LendingTree(TREE) - 2025 Q1 - Quarterly Report

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]