LendingTree Inc
For the period ended Sep 30, 2024. Filed Nov 4, 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.
Sep 30, 2024 · Filed Nov 4, 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 2024-06-30; filed 2024-07-29.
0001434621-24-000020
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0001434621-24-000026
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 137 previous paragraphs and 149 current paragraphs.
78 unchanged; 51 reworded; 20 added; 8 removed; 0 previous and 0 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 (20)
Current report
Regulations
Current report
Our revenue and earnings may fluctuate from time to time as a result of changes to federal, state, and industry-based laws and regulations, or changes to standards concerning the enforcement thereof. On January 26, 2024, the U.S. Federal Communications Commission (the “FCC”) published regulations which, among other things, amend the consent requirements of the Telephone Consumer Protection Act of 1991 to close what the FCC refers to as the “lead generator loophole” by requiring “one-to-one consent” for outbound telemarketing calls or texts made using an automatic telephone dialing system or pre-recorded or artificial voice messages to wireless or residential numbers. The new “one-to-one consent” rule is scheduled to take effect on January 27, 2025.
Current report
Although it remains unclear how these changes may ultimately be interpreted by courts or further revised by regulators, we anticipate that the required changes could have an adverse impact on the market for financial product and insurance quote requests and will require us and our third-party sources to modify our marketing practices and policies. While we have been proactively working to enhance our due diligence, contractual requirements, and oversight of lead generators, and will continue to analyze our marketing practices and policies and update as appropriate to mitigate the impact on our business and to ensure continuing compliance with the new rules, it is not possible to ensure that all lead generators and employees will comply with our policies and procedures at all times, which may result in potential litigation and regulatory exposure.
Current report
Revenue from our Consumer segment decreased $62.6 million, or 27%, in the first nine months of 2024 from the first nine months of 2023 primarily due to decreases in each of our consumer products, primarily our credit cards and other credit products.
Current report
Goodwill impairment
Current report
In the third quarter of 2023, we incurred a goodwill impairment charge of $38.6 million in our Insurance reporting unit. See Note 6 - Goodwill and Intangible Assets, in Part I. Item 1 Financial Statements, for additional information.
Current report
During September 2023, we completed workforce reductions of 14 employees. We incurred approximately $0.9 million in severance charges in connection with the workforce reductions, consisting of cash expenditures for employee separation costs of approximately $0.7 million in the third quarter of 2023 and non-cash charges for the accelerated vesting of certain equity awards of approximately $0.2 million through the fourth quarter of 2023. The cash payments were completed by the third quarter of 2024.
Current report
See Note 12—Debt, in Part I. Item 1 Financial Statements, for additional information.
Current report
Other expense
Current report
In the third quarter of 2024, we incurred impairment charges of $58.4 million related to two investments in equity securities.
Current report
In the third quarter of 2023, we incurred an impairment charge of $113.1 million related to an investment in equity securities.
Current report
See Note 7 - Equity Investment, in Part I. Item 1 Financial Statements, for additional information.
Current report
Personal loans revenue of $27.8 million in the third quarter of 2024 increased 5% from the third quarter of 2023 as lending standards remain restrictive at our lender partners. If financial market expectations for decreases in short-term interest rates remain as projected, we believe this would likely benefit our personal loans product in future quarters.
Current report
Small business revenue increased 32% in the third quarter of 2024 from the third quarter of 2023, as the lending appetite has remained stable from our partners. Additionally, the revenue growth has allowed us to invest more into marketing spend to capture high quality business owners searching for loans.
Current report
In the third quarter of 2024, we repurchased approximately $7.6 million in principal amount of our 2025 Notes for $7.2 million. As a result of the repurchase, we recognized a gain on the extinguishment of $0.5 million and an immaterial loss on the write-off of unamortized debt issuance costs, both of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.
Current report
Equity Distribution Agreement
Current report
In July 2024, we entered into an Equity Distribution Agreement in connection with the establishment of an ATM Equity Program (as defined in the 2024 Term Loan (as defined herein) agreement) under which we may sell up to an aggregate of $50.0 million of shares of the our common stock. No sales were made under the Equity Distribution Agreement during the three months ended September 30, 2024.
Current report
We filed an ATM Shelf Registration (as defined in the 2024 Term Loan agreement) with the SEC in the third quarter of 2024. In the event of a default in the minimum Consolidated EBITDA (as defined in the 2024 Term Loan agreement) covenant in the 2024 Term Loan, we are required to utilize the ATM Equity Program (as defined in the 2024 Term Loan agreement) to sell common stock and use the proceeds to cure the event of default in the minimum Consolidated EBITDA covenant. Additionally, we may use the ATM Equity Program to maintain the $40.0 million minimum cash balance requirement in the 2024 Term Loan.
Current report
See Note 12—Debt, in Part I. Item 1 Financial Statements, for additional information.
Current report
New Accounting Pronouncements and Critical Accounting Estimates
Removed paragraphs (8)
Previous report
Recent Developments
Previous report
See Note 12—Debt for additional information.
Previous report
Other income
Previous report
Other income primarily consists of dividend income.
Previous 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.
Previous report
We expect our Insurance segment to have continued sequential revenue growth for the remainder of the year.
Previous report
See Note 12—Debt for additional information.
Previous report
New Accounting Pronouncements
Reworded paragraphs (51)
Previous 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.
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 decreased slightly in the third quarter of 2024 compared to the fourth quarter of 2023, but more than doubled compared to the low rates seen in the third quarter of 2021. 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 remainder of 2024.
Previous 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.
Current wording
According to Freddie Mac, the monthly average 30-year mortgage interest rates decreased from a monthly average of 6.82% in December 2023 to a monthly average of 6.18% in September 2024. On a quarterly basis, 30-year mortgage interest rates in the third quarter of 2024 averaged 6.51%, compared to 7.04% in the third 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 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.
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 25% of total mortgage origination dollars in the third quarter of 2024 compared to 15% in the fourth quarter of 2023 and 14% in the third quarter of 2023. In the third quarter of 2024, total refinance origination dollars increased 135% from the fourth quarter of 2023 and increased 118% from the third quarter of 2023. Industry-wide mortgage origination dollars in the third quarter of 2024 increased 35% from the fourth quarter of 2023 and increased 21% from third 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 24% 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 28% for 2024 compared to 15% in 2023.
Previous 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.
Current wording
According to Fannie Mae data, existing home sales increased approximately 1% in the third quarter of 2024 compared to the fourth quarter of 2023, and decreased approximately 2% compared to the third quarter of 2023. Fannie Mae predicts an overall decrease in existing-home sales of approximately 1% in 2024 compared to 2023.
Previous wording
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 wording
We added 1.2 million net new users in the third quarter of 2024, bringing cumulative active users to 30.7 million as of September 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 $5.8 million of revenue, or 2% of total revenue, in the third quarter of 2024 to registered Spring users who initiated their transaction from the Spring platform. During the third quarter of 2024, approximately 0.3 million Spring users initiated a transaction from the Spring platform that contributed to revenue.
Previous 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.
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 our 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. 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.
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, we 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 was capital-intensive, required elevated overhead, and future prospects were becoming uncertain.
Previous wording
Results of Operations for the Three and Six Months ended June 30, 2024 and 2023
Current wording
Results of Operations for the Three and Nine Months ended September 30, 2024 and 2023
Previous 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.
Current wording
Revenue increased in the third quarter and first nine months of 2024 compared to the third quarter and first nine months of 2023 due to increases in our Insurance segment partially offset by decreases in our Home and Consumer segments.
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 $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.
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 $7.8 million, or 12%, in the third quarter of 2024 from the third quarter of 2023 primarily due to a decrease in credit cards, partially offset by increases in business loans and personal loans.
Previous wording
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 wording
Revenue from our personal loans product increased $1.3 million, or 5%, to $27.8 million in the third quarter of 2024 from $26.5 million in the third quarter of 2023. The increase in revenue was due to a 31% increase in volume, representing $6.5 million , partially offset by a 20% decrease in revenue earned per consumer, representing $5.2 million. Revenue from our personal loans product decreased $3.4 million, or 4%, to $74.9 million in the first nine months of 2024 from $78.3 million in the first nine months of 2023. The decrease in revenue was due to an 18% decrease in revenue earned per consumer, representing $14.0 million of the decrease, partially offset by a 16% increase in volume, representing $10.6 million of an increase. We measure volume for our personal loans product as the number of unique consumers completing request forms.
Previous 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.
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 $8.5 million, or 58%, in the third quarter of 2024 compared to the third quarter of 2023 and decreased $34.6 million, or 64%, in the first nine months of 2024 compared to the first nine months of 2023 due to a decrease in volume and revenue earned per click. We measure volume for our credit cards product as the number of consumers clicking through to a card issuer. Revenue from our small business loans product increased $3.7 million, or 32%, in the third quarter of 2024 compared to the third quarter of 2023 primarily due to an increase in revenue earned per consumer. Revenue from our other credit products decreased $12.4 million, or 46%, in the first nine months of 2024 compared to the first nine months of 2023 due to the closure of our Ovation credit services business at the end of the second quarter of 2023. Revenue from our deposits product decreased $6.2 million or 45%, in the first nine months of 2024 compared to the first nine months of 2023 due to a decrease in volume and revenue earned per consumer.
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 $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.
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 $1.1 million, or 3%, in the third quarter of 2024 from the third quarter of 2023 primarily due to a decrease in mortgage products partially offset by an increase in our home equity loans product, and decreased $23.8 million, or 20%, in the first nine months of 2024 from the first nine months of 2023 due to decreases in revenue from each of our Home products.
Previous wording
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 wording
Revenue from our mortgage products decreased $2.1 million, or 16%, to $11.2 million in the third quarter of 2024 from $13.3 million in the third quarter of 2023. The decrease in revenue was due to a 12% decrease in volume, representing $1.6 million of the decrease, and a 4% decrease in revenue earned per consumer, representing $0.5 million of the decrease.
Previous wording
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 wording
Revenue from our mortgage products decreased $18.5 million, or 37%, to $31.1 million in the first nine months of 2024 from $49.5 million in the first nine months of 2023. The decrease in revenue was due to a 30% decrease in volume, representing $13.4 million of the decrease, and a 10% decrease in revenue earned per consumer, representing $5.1 million of the decrease. We measure volume for our mortgage products as the number of consumers completing request forms.
Previous 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.
Current wording
Revenue from our purchase mortgage product decreased $10.8 million in the first nine months of 2024 compared to the first nine 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 $7.7 million in the first nine months of 2024 compared to the first nine 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
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 wording
Revenue from our home equity loans product decreased $5.3 million, or 8%, to $63.8 million in the first nine months of 2024 from $69.1 million in the first nine months of 2023. The decrease in revenue was due to a 19% decrease in revenue earned per consumer, representing $13.3 million of the decrease, partially offset by a 14% increase in volume, representing a $8.0 million increase. We measure volume for our home equity loans and lines of credit products as the number of consumers completing request forms.
Previous wording
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 wording
Revenue from our Insurance segment increased $114.5 million, or 210%, to $169.1 million in the third quarter of 2024 from $54.5 million in the third quarter of 2023. The increase in revenue was due to a 107% increase in revenue earned per consumer, representing $58.1 million of the increase, and a 50% increase in volume, representing $56.4 million of the increase. Revenue from our Insurance segment increased $187.0 million, or 98%, to $377.0 million in the first nine months of 2024 from $190.0 million in the first nine months of 2023. The increase in revenue was due to a 54% increase in revenue earned per consumer, representing $102.3 million of the increase, and a 29% increase in volume, representing $84.7 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.
Previous 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.
Current wording
Cost of revenue increased $1.8 million in the third quarter of 2024 from the third quarter of 2023 primarily due to increases in direct costs associated with credit scoring and credit card fees, and compensation and benefits. Cost of revenue decreased $4.3 million in the first nine months of 2024 from the first nine months of 2023 primarily due to a decrease in compensation and benefits of $3.9 million. The decreases in the first nine 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 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.
Current wording
Cost of revenue as a percentage of revenue decreased to 4% in the third quarter of 2024 compared to 5% in the third quarter of 2023, and decreased to 4% in the first nine months of 2024 compared to 6% in the first nine months of 2023.
Previous 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.
Current wording
Selling and marketing expense increased in the third quarter of 2024 compared to the third quarter 2023 by $96.3 million, and increased $99.7 million in the first nine months of 2024 compared to the first nine months of 2023 primarily due to the changes in advertising and promotional expense discussed below. Additionally, compensation and benefits decreased $3.7 million in the first nine months of 2024 compared to the first nine months of 2023.
Previous 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.
Current wording
We adjusted our advertising expenditures in the third quarter and first nine months of 2024 compared to the third quarter and first nine 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
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 wording
General and administrative expense remained relatively consistent in the third quarter of 2024 from the third quarter of 2023. General and administrative expense decreased in the first nine months of 2024 from the first nine months of 2023 primarily due to a decrease in compensation and benefits of $5.5 million, a decrease in fees and other charges of $1.5 million and a decrease in facilities expenses of $1.5 million. Additionally, we incurred a $4.2 million loss on the impairment of assets for our Ovation business in the first nine months of 2023.
Previous wording
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 wording
General and administrative expense as a percentage of revenue decreased to 10% in the third quarter of 2024 compared to 17% in the third quarter of 2023, and decreased to 12% in the first nine months of 2024 compared to 17% in the first nine months of 2023.
Previous 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.
Current wording
Product development expense remained consistent in the third quarter of 2024 compared to the third quarter of 2023. Product development expense decreased in the first nine months of 2024 compared to the first nine 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
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 wording
The decrease in amortization of intangibles in the third quarter and first nine months of 2024 compared to the third quarter and first nine months of 2023 was primarily due to certain intangible assets associated with our recent business acquisitions becoming fully amortized.
Previous 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.
Current wording
On March 24, 2023, we committed to the Reduction Plan to reduce operating costs, which included the elimination of approximately 13% of our 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 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 wording
In March 2024, we drew $125.0 million on a first lien term loan facility and incurred $3.8 million and $8.0 million of interest expense in the third quarter of 2024 and first nine months of 2024, respectively.
Previous 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.
Current wording
In the third quarter of 2024, we repurchased approximately $7.6 million in principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 (the "2025 Notes") for $7.2 million. As a result of the repurchase, we recognized a gain on the extinguishment of $0.5 million and an immaterial loss on the write-off of unamortized debt issuance costs, both of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.
Previous 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.
Current wording
For the third quarter and first nine 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
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 wording
Home segment revenue decreased 3% to $32.2 million in the third quarter of 2024 from the third quarter of 2023 and segment profit decreased 18% to $9.3 million in the third quarter of 2024 from the third quarter of 2023. Segment margin declined to 29% in the third quarter of 2024 compared to 34% in the third quarter of 2023, primarily due to a decline in revenue earned per consumer, due to a decline in close rates at our lender partners.
Previous wording
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 wording
Home equity revenue of $21.0 million in the third quarter of 2024 increased $0.9 million from $20.1 million in the third quarter of 2023. Volume of home equity consumers completing request forms increased 25% in the third quarter of 2024 compared to the third quarter of 2023, however, a 17% decline in revenue earned per consumer partially offset this volume growth.
Previous wording
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 wording
Within Home, our core mortgage business generated revenue of $11.2 million in the third quarter of 2024, down 16% from the third 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. Our mortgage business continues to see headwinds from a lack of in-the-money refinance borrowers given the current higher level of mortgage rates, and subdued home sales have pressured the volume of consumers searching for purchase loans.
Previous wording
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 wording
We believe financial market expectations for continued decreases in interest rates may benefit the mortgage and home equity lending environment and our Home segment.
Previous wording
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 wording
Our Consumer segment revenue decreased 12% to $59.5 million in the third quarter of 2024 from the third quarter of 2023, and segment profit decreased 19% to $28.0 million in the third quarter of 2024 from the third quarter of 2023 due to the decline in revenue. Segment margin was 47% in the third quarter of 2024 compared to 51% in the third quarter of 2023 primarily due to a decline in revenue earned per consumer on certain products as well as a change in mix shift in the product revenue.
Previous wording
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 wording
Insurance revenue increased 210% to $169.1 million in the third quarter of 2024 from the third quarter of 2023 and segment profit increased 77% to $41.4 million in the third quarter of 2024 from the third quarter of 2023. Carrier demand for new auto insurance customers has been strong, with volume increasing 50% in the third quarter of 2024 compared to the third 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.
Previous wording
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 wording
Segment margin declined to 25% in the third quarter of 2024 from 43% in the third 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 2024, we re-entered those marketing channels to fill the increase in carrier demand, which has resulted in lower segment profit margin.
Previous wording
The following is a reconciliation of net income (loss), the most directly comparable GAAP measure, to variable marketing margin:
Current wording
The following is a reconciliation of net loss, the most directly comparable GAAP measure, to variable marketing margin:
Previous wording
The following table is a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA.
Current wording
The following table is a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA.
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