact revenue from our P&C vertical and we are currently unable to
estimate the impact beyond the second quarter of 2022. We have typically not
used funds available under our credit facilities to fund our operations and
payments under the credit facilities.

On February 24, 2022, we entered into an agreement to acquire substantially all
of the assets of Customer Helper Team, LLC ("CHT") for a purchase price of
$50.0 million in cash at closing, adjusted for any working capital adjustments,
plus up to an additional $20.0 million of contingent cash consideration based on
CHT's achievement of revenue and profitability targets over the next two years.
We closed the transaction on April 1, 2022. We funded the transaction in part by
drawing $25.0 million under the 2021 Revolving Credit Facility and the balance
from cash on hand as of the closing.

On March 14, 2022, our Board of Directors approved the repurchase of shares of
our Class A common stock having an aggregate value of up to $5.0 million from
time to time in open market transactions at prevailing market prices or by other
means in accordance with federal securities laws. We expect the repurchases to
be made over the second and third quarters of 2022. The timing and amount of any
share repurchases will be determined by our management team based on their
ongoing evaluation of market conditions, our capital needs, debt covenants and
other factors. The repurchases will be financed from our cash balances.

We may engage in additional merger and acquisition or other activities that
could require us to draw on our existing credit facilities or may need to raise
additional funds. In the future, we may attempt to raise additional capital
through the sale of equity securities or through debt financing arrangements. If
we raise additional funds by issuing equity securities, the ownership of our
existing stockholders will be diluted. The incurrence of additional debt
financing would result in debt service obligations, and any future instruments
governing such debt could provide for operating and financing covenants that
could restrict our operations. Our material cash requirements include our
long-term debt, operating lease obligations, and liabilities under the TRA.

Cash Flows

The following table presents a summary of our cash flows for the three months
ended March 31, 2022 and 2021, and the dollar and percentage changes between the
periods:
                                       31

--------------------------------------------------------------------------------

  Table of Contents

                                                  Three months                                                    Three months
                                                ended March 31,                                                 ended March 31,
(dollars in thousands)                                2022                  $                    %                    2021
Net cash provided by (used in) operating
activities                                      $       8,089          $  17,445                (186.5) %       $      (9,356)
Net cash used in investing activities                     (40)                29                 (42.0) %                 (69)
Net cash used in financing activities                  (3,325)            (2,049)                160.6  %              (1,276)


Operating activities

Cash flows provided by operating activities were $8.1 million for the three
months ended March 31, 2022, compared with cash flows used in operating
activities of $9.4 million for the three months ended March 31, 2021. The
increase resulted from lower working capital usage due primarily to the timing
of our payables and higher working capital usage in the 2020 and 2021 driven
primarily by growth in our business and expenses incurred in connection with the
IPO and Reorganization Transactions and Secondary Offering, offset in part by
the higher net loss in the current period.

Investing activities

Cash flows used in investing activities were immaterial for the three months
ended March 31, 2022 and 2021.

Financing activities

Cash flows used in financing activities were $3.3 million for the three months
ended March 31, 2022, compared with $1.3 million for the three months ended
March 31, 2021. The increase in net cash used was due to the principal payment
on the 2021 Term Loan Facility.

Senior secured credit facilities

2021 Credit Facilities

On July 29, 2021, we entered into an amendment (the "First Amendment") to the
2020 Credit Agreement (as amended by the First Amendment, the "Amended Credit
Agreement"). The Amended Credit Agreement provides for a new senior secured term
loan facility in an aggregate principal amount of $190.0 million (the "2021 Term
Loan Facility"), the proceeds of which were used to refinance all of the
$186.4 million of the existing 2020 Term Loan Facility outstanding and the
unpaid interest thereof as of the date of the First Amendment, to pay fees
related to these transactions, and to provide cash for general corporate
purposes, and a new senior secured revolving credit facility with commitments in
an aggregate amount of $50.0 million (the "2021 Revolving Credit Facility" and,
together with the 2021 Term Loan Facility, the "2021 Credit Facilities"), which
replaced the 2020 Revolving Credit Facility. Our obligations under the 2021
Credit Facilities are guaranteed by QLH and secured by substantially all assets
of QLH and QuoteLab, LLC.

Borrowings under the 2021 Credit Facilities bear interest at a rate equal to, at
our option, the London Interbank Offered Rate plus an applicable margin, with a
floor of 0.00%, or base rate plus an applicable margin. The applicable margins
will be based on our consolidated total net leverage ratio as calculated under
the terms of the Amended Credit Agreement (the "Leverage Ratio") for the prior
fiscal quarter and range from 2.00% to 2.75% with respect to the London
interbank offered rate and from 1.00% to 1.75% with respect to the base rate.

Loans under the 2021 Credit Facilities will mature on July 29, 2026. Loans under
the 2021 Term Loan Facility will 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.

As of March 31, 2022, we had $184.6 million of outstanding borrowings, net of
deferred debt issuance costs of $3.0 million, under the 2021 Credit Facilities.
On April 1, 2022, we borrowed $25.0 million under the 2021 Revolving Credit
Facility to pay a portion of the purchase price for our acquisition of CHT.

Tax receivables agreement

Our purchases (through Intermediate Holdco) of Class B-1 units from certain
unitholders in connection with the IPO, as well as exchanges of Class B-1 units
subsequent to the IPO (together with an equal number of shares of our Class B
common stock) for shares of our Class A common stock (or, at our election, cash
of an equivalent value) ("Exchange"), and the Pre-IPO Leveraged Distribution and
other actual or deemed distributions by QLH to its members pursuant to the
Exchange Agreement,
                                       32

--------------------------------------------------------------------------------

Table of Contents

have resulted and are expected to continue to result in increases in our
allocable tax basis in the assets of QLH. These increases in tax basis are
expected to increase (for tax purposes) depreciation and amortization deductions
allocable to us and, therefore, reduce the amount of tax that we otherwise would
be required to pay in the future. This increase in tax basis may also decrease
gain (or increase loss) on future dispositions of certain assets to the extent
tax basis is allocated to those assets.

In connection with the IPO, we entered into the TRA with Insignia, the Senior
Executives, and White Mountains related to the tax basis step-up of the assets
of QLH and certain net operating losses of Intermediate Holdco. The agreement
requires us to pay Insignia and the Senior Executives 85% of the cash savings,
if any, in U.S. federal, state and local income tax we realize (or are deemed to
realize) as a result of (i) any increases in tax basis of assets of QLH
resulting from any Exchange, and (ii) certain other tax benefits related to
making our payments under the TRA. The TRA also requires us to pay White
Mountains 85% of the amount of the cash savings, if any, in U.S. federal, state
and local income tax that we realize (or are deemed to realize) as a result of
the utilization of the net operating losses of Intermediate Holdco attributable
to periods prior to the IPO and the deduction of any imputed interest
attributable to our payment obligations under the TRA.

In addition to tax expenses, we will also make payments under the TRA, which we
expect to be significant. We account for the income tax effects and
corresponding TRA effects resulting from any Exchange by recognizing an increase
in our deferred tax assets, based on enacted tax rates at the date of the
Exchange. Further, we evaluate the likelihood that we will realize the benefit
represented by the deferred tax asset and, to the extent that we estimate that
it is more likely than not that we will not realize the benefit, we will reduce
the carrying amount of the deferred tax asset with a valuation allowance. The
amounts to be recorded for both the deferred tax assets and the liability for
our obligations under the TRA are estimated at the time of any purchase or
exchange as a reduction to stockholders' equity, and the effects of changes in
any of our estimates after this date will be included in net income (loss).
Similarly, the effect of subsequent changes in the enacted tax rates will be
included in net income (loss). Judgment is required in assessing the future tax
consequences of events that have been recognized in our consolidated financial
statements. A change in our assessment of such consequences, such as realization
of deferred tax assets, changes in blended tax rates, changes in tax laws or
interpretations thereof could materially impact our results.

Recent accounting pronouncements

For a discussion of new accounting pronouncements recently adopted and not yet
adopted, see Note 1 to the consolidated financial statements appearing in Part
I, Item 1 of this Quarterly Report on Form 10-Q.

Critical accounting policies and estimates

Our critical accounting policies and estimates are included in the 2021 Annual
Report on Form 10-K and did not materially change during the three months ended
March 31, 2022.