LendingTree(US:TREE)2025-07-31 22:36PART I—FINANCIAL INFORMATION Item 1. Financial Statements The company's unaudited statements show increased assets, liabilities, and quarterly revenue, but a net loss for the six-month period Consolidated Balance Sheets Total assets and liabilities grew, driven by higher cash, receivables, and long-term debt Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $149,131 | $106,594 | | Accounts receivable, net | $126,187 | $97,790 | | Total current assets | $319,016 | $238,462 | | Goodwill | $381,539 | $381,539 | | Total assets | $835,765 | $767,674 | | Liabilities & Equity | | | | Total current liabilities | $260,592 | $240,476 | | Long-term debt | $385,110 | $344,124 | | Total liabilities | $717,653 | $658,853 | | Total shareholders' equity | $118,112 | $108,821 | Consolidated Statements of Operations and Comprehensive Income Quarterly net income rose, but a significant litigation expense drove a net loss for the six-month period despite revenue growth Quarterly Performance (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $250,116 | $210,140 | +19.0% | | Operating Income | $20,924 | $9,587 | +118.2% | | Net Income | $8,862 | $7,752 | +14.3% | | Diluted EPS | $0.65 | $0.58 | +12.1% | Year-to-Date Performance (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $489,844 | $377,908 | +29.6% | | Operating Income | $13,815 | $16,766 | -17.6% | | Net (Loss) Income | $(3,513) | $8,768 | N/A | | Diluted EPS | $(0.26) | $0.66 | N/A | - A significant litigation settlement expense of $15.2 million was recorded in the first six months of 2025, which was the primary driver of the net loss for the period11 Consolidated Statements of Cash Flows Operating cash flow improved significantly, while financing activities were driven by proceeds from a new term loan Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $27,743 | $765 | | Net cash used in investing activities | $(6,158) | $(5,474) | | Net cash provided by (used in) financing activities | $20,952 | $(40,578) | | Net increase (decrease) in cash | $42,537 | $(45,287) | Notes to Consolidated Financial Statements Notes detail segment revenue, debt structure, and a $19.0 million litigation settlement accrual Revenue by Segment (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Home | $77,437 | $62,609 | +23.7% | | Consumer | $118,552 | $107,352 | +10.4% | | Insurance | $293,809 | $207,943 | +41.3% | | Total Revenue | $489,844 | $377,908 | +29.6% | - The company repaid the remaining $95.3 million of its 0.50% Convertible Senior Notes due 2025 in cash upon maturity on July 15, 202583119 - An estimated liability of $19.0 million was accrued for the Mantha v. QuoteWizard.com, LLC class action lawsuit, with a settlement hearing scheduled for September 29, 2025110 Segment Profit (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Home | $26,202 | $18,899 | +38.6% | | Consumer | $59,207 | $54,352 | +8.9% | | Insurance | $78,706 | $69,814 | +12.7% | | Total Segment Profit | $164,091 | $143,010 | +14.7% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strong revenue growth across all segments, offset by a litigation expense, and improved liquidity Results of Operations Revenue grew across all segments, but a litigation contingency expense negatively impacted overall profitability - Insurance segment revenue grew 21% in Q2 2025, driven by a 19% increase in volume and a 2% increase in revenue per consumer148 - Home segment revenue increased 26% in Q2 2025, primarily due to a 38% increase in revenue from home equity loan products149150 - Consumer segment revenue rose 12% in Q2 2025, led by a 14% increase in personal loans revenue and a 61% increase in small business loans revenue152153155 - Selling and marketing expense increased by 19% in Q2 2025 to $176.8 million, in line with revenue growth, as the company adjusted advertising spend to meet network partner demand146160163 Segment Profit Total segment profit increased, led by strong growth in the Home and Consumer segments Segment Profit and Margin (Three Months Ended June 30) | Segment | Segment Profit 2025 (M) | Segment Profit 2024 (M) | YoY Change | Segment Margin 2025 | Segment Margin 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Home | $13.1 | $9.3 | +41% | 32% | 29% | | Consumer | $32.1 | $26.9 | +19% | 51% | 48% | | Insurance | $40.0 | $36.4 | +10% | 27% | 30% | | Total | $85.1 | $72.5 | +17% | 34% | 34% | Non-GAAP Measures (Adjusted EBITDA & Variable Marketing Margin) Adjusted EBITDA and Variable Marketing Margin both showed significant year-over-year improvement for the second quarter Adjusted EBITDA Reconciliation Summary (in thousands) | Period | Net Income (Loss) | Adjusted EBITDA | | :--- | :--- | :--- | | Q2 2025 | $8,862 | $31,793 | | Q2 2024 | $7,752 | $23,527 | | YTD 2025 | $(3,513) | $56,419 | | YTD 2024 | $8,768 | $45,078 | Financial Condition, Liquidity and Capital Resources The company's cash position strengthened, and it successfully repaid its 2025 convertible notes post-quarter - Cash and cash equivalents increased to $149.1 million as of June 30, 2025, from $106.6 million at December 31, 2024200 - In March 2025, the company drew the remaining $50.0 million available under its 2024 Term Loan facility201 - The outstanding $95.3 million principal of the 2025 Convertible Notes was fully repaid in cash on July 15, 2025202 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity, affecting both consumer demand and variable-rate debt costs - A hypothetical 100-basis point increase in interest rates would result in a $2.4 million annual effect on interest paid for the Credit Facility and a $1.6 million annual effect for the 2024 Term Loan217 - Changes in mortgage interest rates directly impact the company's Home segment by influencing consumer demand for refinancing and purchase loans, which affects lead volume and pricing218 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period, June 30, 2025220 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls221 PART II—OTHER INFORMATION Item 1. Legal Proceedings The company is involved in ordinary course legal proceedings, with details available in the financial statement notes - Information regarding legal proceedings is detailed in Note 13—Contingencies of the financial statements223 Item 1A. Risk Factors No material changes to the company's previously disclosed risk factors were reported for the period - The company reports no material changes to the risk factors disclosed in its 2024 Annual Report224 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No shares were repurchased during the quarter, with $96.7 million remaining under the authorized program - No shares were repurchased under the stock repurchase program during the quarter ended June 30, 2025226 - As of July 31, 2025, approximately $96.7 million remains authorized for share repurchases226 Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the quarter - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter231 Item 6. Exhibits This section lists all exhibits filed with the report, including required CEO and CFO certifications