LendingTree Inc
For the period ended Jun 30, 2024. Filed Jul 29, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 29, 2024
TREE$37.01-4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0001434621-24-000013
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-29.
0001434621-24-000020
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 137 current paragraphs.
70 unchanged; 38 reworded; 28 added; 14 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
We added 0.7 million net new users in the second quarter of 2024, bringing cumulative active users to 29.5 million as of June 30, 2024. We calculate the number of Spring users at a period end as the number of users that had an active account at any point during the quarter that includes the period end date. Users that deactivated their accounts prior to the most recent quarter are no longer considered in the user base at the end of the most recent quarter. We attribute approximately $6.5 million of revenue, or 3% of total revenue, in the second quarter of 2024 to registered Spring users who initiated their transaction from the Spring platform. During the second quarter of 2024, approximately 0.3 million Spring users initiated a transaction from the Spring platform that contributed to revenue.
Current report
Our discussion within Revenue provides the details of consolidated revenue by segment and significant products. In this section, we describe overall changes in revenue in our segments and significant products within each segment and increases or decreases in revenue from the prior period. We also provide insight into how changes in price and volume in each significant product impacted product revenue.
Current report
Our Segment Profit is a discussion of profitability within each segment of the business. It is impacted by segment revenues as well as segment cost of revenue and marketing expenses. In Segment Profit, we provide a discussion of the business within each segment, addressing both company and market impacts on the profitability of each segment in addition to a discussion of segment margin.
Current report
Revenue from our personal loans product decreased $1.2 million, or 4%, to $26.9 million in the second quarter of 2024 from $28.1 million in the second quarter of 2023. The decrease in revenue was due to a 19% decrease in revenue earned per consumer, representing $5.4 million of the decrease, partially offset by an 18% increase in volume, representing $4.2 million of an increase. Revenue from our personal loans product decreased $4.7 million, or 9%, to $47.1 million in the first six months of 2024 from $51.7 million in the first six months of 2023. The decrease in revenue was due to a 16% decrease in revenue earned per consumer, representing $8.2 million of the decrease, partially offset by an 8% increase in volume, representing $3.5 million of an increase. We measure volume for our personal loans product as the number of unique consumers completing request forms.
Current report
Revenue from our mortgage products decreased $6.1 million, or 37%, to $10.2 million in the second quarter of 2024 from $16.2 million in the second quarter of 2023. The decrease in revenue was due to a 31% decrease in volume, representing $4.6 million of the decrease, and a 9% decrease in revenue earned per consumer, representing $1.5 million of the decrease.
Current report
Revenue from our mortgage products decreased $16.4 million, or 45%, to $19.8 million in the first six months of 2024 from $36.2 million in the first six months of 2023. The decrease in revenue was due to a 37% decrease in volume, representing $11.8 million of the decrease, and a 13% decrease in revenue earned per consumer, representing $4.6 million of the decrease. We measure volume for our mortgage products as the number of consumers completing request forms.
Current report
Revenue from our home equity loans product decreased $3.3 million, or 13%, to $22.0 million in the second quarter of 2024 from $25.3 million in the second quarter of 2023. The decrease in revenue was due to a 17% decrease in revenue earned per consumer, representing $4.3 million of the decrease, partially offset by a 5% increase in volume, representing a $1.0 million increase. Revenue from our home equity loans product decreased $6.2 million, or 13%, to $42.8 million in the first six months of 2024 from $49.0 million in the first six months of 2023. The decrease in revenue was due to a 20% decrease in revenue earned per consumer, representing $9.6 million of the decrease, partially offset by a 9% increase in volume, representing a $3.4 million increase. We measure volume for our home equity loans and lines of credit products as the number of consumers completing request forms.
Current report
Revenue from our Insurance segment increased $63.7 million, or 109%, to $122.1 million in the second quarter of 2024 from $58.4 million in the second quarter of 2023. The increase in revenue was due to a 69% increase in revenue earned per consumer, representing $40.5 million of the increase, and a 23% increase in volume, representing $23.2 million of the increase. Revenue from our Insurance segment increased $72.5 million, or 53%, to $207.9 million in the first six months of 2024 from $135.5 million in the first six months of 2023. The increase in revenue was due to a 29% increase in revenue earned per consumer, representing $39.8 million of the increase, and a 19% increase in volume, representing $32.7 million of the increase. We measure volume for our insurance product as the number of consumer request forms and in certain cases re-engagement with a consumer, the number of such subsequent consumer engagements through our platform.
Current report
General and administrative expense decreased in the second quarter of 2024 from the second quarter of 2023 primarily due to a decrease in compensation and benefits of $1.7 million and decreases in facilities and fees and other charges of $0.5 million, and $0.9 million, respectively. General and administrative expense decreased in the first six months of 2024 from the first six months of 2023 primarily due to a decrease in compensation and benefits of $5.4 million, a decrease in fees and other charges of $2.0 million and a decrease in facilities expenses of $1.2 million. Additionally, we incurred a $4.2 million loss on the impairment of assets for our Ovation business in the first six months of 2023.
Current report
General and administrative expense as a percentage of revenue decreased to 13% in the second quarter of 2024 compared to 16% in the second quarter of 2023, and decreased to 14% in the first six months of 2024 compared to 17% in the first six months of 2023.
Current report
Amortization of intangibles
Current report
The decrease in amortization of intangibles in the second quarter and first six months of 2024 compared to the second quarter and first six months of 2023 was primarily due to certain intangible assets associated with our recent business acquisitions becoming fully amortized.
Current report
We made the decision to close the Ovation credit services business by mid-2023 and all operations ceased in August 2023. We incurred $2.1 million of restructuring expense related to the Ovation closure in the second quarter of 2023 in connection with cash expenditures for employee separation costs.
Current report
Interest (expense) income
Current report
In March 2024, we drew $125.0 million on a first lien term loan facility and incurred $4.0 million and $4.2 million of interest expense in the second quarter and first six months of 2024.
Current report
In the second quarter of 2024, we repurchased approximately $161.3 million in principal amount of our 2025 Notes for $151.7 million plus accrued and unpaid interest of approximately $0.3 million. As a result of the repurchase, we recognized a gain on the extinguishment of $9.6 million and a loss on the write-off of unamortized debt issuance costs of $1.0 million, both of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.
Current report
Home segment revenue decreased 23% to $32.2 million in the second quarter of 2024 from the second quarter of 2023 and segment profit decreased 30% to $9.3 million in the second quarter of 2024 from the second quarter of 2023. Segment margin declined to 29% in the second quarter of 2024 compared to 32% in the second quarter of 2023, primarily due to a decline in revenue earned per consumer, due to a decline close rates at our lender partners.
Current report
Home equity revenue of $22.0 million in the second quarter of 2024 decreased $3.3 million from $25.3 million in the second quarter of 2023. Volume of home equity consumers completing request forms increased 5% in the second quarter of 2024 compared to the second quarter of 2023, however, the 17% decline in revenue earned per consumer outpaced this volume growth.
Current report
Within Home, our core mortgage business generated revenue of $10.2 million in the second quarter of 2024, down 37% from the second quarter of 2023. Our refinance product within our mortgage business matches consumers in the market looking to refinance their existing mortgages with our network lenders. Our purchase product within our mortgage business matches consumers in the market looking to buy a new home with our network lenders. Our mortgage business is directly impacted by the mortgage market in which we participate.
Current report
We believe financial market expectations for decreases in interest rates later this year would likely benefit the mortgage and home equity lending environment and our Home segment.
Current report
Our Consumer segment revenue decreased 32% to $55.9 million in the second quarter of 2024 from the second quarter of 2023, and segment profit decreased 34% to $26.9 million in the second quarter of 2024 from the second quarter of 2023 due to the decline in revenue. Segment margin was consistent in the second quarter of 2024 compared to the second quarter of 2023.
Current report
Personal loans revenue of $26.9 million in the second quarter of 2024 decreased 4% from the second quarter of 2023 as lending standards remain restrictive at our lender partners. However, personal loans revenue increased 34% in the second quarter of 2024 from the first quarter of 2024 as our targeted marketing investment in personal loans increased volume amid stable credit standards.
Current report
See the section titled "Revenue" above for additional discussion of declines in product revenues within the Consumer segment.
Current report
Insurance revenue increased 109% to $122.1 million in the second quarter of 2024 from the second quarter of 2023 and segment profit increased 47% to $36.4 million in the second quarter of 2024 from the second quarter of 2023. Carrier demand for new auto insurance customers has been strong, with volume increasing 23% in the second quarter of 2024 compared to the second quarter of 2023, as two years of compounded premium rate increases combined with declines in the price of used vehicles and replacement parts has created a favorable underwriting environment.
Current report
Segment margin declined to 30% in the second quarter of 2024 from 42% in the second quarter of 2023. In 2023, we were able to exit from our highest cost marketing channels and continue to meet the decreased level of demand. In the second quarter of 2024, we re-entered those marketing channels to fill the increase in carrier demand, which has resulted in lower segment profit margin.
Current report
We expect our Insurance segment to have continued sequential revenue growth for the remainder of the year.
Current report
In the second quarter of 2024, we repurchased approximately $161.3 million in principal amount of our 2025 Notes for $151.7 million plus accrued and unpaid interest of approximately $0.3 million. As a result of the repurchase, we recognized a gain on the extinguishment of $9.6 million and a loss on the write-off of unamortized debt issuance costs of $1.0 million, both of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.
Current report
As of June 30, 2024, we have $122.9 million outstanding on the 2025 Notes. We intend to use cash on hand, available borrowings from the 2024 Term Loan, and future cash flows from operations for the repayment of the 2025 Notes.
Removed paragraphs (14)
Previous report
We continued to grow our user base and added 0.6 million new users in the first quarter of 2024, bringing cumulative sign-ups to 28.8 million at March 31, 2024.
Previous report
Our focus on improving the Spring experience for consumers remains a top priority. Becoming an integrated digital advisor will greatly improve the consumer experience, which we expect to result in higher levels of engagement improved membership growth rates, and ultimately stronger financial results.
Previous report
Revenue from our personal loans product decreased $3.5 million, or 15%, to $20.1 million in the first quarter of 2024 from $23.6 million in the first quarter of 2023 primarily due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer.
Previous report
Revenue from our Insurance segment increased $8.8 million, or 11%, to $85.9 million in the first quarter of 2024 from $77.1 million in the first quarter of 2023 due to an increase in the number of consumers seeking insurance, partially offset by a decrease in revenue earned per consumer.
Previous report
General and administrative expense decreased $10.9 million in the first quarter of 2024 compared to the first quarter of 2023. Compensation and benefits and bad debt expense decreased in the first quarter of 2024 compared to the first quarter of 2023 by $3.8 million and $1.1 million, respectively. In the first quarter of 2023 we incurred a $4.2 million loss on the impairment of assets for our Ovation business.
Previous report
General and administrative expense as a percentage of revenue in the first quarter of 2024 was 15% compared to 18% for the first quarter of 2023.
Previous report
Interest income/expense
Previous report
Revenue in the Home segment decreased 30% to $30.4 million in the first quarter of 2024, with segment profit of $9.6 million in the first quarter of 2024, a decrease of 36% from the first quarter of 2023. Despite the decrease in revenue in the first quarter of 2024, our variable marketing model generated a 32% segment margin, which was down from 35% in the first quarter of 2023. Our home equity business again produced the majority of the Home segment's revenue, declining 12% in the first quarter of 2024 from the first quarter of 2023. According to the National Association of Realtors, the inventory of existing homes for sale was up 14% in the first quarter of 2024 compared to the first quarter of 2023. This remains a depressed level historically, but may indicate that sellers are beginning to adjust to higher mortgage rates and prioritizing normal life changes that require moves.
Previous report
Consumer demand to borrow against a near record level of equity in their homes remains strong, with volume for the product increasing 14% in the first quarter of 2024 compared to the first quarter of 2023. We expect the home equity product will continue to account for the majority of Home revenue for the remainder of the year.
Previous report
Revenue in our Consumer segment decreased 35% to $51.5 million in the first quarter of 2024 from the first quarter of 2023, with segment profit $27.4 million in the first quarter of 2024 a decrease of 21% from the first quarter of 2023. Our Consumer segment margin increased to 53% in the first quarter of 2024 from 44% in the first quarter of 2023 due to a mix-shift towards higher earning products and lower partner demand allowing us to decrease usage of our highest cost marketing channels.
Previous report
Revenue from our personal loan product of $20.1 million decreased 15% in the first quarter of 2024 from the first quarter of 2023 as lending standards remained restrictive, although this tightening has remained stable for the past several months.
Previous report
Small business revenue declined 18% in the first quarter of 2024 from the first quarter of 2023. The causes were similar to those experienced in personal loans. Tighter credit conditions are decreasing conversion rates at our lending partners.
Previous report
Insurance revenue of $85.9 million in the first quarter of 2024 increased 11% from the first quarter of 2023 as our carrier partners began to prioritize new customer acquisition after spending most of the last two years increasing premium rates for new policies. Segment profit of $33.4 million in the first quarter of 2024 increased 11% from the first quarter of 2023 as segment profit margin remained consistent at 39%. We believe we are in the beginning stages of a broad recovery in personal insurance marketing spend by our partners.
Previous report
According to the Bureau of Labor Statistics, the cost of consumer auto insurance increased 22% in March 2024 compared to March 2023. Consumers have been coming to us in record numbers to obtain new quotes as these premium increases are communicated to them. However, until recently carriers have shown limited demand to provide new customers quotes. We expect significantly higher prices to consumers will drive an increase in switching between insurers, which in turn will encourage carriers to advertise more aggressively with us to defend and grow market share.
Reworded paragraphs (38)
Previous wording
We operate what we believe to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. We offer consumers tools and resources, including free credit scores, that facilitate comparison-shopping for mortgage loans, home equity loans and lines of credit, auto loans, credit cards, deposit accounts, personal loans, student loans, small business loans, insurance quotes, sales of insurance policies and other related offerings. We primarily seek to match to match in-market consumers with multiple providers on its marketplace who can provide them with competing quotes for loans, deposit products, insurance or other related offerings they are seeking. We also serve as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries we generate with these providers.
Current wording
We operate what we believe to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. We offer consumers tools and resources, including free credit scores, that facilitate comparison-shopping for mortgage loans, home equity loans and lines of credit, auto loans, credit cards, deposit accounts, personal loans, student loans, small business loans, insurance quotes, sales of insurance policies and other related offerings. We primarily seek to match in-market consumers with multiple providers on our marketplace who can provide them competing quotes for loans, deposit products, insurance or other related offerings they are seeking. We also serve as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries we generate with these providers.
Previous wording
Our Spring platform offers a personalized comparison-shopping experience, financial health advice and credit simulations by providing free credit scores and credit score analysis. This authenticated and secure platform enables us to monitor consumers' credit profiles, identify and alert them to changes in their financial health, and to recommend loans and other offerings on our marketplace that may be more favorable than the terms they may have at a given point in time. Customers can track the progress of their financial health over time based on actions they have taken and see recommended credit score improvement actions, and loans or other products offered by LendingTree.
Current wording
Our Spring TM platform offers a personalized comparison-shopping experience, financial health advice and credit simulations by providing free credit scores and credit score analysis. This authenticated and secure platform enables us to monitor consumers' credit profiles, identify and alert them to changes in their financial health, and to recommend loans and other offerings on our marketplace that may be more favorable than the terms they may have at a given point in time. Customers can track the progress of their financial health over time based on actions they have taken and see recommended credit score improvement actions, and loans or other products offered by LendingTree.
Previous wording
During the first quarter of 2024, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending partners. In our Home segment, mortgage rates have remained relatively consistent in the first quarter of 2024 compared to the fourth quarter of 2023 and the first quarter of 2023, but nearly doubled compared to the first quarter of 2022. The increased mortgage rates continue to cause reduced refinance volumes and continue to put pressure on purchase activity. In our Insurance segment, demand from our carrier partners has increased and we continue to be optimistic about 2024.
Current wording
During 2024, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending partners. In our Home segment, mortgage rates have remained relatively consistent in the first and second quarters of 2024 compared to the fourth quarter of 2023, but nearly doubled compared to the first quarter of 2022. The increased mortgage rates continue to cause reduced refinance volumes and continue to put pressure on purchase activity. In our Insurance segment, demand from our carrier partners has increased significantly and we continue to be optimistic about the second half of 2024.
Previous wording
According to Freddie Mac, the monthly average 30-year mortgage interest rates remained consistent at 6.82% in December 2023 and in March 2024. On a quarterly basis, 30-year mortgage interest rates decreased in the first quarter of 2024 to an average 6.75%, from 7.29% in the fourth quarter of 2023. The quarterly average was up slightly in the first quarter of 2024 compared to 6.36% in the first quarter of 2023.
Current wording
According to Freddie Mac, the monthly average 30-year mortgage interest rates increased slightly from a monthly average of 6.82% in December 2023 to a monthly average of 6.92% in June 2024. On a quarterly basis, 30-year mortgage interest rates in the second quarter of 2024 averaged 6.99%, compared to 6.49% in the second quarter of 2023 and 7.29% in the fourth quarter of 2023.
Previous wording
Typically, as mortgage interest rates rise, there are fewer consumers in the marketplace seeking refinancings and, accordingly, the mix of mortgage origination dollars will move toward purchase mortgages. According to Mortgage Bankers Association (“MBA”) data, total refinance origination dollars increased to 23% of total mortgage origination dollars in the first quarter of 2024 compared to 19% in the fourth quarter of 2023 and 20% in the first quarter of 2023. In the first quarter of 2024, total refinance origination dollars increased 15% from the fourth quarter of 2023 and increased 30% from the first quarter of 2023. Industry-wide mortgage origination dollars in the first quarter of 2024 decreased 6% from the fourth quarter of 2023, but increased 13% from first quarter of 2023.
Current wording
Typically, as mortgage interest rates rise, there are fewer consumers in the marketplace seeking refinancings and, accordingly, the mix of mortgage origination dollars will move toward purchase mortgages. According to Mortgage Bankers Association (“MBA”) data, total refinance origination dollars increased to 22% of total mortgage origination dollars in the second quarter of 2024 compared to 19% in the fourth quarter of 2023 and 20% in the second quarter of 2023. In the second quarter of 2024, total refinance origination dollars increased 24% from the fourth quarter of 2023 and increased 1% from the second quarter of 2023. Industry-wide mortgage origination dollars in the second quarter of 2024 increased 8% from the fourth quarter of 2023 and decreased 7% from second quarter of 2023.
Previous wording
According to MBA projections, the mix of mortgage origination dollars is expected to continue to be weighted towards purchase mortgages with the refinance share representing approximately 23% for 2024 compared to 19% in 2023.
Current wording
According to MBA projections, the mix of mortgage origination dollars is expected to continue to be weighted towards purchase mortgages with the refinance share representing approximately 24% for 2024 compared to 19% in 2023.
Previous wording
According to Fannie Mae data, existing home sales increased 8% in the first quarter of 2024 compared to the fourth quarter of 2023, and decreased 3% compared to the first quarter of 2023. Fannie Mae predicts an overall increase in existing-home sales of approximately 4.3% in 2024 compared to 2023.
Current wording
According to Fannie Mae data, existing home sales increased approximately 5% in the second quarter of 2024 compared to the fourth quarter of 2023, and decreased approximately 3% compared to the second quarter of 2023. Fannie Mae predicts an overall increase in existing-home sales of approximately 2% in 2024 compared to 2023.
Previous wording
We consider certain metrics related to Spring set forth below to help us evaluate our business and growth trends and assess operational efficiencies. The calculation of the metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts or investors.
Current wording
We consider certain metrics related to LendingTree Spring TM ("Spring") set forth below to help us evaluate our business and growth trends and assess operational efficiencies. We believe our Spring platform drives repeat user engagement resulting in lower acquisition costs and increases consumer lifetime value. The calculation of the metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts or investors.
Previous wording
On March 24, 2023, we committed to a workforce reduction plan (the “Reduction Plan”) to reduce operating costs. The Reduction Plan included the elimination of approximately 13% of the Company’s workforce. As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction, $4.3 million of which was incurred in the first quarter of 2023. Part of this Reduction Plan included the shut down of our LendingTree customer call center as well as our Medicare insurance agency operations within QuoteWizard. We estimate the Reduction Plan reduced annual compensation expense by approximately $14 million, comprised of $2 million in cost of revenue, $4 million in selling and marketing expense, $3 million in general and administrative expense, and $5 million in product development.
Current wording
On March 24, 2023, we committed to a workforce reduction plan (the “Reduction Plan”), to reduce operating costs, which included the elimination of approximately 13% of the Company’s workforce. As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction, $4.3 million of which was incurred in the first quarter of 2023 and $1.0 million was incurred in the second quarter of 2023. Part of this Reduction Plan included the shut down of our LendingTree customer call center as well as our Medicare insurance agency operations within QuoteWizard. We estimate the Reduction Plan reduced annual compensation expense by approximately $14 million, comprised of $2 million in cost of revenue, $4 million in selling and marketing expense, $3 million in general and administrative expense, and $5 million in product development.
Previous wording
Separately, in 2023, we made the decision to close our Ovation credit services business, an asset group within our Consumer segment, by mid- 2023. As a result, the Company recorded an asset impairment charge of $4.2 million in the first quarter of 2023 related to the write-off of certain long-term assets. We acquired Ovation in 2018 to better serve those customers who come to LendingTree and receive suboptimal offers of credit. The business grew for a number of years before running into challenges in the wake of COVID-19, and more recently the industry has faced increased regulatory pressure. The business is capital-intensive, requires elevated overhead, and future prospects were becoming uncertain.
Current wording
Separately, in 2023, we made the decision to close our Ovation credit services business, an asset group within our Consumer segment, by mid- 2023. As a result, the Company recorded an asset impairment charge of $4.2 million in the first quarter of 2023 related to the write-off of certain long-term assets. Additionally, we incurred $2.1 million in severance charges in the second quarter of 2023 in connection with cash expenditures for employee separation costs. We acquired Ovation in 2018 to better serve those customers who come to LendingTree and receive suboptimal offers of credit. The business grew for a number of years before running into challenges in the wake of COVID-19, and more recently the industry has faced increased regulatory pressure. The business is capital-intensive, requires elevated overhead, and future prospects were becoming uncertain.
Previous wording
In April 2024, we repurchased approximately $37.7 million in principal amount of our 0.50% Convertible Senior Notes due July 15, 2025, through individual privately-negotiated transactions with certain holders of such notes, for approximately $35.3 million in cash plus accrued and unpaid interest.
Current wording
In July, we repurchased approximately $7.6 million in principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 (the "2025 Notes"), through individual privately-negotiated transactions with certain holders of such notes, for approximately $7.2 million in cash.
Previous wording
Results of Operations for the Three Months ended March 31, 2024 and 2023
Current wording
Results of Operations for the Three and Six Months ended June 30, 2024 and 2023
Previous wording
Revenue decreased in the first quarter of 2024 compared to the first quarter of 2023 due to decreases in our Consumer and Home segments, partially offset by an increase in our Insurance segment.
Current wording
Revenue increased in the second quarter of 2024 compared to the second quarter of 2023 due to increases in our Insurance segment partially offset by decreases in our Home and Consumer segments. Revenue decreased in the first six months of 2024 compared to the first six months of 2023 due to decreases in our Home and Consumer segments, partially offset by increases in our Insurance segment.
Previous wording
Our Consumer segment includes the following products: credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products such as credit repair and debt settlement. The credit repair business was closed at the end of the second quarter of 2023. Many of our Consumer segment products are not individually significant to revenue. Revenue from our Consumer segment decreased $28.3 million, or 35%, in the first quarter of 2024 from the first quarter of 2023 primarily due to decreases in our credit cards and other credit products.
Current wording
Our Consumer segment includes the following products: credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products such as credit repair and debt settlement. The credit repair business was closed at the end of the second quarter of 2023. Many of our Consumer segment products are not individually significant to revenue. Revenue from our Consumer segment decreased $26.6 million, or 32%, in the second quarter of 2024 from the second quarter of 2023 and decreased $54.8 million, or 34%, in the first six months of 2024 from the first six months of 2023 primarily due to decreases in our credit cards and other credit products.
Previous wording
For the periods presented, no other products in our Consumer segment represented more than 10% of revenue; however, certain other Consumer products experienced notable changes. Revenue from credit cards decreased $10.5 million, or 57%, in the first quarter of 2024 from the first quarter of 2023 primarily due to decreases in the number of consumer clicks and in revenue earned per click. Revenue from other credit products decreased $7.4 million, or 65%, in the first quarter of 2024 from the first quarter of 2023 due to the closure of our Ovation credit services business at the end of the second quarter of 2023. Revenue from small business decreased $3.0 million, or 18%, in the first quarter of 2024 from the first quarter of 2023 due to a decrease in the number of consumers completing request forms partially offset by an increase in revenue earned per consumer.
Current wording
For the current periods, no other products in our Consumer segment represented more than 10% of revenue; however, certain other Consumer products experienced notable changes. Revenue from our credit cards product decreased $15.6 million, or 74%, in the second quarter of 2024 compared to the second quarter of 2023 and decreased $26.1 million, or 66%, in the first six months of 2024 compared to the first six months of 2023 primarily due to a decrease in volume. We measure volume for our credit cards product as the number of consumers clicking through to a card issuer. Revenue from our other credit products decreased $4.6 million, or 44%, in the second quarter of 2024 compared to the second quarter of 2023 and decreased $12.0 million, 55%, in the first six months of 2024 compared to the first six months of 2023 due to the closure of our Ovation credit services business at the end of the second quarter of 2023.
Previous wording
Our Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and lines of credit. Revenue from our Home segment decreased $13.2 million, or 30%, in the first quarter of 2024 from the first quarter of 2023 primarily due to decreases in revenue from our refinance and purchase mortgage products.
Current wording
Our Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and lines of credit. Revenue from our Home segment decreased $9.4 million, or 23%, in the second quarter of 2024 from the second quarter of 2023, and decreased $22.6 million, or 27%, in the first six months of 2024 from the first six months of 2023 due to decreases in revenue from each of our Home products.
Previous wording
Revenue from our mortgage products decreased $10.3 million, or 52%, to $9.6 million in the first quarter of 2024 from $20.0 million in the first quarter of 2023. Revenue from our purchase mortgage product decreased $5.9 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer. Revenue from our refinance mortgage product decreased $4.4 million in the first quarter of 2024 compared to the first quarter of 2023 due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer. Increased mortgage rates continue to cause reduced refinance volumes and continue to put pressure on purchase activity. Revenue from our home equity loans product decreased $2.9 million, or 12%, to $20.8 million in the first quarter of 2024 from $23.7 million in the first quarter of 2023.
Current wording
Revenue from our purchase mortgage product decreased $3.6 million in the second quarter of 2024 compared to the second quarter of 2023, and decreased $9.4 million in the first six months of 2024 compared to the first six months of 2023 primarily due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer. Revenue from our refinance mortgage product decreased $2.5 million in the second quarter of 2024 compared to the second quarter of 2023 and decreased $6.9 million in the first six months of 2024 compared to the first six months of 2023 due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer, as interest rates have risen.
Previous wording
Cost of revenue decreased in the first quarter of 2024 from the first quarter of 2023 by $5.2 million, primarily due to a decrease in compensation and benefits of $4.3 million. The decrease is primarily due to the Reduction Plan at the end of the first quarter of 2023, including shutting down the LendingTree call customer call center and the closure of our Ovation credit services business at the end of the second quarter of 2023.
Current wording
Cost of revenue remained relatively consistent in the second quarter of 2024 from the second quarter of 2023. Cost of revenue decreased $6.1 million in the first six months of 2024 from the first six months of 2023 primarily due to a decrease in compensation and benefits of $4.8 million and a decrease in customer service fees of $0.5 million. The decreases in the first six months are primarily due to the Reduction Plan at the end of the first quarter of 2023, including shutting down the LendingTree customer call center, and the closure of the credit repair business at the end of the second quarter of 2023.
Previous wording
Cost of revenue as a percentage of revenue decreased to 5% in the first quarter of 2024 compared to 7% in the first quarter of 2023.
Current wording
Cost of revenue as a percentage of revenue decreased to 4% in the second quarter of 2024 compared to 5% in the second quarter of 2023, and decreased to 4% in the first six months of 2024 compared to 6% in the first six months of 2023.
Previous wording
Selling and marketing expense decreased in the first quarter of 2024 compared to the first quarter 2023 by $28.9 million primarily due to the changes in advertising and promotional expense discussed below. Additionally, compensation and benefits decreased $2.9 million in the first quarter of 2024 compared to the first quarter 2023.
Current wording
Selling and marketing expense increased in the second quarter of 2024 compared to the second quarter 2023 by $32.3 million, and increased $3.4 million in the first six months of 2024 compared to the first six months of 2023 primarily due to the changes in advertising and promotional expense discussed below. Additionally, compensation and benefits decreased $1.0 million in the second quarter of 2024 compared to the second quarter of 2023 and decreased $3.8 million in the first six months of 2024 compared to the first six months of 2023.
Previous wording
We adjusted our advertising expenditures in the first quarter of 2024 compared to the first quarter of 2023 in response to changes in Network Partner demand on our marketplace. We will continue to adjust selling and marketing expenditures dynamically in response to anticipated revenue opportunities.
Current wording
We adjusted our advertising expenditures in the second quarter and first six months of 2024 compared to the second quarter and first six months of 2023 in response to changes in Network Partner demand on our marketplace. We will continue to adjust selling and marketing expenditures dynamically in response to anticipated revenue opportunities.
Previous wording
Product development expense decreased in the first quarter of 2024 compared to the first quarter of 2023 primarily due to the Reduction Plan at the end of the first quarter of 2023. We continued to invest in internal development of new and enhanced features, functionality and business opportunities that we believe will enable us to better and more fully serve consumers and Network Partners.
Current wording
Product development expense remained consistent in the second quarter of 2024 compared to the second quarter of 2023. Product development expense decreased in the first six months of 2024 compared to the first six months of 2023 primarily due to the Reduction Plan at the end of the first quarter of 2023. We continued to invest in internal development of new and enhanced features, functionality and business opportunities that we believe will enable us to better and more fully serve consumers and Network Partners.
Previous wording
On March 24, 2023, we committed to the Reduction Plan that reduced operating costs. The Reduction Plan included the elimination of approximately 13% of the Company’s workforce. As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction, consisting of cash expenditures for employee separation costs of approximately $4.3 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $1.0 million. We incurred restructuring expense of $4.3 million in the first quarter of 2023.
Current wording
On March 24, 2023, we committed to the Reduction Plan to reduce operating costs, which included the elimination of approximately 13% of the Company’s workforce. As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction, consisting of cash expenditures for employee separation costs of approximately $4.3 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $1.0 million. We incurred restructuring expense of $4.3 million in the first quarter of 2023 and an additional $1.0 million of restructuring expense in the second quarter of 2023 related to the Reduction Plan.
Previous wording
In the first quarter of 2023, we repurchased approximately $190.6 million in principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 for $156.3 million plus accrued and unpaid interest of approximately $0.1 million. As a result of the repurchase, we recognized a gain on the extinguishment of $34.3 million, a loss on the write-off of unamortized debt issuance costs of $2.4 million, and incurred debt repayment costs of $1.0 million, all of which are included in interest (expense) income, net in the consolidated statement of operations and comprehensive income. See Note 12—Debt for additional information.
Current wording
In the first quarter of 2023, we repurchased approximately $190.6 million in principal amount of our 2025 Notes for $156.3 million plus accrued and unpaid interest of approximately $0.1 million. As a result of the repurchase, we recognized a gain on the extinguishment of $34.3 million, a loss on the write-off of unamortized debt issuance costs of $2.4 million, and incurred debt repayment costs of $1.0 million, all of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.
Previous wording
For the first quarter of 2024 and 2023, the effective tax rate varied from the federal statutory rate of 21% primarily due to the change in the valuation allowance, net of the current period change in tax effected net indefinite-lived intangibles.
Current wording
For the second quarter and first six months of 2024 and 2023, the effective tax rate varied from the federal statutory rate of 21% primarily due to the change in the valuation allowance, net of the current period change in tax effected net indefinite-lived intangibles.
Previous wording
The following is a reconciliation of net income, the most directly comparable GAAP measure, to variable marketing margin:
Current wording
The following is a reconciliation of net income (loss), the most directly comparable GAAP measure, to variable marketing margin:
Previous wording
The following table is a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA.
Current wording
The following table is a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA.
Previous wording
As of March 31, 2024, we had $230.7 million of cash and cash equivalents, compared to $112.1 million of cash and cash equivalents as of December 31, 2023.
Current wording
As of June 30, 2024, we had $66.8 million of cash and cash equivalents, compared to $112.1 million of cash and cash equivalents as of December 31, 2023.
Previous wording
We expect our cash and cash equivalents and cash flows from operations to be sufficient to fund our operating needs for the next twelve months and beyond. Our credit facilities described below are additional potential sources of liquidity. We will continue to monitor the impact of the current economic conditions, including interest rates, and inflation on our liquidity and capital resources.
Current wording
We expect our cash and cash equivalents, cash flows from operations and available borrowings under our credit facilities to be sufficient to fund our operating needs for the next twelve months and beyond. We will continue to monitor the impact of the current economic conditions, including interest rates and inflation on our liquidity and capital resources.
Previous wording
On September 15, 2021, we entered into a credit agreement (the “Credit Agreement”), consisting of a $200.0 million revolving credit facility (the “Revolving Facility”), which matures on September 15, 2026, and a $250.0 million delayed draw term loan facility (the “2021 Term Loan” and together with the Revolving Facility, the “Credit Facility”), which matures on September 15, 2028. The proceeds of the Revolving Facility can be used to finance working capital, for general corporate purposes and any other purpose not prohibited by the Credit Agreement. We borrowed $250.0 million under the delayed draw term loan on May 31, 2022 and used $170.2 million of the proceeds to settle the Company’s 0.625% Convertible Senior Notes due June 1, 2022, including interest. The remaining proceeds of $79.8 million may be used for general corporate purposes and any other purposes not prohibited by the Credit Agreement. As of May 1, 2024, we have outstanding $245.6 million under the
Current wording
On September 15, 2021, we entered into a credit agreement (the “Credit Agreement”), consisting of a $200.0 million revolving credit facility (the “Revolving Facility”), which matures on September 15, 2026, and a $250.0 million delayed draw term loan facility (the “2021 Term Loan” and together with the Revolving Facility, the “Credit Facility”), which matures on September 15, 2028. The proceeds of the Revolving Facility can be used to finance working capital, for general corporate purposes and any other purpose not prohibited by the Credit Agreement. We borrowed $250.0 million under the delayed draw term loan on May 31, 2022 and used $170.2 million of the proceeds to settle our 0.625% Convertible Senior Notes due June 1, 2022 ("2022 Notes"), including interest. The remaining proceeds of $79.8 million may be used for general corporate purposes and any other purposes not prohibited by the Credit Agreement.
Previous wording
2021 Term Loan, a $0.2 million letter of credit under the Revolving Facility and the remaining borrowing capacity under the Revolving Facility is $199.8 million. As of March 31, 2024, we had $91.2 million available for borrowing under the Revolving Facility, however this availability will be limited as our cash on hand is utilized to repay our 0.50% Convertible Senior Notes due July 15, 2025.
Current wording
As of July 26, 2024, we have outstanding $245.0 under the 2021 Term Loan, a $0.2 million letter of credit under the Revolving Facility and the remaining borrowing capacity under the Revolving Facility is $199.8 million. As of June 30, 2024, we have $20.0 million available for borrowing under the Revolving Facility.
Previous wording
On March 27, 2024, we entered a first lien term loan facility (the “2024 Term Loan”), consisting of $175.0 million which matures on March 27, 2031. We drew $125.0 million of the 2024 Term Loan upon closing while the remaining $50.0 million will be available as a delayed draw term loan until March 27, 2025. The proceeds of the 2024 Term Loan will be used for working capital and general corporate purposes, which may include repayment of our 0.50% Convertible Senior Notes due July 15, 2025. The funding had a $3.1 million original issue discount and associated debt issuance costs of $4.2 million.
Current wording
On March 27, 2024, we entered a first lien term loan facility (the “2024 Term Loan”), consisting of $175.0 million which matures on March 27, 2031. We drew $125.0 million of the 2024 Term Loan upon closing while the remaining $50.0 million will be available as a delayed draw term loan until March 27, 2025. The proceeds of the 2024 Term Loan will be used for working capital and general corporate purposes, which may include repayment of our 2025 Notes. The funding had a $3.1 million original issue discount and associated debt issuance costs of $4.2 million.
Previous wording
As of May 1, 2024, the Company had $125.0 million borrowings outstanding under the 2024 Term Loan.
Current wording
As of July 26, 2024, the Company had $121.9 million borrowings outstanding under the 2024 Term Loan.
Previous wording
Net cash provided by operating activities decreased in the first three months of 2024 from the first three months of 2023 primarily due to unfavorable changes in accounts receivable and accounts payable, accrued expenses and other current liabilities.
Current wording
Net cash provided by operating activities decreased in the first six months of 2024 from the first six months of 2023 primarily due to unfavorable changes in accounts receivable, partially offset by favorable changes in accounts payable, accrued expenses and other current liabilities.
Previous wording
Net cash used in investing activities in the first three months of 2024 and 2023 of $2.7 million and $2.5 million, respectively, consisted of capital expenditures primarily related to internally developed software.
Current wording
Net cash used in investing activities in the first six months of 2024 and 2023 consisted of capital expenditures primarily related to internally developed software.
Previous wording
Net cash provided by financing activities in the first three months of 2024 of $115.7 million consisted primarily of the $117.8 million net proceeds from the 2024 Term Loan partially offset by $1.4 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options.
Current wording
Net cash used in financing activities in the first six months of 2024 consisted primarily of the repurchase of the 2025 Notes for $151.7 million, term loan repayments of $4.4 million and $2.3 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options offset by $117.8 million net proceeds from the 2024 Term Loan.
Previous wording
Net cash used in financing activities in the first three months of 2023 of $159.6 million consisted primarily of the repurchase of our 0.50% Convertible Senior Notes due July 15, 2025 for $156.3 million and $1.7 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options.
Current wording
Net cash used in financing activities in the first six months of 2023 consisted primarily of the repurchase of the 2025 Notes for $156.3 million.
Previous wording
For information regarding new accounting pronouncements, see Note 2—Significant Accounting Policies, in Part I, Item 1 Financial Statements of this Quarterly Report on Form 10-Q.
Current wording
For information regarding new accounting pronouncements, see Note 2—Significant Accounting Policies, in Part I, Item 1 Financial Statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
See Note 12—Debt for additional information.