LendingTree(TREE) - 2025 Q3 - Quarterly Results

Financial Performance - Consolidated revenue for Q3 2025 was $307.8 million, an 18% increase year-over-year, marking the second highest quarterly revenue in the company's history [3] - The Insurance segment achieved record revenue of $203.5 million, up 20% from the prior year, with segment profit of $47.6 million, a 15% increase YoY [17] - The Consumer segment revenue grew 11% YoY to $66.2 million, driven by a 50% increase in revenue from the Small Business product [21] - The Home segment reported revenue of $38.1 million, an 18% increase YoY, with segment profit rising 27% to $11.8 million [24] - Adjusted EBITDA for Q3 2025 was $39.8 million, reflecting a 48% increase compared to the previous year [12] - Net income for the quarter was $10.2 million, or $0.73 per diluted share, representing a 118% increase YoY [10] - Revenue for Q3 2025 was $307.8 million, an increase from $260.8 million in Q3 2024, representing a growth of approximately 18% year-over-year [32] - Net income for Q3 2025 was $10,165,000, representing 3% of revenue, compared to a net loss of $57,978,000 in Q3 2024 [39] - Adjusted net income for Q3 2025 was $23,770,000, with adjusted net income per share at $1.70, compared to $0.80 in Q3 2024 [44] Debt and Cash Management - The company successfully refinanced its debt with a new $400 million five-year term loan, improving its net leverage to 2.6x, the lowest since 2020 [7] - The balance sheet remains strong with a cash balance of $69 million, allowing for enhanced capital flexibility and potential shareholder accretive strategies [25] - Cash and cash equivalents at the end of Q3 2025 were $68.6 million, down from $106.6 million at the beginning of the period [35] Marketing and Expenses - Variable marketing margin increased by 21% YoY to $93.2 million, with a margin percentage of 30% [11] - The company reported a significant increase in selling and marketing expenses, totaling $225.1 million for Q3 2025, compared to $193.5 million in Q3 2024 [37] - General and administrative expenses were $26,229,000 in Q3 2025, a decrease from $30,660,000 in Q1 2025 [39] - Product development expenses were $11,297,000 in Q3 2025, slightly down from $11,904,000 in Q1 2025 [39] - Interest expense increased to $17,907,000 in Q3 2025, compared to $10,060,000 in Q3 2024 [42] - Non-cash compensation for Q3 2025 was $5,002,000, compared to $6,859,000 in Q3 2024 [44] - The company reported a restructuring and severance expense of $80,000 in Q3 2025, down from $798,000 in Q1 2025 [39] - Litigation settlements and contingencies amounted to $69,000 in Q3 2025, compared to $3,762,000 in Q3 2024 [44] Future Outlook - The company expects continued strength in the insurance cycle into 2026, following previous disruptions due to inflation in auto loss costs [4] - The company expects full-year 2025 revenue to be between $1.08 billion and $1.09 billion, with an implied Q4 revenue of $280 million to $290 million [28] - Forward-looking statements highlight potential risks including adverse mortgage market conditions, interest rates, and competition, which could impact future performance [60] - The company emphasizes the importance of maintaining brand recognition and attracting consumers cost-effectively as part of its strategic outlook [60] - The ability to develop new products and enhance existing services is crucial for the company's future growth and competitiveness [60] - The company faces risks related to regulatory compliance and potential liabilities, which could affect operational stability and financial results [60] - Management acknowledges the need for successful integration of potential acquisitions to enhance overall business performance [60] Financial Metrics and Adjustments - Variable Marketing Margin for Q3 2025 was $214.6 million, compared to $183.6 million in Q3 2024, indicating a year-over-year increase of about 17% [37] - Adjusted EBITDA for Q3 2025 was $29.5 million to $31.5 million, reflecting a significant improvement from the previous year's loss [28] - Adjusted EBITDA for Q3 2025 was $39,795,000, which is 13% of revenue, compared to 10% in Q3 2024 [42] - Adjusted net income per share is calculated by dividing adjusted net income by adjusted weighted average diluted shares outstanding, with specific treatment for potentially dilutive securities during GAAP loss periods [55] - LendingTree provides GAAP measures alongside non-GAAP measures to ensure transparency and comparability, highlighting the importance of reconciling items [56] - There were no adjustments for one-time items in the periods presented, indicating stable financial reporting without unusual expenses [57] - Non-cash compensation expenses, primarily from stock grants and options, are excluded from adjusted EBITDA and adjusted net income calculations [58] - Amortization of intangibles, related to acquisitions, is excluded from adjusted EBITDA, reflecting the company's focus on cash-based performance metrics [59]