Tree.com (TREE) shares ended the last trading session 22.6% higher at $50.34. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 14.7% gain over the past four weeks.LendingTree experienced a surge in its stock price following the release of stronger-than-expected preliminary second-quarter 2025 results and an upward revision to its full-year outlook. The company anticipates second-quarter revenue of $250 million, exce ...

CHARLOTTE, N.C., July 23, 2025 /PRNewswire/ -- LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation's leading online financial services marketplace, is providing preliminary revenue, variable marketing margin and adjusted EBITDA results for the second quarter 2025. The company also announces preliminary third quarter 2025 financial guidance and a preliminary update to our full-year 2025 outlook."Our business is generating strong financial performance, with all three of our segments prod ...

Core Points - LendingTree, Inc. will release its fiscal second quarter 2025 results after market close on July 31, 2025 [1] - A conference call will be held at 5:00 p.m. ET to discuss the earnings release, which will also be webcast [2] - LendingTree is a leading online financial services marketplace, providing access to loans, credit cards, insurance, and more through a network of over 600 financial partners [3] Company Overview - LendingTree aims to empower consumers financially by helping them obtain financing, save money, and improve their financial health [3] - The company has a portfolio of innovative products and personalized financial recommendations to assist customers in achieving financial wins [3] - LendingTree is headquartered in Charlotte, NC [4]

Core Insights - Pagaya Technologies Ltd. (PGY) and LendingTree, Inc. (TREE) are fintech firms aiming to innovate the lending sector through different approaches [1][2] - PGY leverages AI for credit underwriting and securitization, while TREE operates an online marketplace connecting borrowers and lenders [1][2] Pagaya's Case - Pagaya's adaptable business model and capital-efficient structure allow it to diversify beyond personal loans into auto lending and point-of-sale financing, enhancing resilience [3][11] - The company has established a network of over 135 institutional partners and utilizes forward flow agreements for funding stability during market disruptions [4][6] - Pagaya's proprietary technology, including the Pre-screen solution, enables lenders to offer pre-approved loans, improving credit access with minimal marketing costs [5] - The capital-light model limits credit and market risk, maintaining liquidity and minimizing loan write-downs, with $206.5 million in cash against $507.8 million in debt as of March 31, 2025 [6][7] LendingTree's Case - LendingTree has evolved its strategy to diversify into non-mortgage products, including personal, auto, small business, and student loans, enhancing its marketplace offerings [8][9] - The launch of the WinCard in 2023 marks its entry into the branded credit market, while initiatives like SPRING and TreeQual improve cross-selling opportunities [9][10] - LendingTree's investment in EarnUp reflects its commitment to a tech-enabled ecosystem for financial health management [10] Financial Performance and Projections - Pagaya expects 2025 revenues between $1.175 billion and $1.3 billion, with year-over-year growth of 19.9% and 15.7% for 2025 and 2026, respectively [19] - The consensus estimate for Pagaya's earnings indicates a significant increase of 195.2% for 2025 [19] - In contrast, LendingTree projects 2025 revenues between $955 million and $995 million, with lower growth rates of 9.2% and 6.4% for 2025 and 2026, respectively [20] - LendingTree's earnings growth is expected to be 43.9% for 2025, but a decline of 3.5% for 2026 [21] Market Performance and Valuation - Pagaya's stock has surged 130.3% this year, while LendingTree's has decreased by 4.6% [13] - Pagaya's price-to-book (P/B) ratio is 3.66X, compared to LendingTree's 4.66X, indicating a more attractive valuation for Pagaya [14][15] - Pagaya's return on equity (ROE) is 9.28%, lower than LendingTree's 14.76%, suggesting LendingTree is more efficient in generating profits [15] Investment Outlook - Pagaya's rapid scaling, capital-light model, and strong growth outlook make it a compelling investment opportunity compared to LendingTree [23][24] - While LendingTree has a well-established marketplace, its growth is slowing, making Pagaya appear better positioned for long-term gains [24]

Revenue Growth - Revenue for the first quarter of 2025 increased by 43% to $239.7 million compared to $167.8 million in the first quarter of 2024[145] - The Insurance segment saw a revenue increase of $60.8 million, or 71%, reaching $146.7 million in Q1 2025, driven by a 41% increase in revenue per consumer and a 22% increase in volume[147] - The Home segment's revenue rose by $6.6 million, or 22%, to $37.0 million in Q1 2025, attributed to growth in home equity loans and mortgage products[148] - Revenue from home equity loans and lines of credit increased by $5.0 million, or 24%, to $25.8 million, with a 50% increase in volume[149] - The Consumer segment's revenue increased by $4.6 million, or 9%, to $56.0 million in Q1 2025[145] - Revenue from mortgage products increased by $1.6 million, or 16%, to $11.2 million in Q1 2025 from Q1 2024, driven by the refinance mortgage product[151] - Consumer segment revenue rose by $4.6 million, or 9%, to $56.0 million in Q1 2025, primarily due to increases in personal and small business loans[152] - Personal loans revenue increased by $3.3 million, or 16%, to $23.4 million in Q1 2025, supported by a 36% increase in volume[153] - Small business revenue surged by $6.4 million, or 48%, in Q1 2025, attributed to more consumers completing request forms and higher revenue per consumer[154] - Total revenue for the company increased by $71.96 million, or 43%, to $239.73 million in Q1 2025 compared to Q1 2024[172] Costs and Expenses - Total costs and expenses rose by 54% to $246.8 million in Q1 2025, compared to $160.6 million in Q1 2024[145] - Selling and marketing expenses increased by $64.6 million in Q1 2025, primarily due to higher advertising and promotional expenditures[158] - General and administrative expenses rose by $4.9 million in Q1 2025, with compensation and benefits increasing by $4.8 million[163] - Variable marketing expense increased to $162.0 million in Q1 2025 from $98.3 million in Q1 2024, reflecting a 64.8% rise[185] Profitability and Loss - Operating loss for Q1 2025 was $7.1 million, a significant decline from an operating income of $7.2 million in Q1 2024[145] - Net loss for Q1 2025 was $12.4 million, compared to a net income of $1.0 million in Q1 2024, marking a 1,318% decrease[145] - Adjusted EBITDA for Q1 2025 was $24.6 million, up from $21.6 million in Q1 2024, marking a 13.9% increase[192] User Growth and Engagement - The company added 0.8 million new users to its Spring platform, bringing total sign-ups to 32.1 million as of March 31, 2025[140] - Approximately $3.7 million of revenue, or 2% of total revenue, in Q1 2025 was attributed to registered Spring users who initiated transactions from the Spring platform[140] Cash Flow and Financing - As of March 31, 2025, cash and cash equivalents were $126.4 million, an increase from $106.6 million as of December 31, 2024[193] - Net cash provided by financing activities in Q1 2025 was $23.4 million, primarily from the 2024 Term Loan delayed draw[207] - The company repurchased approximately $20.0 million in principal amount of its 2025 notes for $19.7 million, resulting in a gain of $0.3 million[194] - The company expects cash flows from operations to be sufficient to fund operating needs for the next twelve months and beyond[195] Debt and Interest Rates - The company had $243.1 million outstanding under the 2021 Term Loan as of May 2, 2025[199] - A hypothetical 100-basis point change in market interest rates would result in a $2.4 million annual effect on interest paid under the Credit Facility and a $1.6 million annual effect on the 2024 Term Loan[210] - As of May 2, 2025, the Company had $243.1 million outstanding on its 2021 Term Loan Facility and $162.5 million outstanding on its 2024 Term Loan[210] Market Conditions - Fluctuations in interest rates significantly impact consumer demand for new mortgages and refinancing activity, affecting lender demand for mortgage leads[211] - When interest rates decline, consumer demand for mortgage refinancing increases, leading to higher website traffic and lower selling and marketing costs[211] - Conversely, when interest rates increase, consumer demand for refinancing decreases, resulting in lower website traffic and higher selling and marketing efforts[211] - Increased lender demand for leads occurs in a rising rate environment, which can lead to higher revenue earned per matched lead despite reduced refinancing demand[211] Insurance Segment Performance - Insurance revenue increased by 71% to $146.7 million in Q1 2025, with segment profit rising by 16% to $38.7 million[180] - The Insurance segment margin decreased to 26% in Q1 2025 from 39% in Q1 2024, attributed to re-entering higher cost marketing channels to meet increased carrier demand[181] - Cost of revenue as a percentage of revenue decreased to 4% in Q1 2025 from 5% in Q1 2024[156]

Core Insights - LendingTree, Inc. (TREE) reported an adjusted net income per share of 99 cents for Q1 2025, exceeding the Zacks Consensus Estimate of 74 cents and up from 70 cents in the prior-year quarter [1] - The company's total revenues grew by 43% year over year to $239.7 million, although this figure missed the Zacks Consensus Estimate by 1.8% [3] - A significant increase in total costs, which rose by 15.9% to $9.9 million, negatively impacted overall performance [3] Financial Performance - The adjusted EBITDA for Q1 2025 was $24.6 million, reflecting a 14.3% increase from the previous year [3] - The variable marketing margin increased to $77.7 million, up 11.9% year over year [3] - The company reported a GAAP net loss of $12.4 million, contrasting with a net income of $1 million in the same quarter last year [2] Cash and Debt Position - As of March 31, 2025, cash and cash equivalents stood at $126.4 million, an increase from $106.6 million as of December 31, 2024 [4] - Long-term debt rose to $387.7 million from $344.1 million as of December 31, 2024 [4] Future Outlook - For Q2 2025, total revenues are projected to be between $241 million and $248 million, with adjusted EBITDA expected to be in the range of $29-$31 million [6] - The 2025 revenue outlook has been updated to between $955 million and $995 million, down from the previous estimate of $985-$1.03 billion [7] - Adjusted EBITDA for 2025 is projected to be $116-$124 million, slightly revised from the earlier estimate of $116-$126 million [7] Strategic Insights - The company is focusing on inorganic growth to strengthen its online lending platform, with first-quarter results benefiting from increased EBITDA [8] - Efforts to diversify non-mortgage product offerings are expected to support future revenue growth [8]

Core Insights - Tree.com reported revenue of $239.7 million for the quarter ended March 2025, reflecting a year-over-year increase of 42.9% [1] - The company's EPS was $0.99, up from $0.70 in the same quarter last year, with an EPS surprise of +33.78% compared to the consensus estimate of $0.74 [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $244.03 million, resulting in a revenue surprise of -1.77% [1] Revenue Breakdown - Consumer segment revenue was $56 million, slightly below the average estimate of $56.87 million, with a year-over-year change of +8.7% [4] - Home segment revenue reached $37 million, exceeding the average estimate of $34.74 million, representing a year-over-year increase of +21.7% [4] - Insurance segment revenue was $146.70 million, below the average estimate of $152.75 million, but showed a significant year-over-year increase of +70.8% [4] Segment Profit Analysis - Home segment profit was reported at $13.10 million, surpassing the average estimate of $10.88 million [4] - Insurance segment profit was $38.70 million, which was lower than the estimated $41.58 million [4] - Consumer segment profit was $27.10 million, slightly below the average estimate of $27.92 million [4] Stock Performance - Tree.com shares have returned -3.5% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Company Performance - Tree.com reported quarterly earnings of $0.99 per share, exceeding the Zacks Consensus Estimate of $0.74 per share, and up from $0.70 per share a year ago, representing an earnings surprise of 33.78% [1] - The company posted revenues of $239.7 million for the quarter ended March 2025, which was 1.77% below the Zacks Consensus Estimate, but an increase from $167.8 million year-over-year [2] - Over the last four quarters, Tree.com has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - Tree.com shares have increased approximately 33.1% since the beginning of the year, contrasting with the S&P 500's decline of 5.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.85 on revenues of $244.31 million, and for the current fiscal year, it is $3.85 on revenues of $1.01 billion [7] Industry Outlook - The Financial - Mortgage & Related Services industry, to which Tree.com belongs, is currently ranked in the bottom 9% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Tree.com may be influenced by the overall outlook for the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1 [8]

Financial Data and Key Metrics Changes - All three business segments generated solid revenue growth in Q1 2025, but adjusted EBITDA came in just below forecast due to temporary regulatory headwinds in the insurance business and one-time expenses [5][6] - Insurance revenue grew 71% year over year in Q1 2025, despite challenges [6] Business Line Data and Key Metrics Changes - The insurance segment faced temporary regulatory challenges but is expected to recover, with continued annual revenue and VMD growth forecasted [6] - The lending segment benefited from growth in small business and personal loan products, with expectations for record revenue in small business for 2025 [7][36] - Home equity lending demand increased, driving performance in the home segment, despite high mortgage rates suppressing new home buyer demand [8] Market Data and Key Metrics Changes - The insurance segment was impacted by the FCC's pending one-to-one consent rule, which has since been rescinded, allowing for expected recovery [6] - The mortgage marketplace remains largely dormant, with significant growth potential once interest rates decrease [39] Company Strategy and Development Direction - The company is committed to managing operating expenses while investing in growth initiatives to achieve positive operating leverage [8] - The business model is resilient, allowing for adjustments in marketing strategies based on lender or carrier demand [23][67] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about strong adjusted EBITDA growth of 15% at the midpoint of the annual outlook [5] - There are no immediate concerns regarding tariffs impacting the business, although secondary effects from interest rates or inflation are monitored [9] - The company is prepared to manage costs and adjust marketing spend if necessary, ensuring flexibility in response to market conditions [66][67] Other Important Information - The company has reached a settlement related to litigation with QuoteWizard, with a liability of $19 million payable in installments [71] - The student loan business has been largely exited due to declining demand, but the company is prepared to re-enter if market conditions improve [77][80] Q&A Session Summary Question: Potential headwinds to profitability from tariffs - Management indicated that insurance clients feel confident about profitability and can manage potential tariff impacts without affecting marketing strategies [13][15] Question: Revised guidance and macroeconomic considerations - The company is not baking in macroeconomic changes into guidance but will monitor delinquencies and consumer spending closely [18][20] Question: Small business revenue projections - Small business revenue is expected to continue growing, with a strong direct sales team contributing to improved unit economics [31][36] Question: Mortgage marketplace growth potential - Management believes that a shift in mortgage rates to a five-handle could unlock significant growth in the mortgage marketplace [39] Question: VMM margin expectations in insurance - Long-term expectations for VMM margins are in the low to mid-30s as revenue normalizes [43] Question: Home segment margin sustainability - The home segment margin is expected to remain strong due to effective home equity monetization [50][51] Question: Consumer behavior changes post-quarter end - Consumer demand across most products remains strong, with some caution observed in mortgage purchase and refinance traffic [56][58] Question: Expense management in a downturn - The company has identified cost-saving levers and is prepared to respond quickly to any downturns in demand [66][67] Question: Update on the student loan business - The company has largely exited the student loan business due to low demand but is prepared to re-enter if conditions improve [77][80]

Financial Data and Key Metrics Changes - All three business segments generated solid revenue growth in Q1 2025, but adjusted EBITDA came in just below forecast due to temporary regulatory headwinds in the insurance business and one-time expenses related to benefits and legal fees [5][6] - The company is forecasting strong adjusted EBITDA growth of 15% at the midpoint of its annual outlook [5] Business Line Data and Key Metrics Changes - The insurance segment grew revenue by 71% year over year in Q1 2025 despite facing challenges from regulatory changes and a marketing correction from a specific carrier [6] - The consumer lending segment benefited from growth in small business and personal loan products, with expectations for record revenue in small business for 2025 [7][8] - The home segment performed well due to increased demand for home equity loans, although high mortgage rates continue to suppress demand for new home buyers and refinancing [8] Market Data and Key Metrics Changes - The insurance segment is expected to see annual revenue and VMD growth despite recent challenges, with optimism for improved performance in the second half of the year [21][22] - The mortgage marketplace remains largely dormant, with significant growth anticipated if interest rates drop to around 5% [39] Company Strategy and Development Direction - The company remains committed to managing operating expenses while investing in growth initiatives to achieve positive operating leverage on future revenue growth [10] - The focus on small business lending is expected to continue, with plans to grow the lender network and improve unit economics [30][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the remainder of 2025, highlighting the resilience of the business model and the ability to adjust to market changes [81] - There are no immediate concerns regarding tariffs impacting the business, although secondary effects from interest rates or inflation could arise [10] Other Important Information - The company has reached a settlement in principle regarding the QuoteWizard litigation, with a liability of $19 million on the balance sheet payable in three installments [69] Q&A Session Summary Question: Potential headwinds to profitability from tariffs - Management indicated that insurance carriers feel confident about their profitability and are monitoring the situation closely, suggesting that tariffs may not significantly impact marketing strategies [14][16] Question: Revised guidance and macroeconomic considerations - The company is not baking in any macroeconomic changes into its guidance but will monitor delinquencies and consumer spending closely [18][20] Question: Small business revenue expectations - Management confirmed strong growth in the small business segment, with expectations to maintain quarterly revenue levels throughout the year [30][35] Question: Mortgage marketplace growth potential - Management acknowledged the dormant state of the mortgage marketplace but indicated that a drop in interest rates could unlock significant growth [39] Question: Insurance segment VMM margin expectations - Management expects the VMM margin to normalize in the low to mid-30s over time, with continued improvement anticipated [44][46] Question: Home segment margin sustainability - The company expects home equity monetization to remain strong, supporting sustainable margins going forward [50][51] Question: Changes in consumer behavior and search activity - Management reported that consumer demand across most products remains strong, with some caution observed in the mortgage purchase and refinance traffic [55][56] Question: Expense management in a challenging macro environment - Management highlighted the ability to manage expenses effectively through zero-based budgeting and the flexibility to adjust marketing spend based on demand [64][66] Question: Update on the student loan business - The company has largely exited the student loan business due to declining demand but remains open to re-entering if market conditions improve [74][76]