LendingTree, Inc. Q1 FY2025 earnings call

Key Points

• All three business segments had solid revenue growth in Q1, but adjusted EBITDA was below forecast due to regulatory headwinds in insurance and one-time expenses.
• Insurance was impacted by FCC rule, but expects recovery; lending's consumer segment benefited from small business and personal loans; home segment strong from home equity.
• Offset one-time costs with savings from zero-based budgeting; committed to managing expenses while investing in growth.
• Addressed tariffs, stating no direct impact but monitoring secondary effects from interest rates or inflation.

Insurance: Revenue grew 71% year-over-year in Q1, still forecasting annual revenue and BMD growth. Lending (Consumer): Benefited from growth in small business and personal loan products; investment in concierge sales team improved unit economics, expecting small business to generate record revenue in 2025. Home: Driven by home equity lending; prevailing high mortgage rates affect new home buyers and refinancing, but slower home price growth and increased inventory help.

Forward-Looking

• Still forecasting strong adjusted EBITDA growth of 15% midpoint of annual outlook.
• Insurance expected to improve from Q1, with back half of year better; Home segment expects continued home equity growth; Consumer segment expects seasonal improvement.
• Business model resilient with two-sided marketplace, can weather volatility unless a big shock occurs.

Risks

• Regulatory headwinds in insurance initially delayed recovery.
• Potential secondary effects from tariffs on interest rates or inflation.
• QuoteWizard litigation with $19M liability payable in three equal installments (Q4 2025, Q1 2026, Q2 2026).

Q: Elaborate on carrier partners' views on tariffs and impact on profitability/customer acquisition.

A: Carriers generally feel good about profitability, monitoring tariffs, but no immediate concerns regarding direct impact.

Q: SMB seasonality and能否维持季度水平.

A: SMB has seasonality, but growing direct sales staff and lender network, optimistic about rest of year performance.

Q: Mortgage marketplace potential.

A: Stuck due to macro, home equity is substitution, technology to enable more loans in the future.

Q: VMM margin in Insurance and Home segment.

A: Insurance VMM expected to normalize to low to mid 30s; Home segment margin sustainable due to unit economics from home equity.

Q: Home segment margin inflection.

A: Sustainable, driven by home equity unit economics where close rates are high despite lower loan amounts for lenders.

Q: Consumer behavior change post quarter end.

A: Most products have strong demand, mortgage purchase/refinance has less demand due to consumer caution.

Q: Expense levers to protect earnings.

A: Zero-based budgeting, variable compensation, adjusting marketing spend as needed.

Q: QuoteWizard litigation reserve.

A: $19M liability, payable in installments after repaying convert in July.

Q: Student loan business update.

A: Largely exited, not actively marketing, but could return if student loan refi market picks up.