LENDINGTREE, INC. Exhibit 99.1
LENDINGTREE REPORTS SECOND QUARTER 2023 RESULTS
Strong Segment Margins and Expense Discipline Drive Upside, Revenue Growth Remains Challenged
- Consolidated revenue of $182.5 million
- GAAP net income of $(0.1) million or $(0.01) per diluted share
- Variable marketing margin of $76.5 million
- Adjusted EBITDA of $26.7 million
- Adjusted net income per share of $1.14
CHARLOTTE, NC - July 27, 2023 - LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation's leading online financial services marketplace, today announced results for the quarter ended June 30, 2023.
The company has posted a letter to shareholders on the company's website at investors.lendingtree.com.
"The positive impact from our expense actions combined with very strong margins in the Insurance and the Consumer segments generated Adjusted EBITDA of $27M, better than expected, and improved our Adjusted EBITDA margin to 15%. Customer demand for new loans and insurance continues to outpace the appetite for new customers at our partners. We believe this imbalance will prove temporary, and are encouraged by signals the Fed is nearing the end of its tightening campaign as the pace of inflation has slowed considerably," said Doug Lebda, Chairman and CEO. "Consolidating operations completely under Scott Peyree, our team is currently focused on generating incremental revenue despite multiple headwinds and identifying additional expense savings. As we begin our planning for next year we are focused on driving improved financial results, which will allow us to address our future liabilities in an efficient manner."
Scott Peyree, our COO and President of Marketplace Businesses, commented, "I am excited about the opportunities we have in front of us across the company. I have spent the last week getting up to speed with the Consumer and Home teams, as well as our marketing and sales organization. We are focusing on improving revenue and conversion across the segments, and I am confident we are well positioned to benefit from a positive inflection in demand from our lending partners as macroeconomic challenges subside."
Trent Ziegler, CFO, added, "Despite the decrease in revenue we have experienced due to the current economic cycle, we were able to earn attractive margins due to our ongoing focus on running the business as efficiently as possible. Our solid financial position allows us to continue investing in a targeted set of growth areas to improve the consumer experience. These actions will allow us to generate significant operating leverage when the revenue environment improves."
Second Quarter 2023 Business Highlights
- Home segment revenue of $41.6 million decreased 44% over second quarter 2022 and produced segment profit of $13.3 million, down 50% over the same period.
- Within Home, revenue from Home Equity of $25.3 million decreased 11% over prior year.
- Consumer segment revenue of $82.5 million declined 22% over second quarter 2022.
- Within Consumer, personal loans revenue of $28.1 million declined 33% over prior year.
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- Revenue from our small business offering decreased 23% over prior year.
- Credit card revenue of $21.1 million was down 23% over prior year.
- Insurance segment revenue of $58.4 million decreased 29% over second quarter 2022 and translated into segment profit of $24.8 million, up 10% over the same period.
- Through June 30, 2023, 26.9 million consumers have signed up for MyLendingTree.
LendingTree Summary Financial Metrics (In millions, except per share amounts)
Three Months Ended | Y/Y | Three Months Ended | Q/Q | |||||||
June 30, | March 31, | |||||||||
2023 | 2022 | % Change | 2023 | % Change | ||||||
Total revenue | $ | 182.5 | $ | 261.9 | (30)% | $ | 200.5 | (9)% | ||
Income (loss) before income taxes | $ | 0.1 | $ | (10.4) | 101 % | $ | 13.9 | (99) % | ||
Income tax (expense) benefit | $ | (0.2) | $ | 2.4 | (108) % | $ | (0.4) | (50) % | ||
Net (loss) income | $ | (0.1) | $ | (8.0) | 99 % | $ | 13.5 | (101)% | ||
Net (loss) income % of revenue | - % | (3)% | 7 % | |||||||
(Loss) income per share | ||||||||||
Basic | $ | (0.01) | $ | (0.63) | $ | 1.05 | ||||
Diluted | $ | (0.01) | $ | (0.63) | $ | 1.04 | ||||
Variable marketing margin | ||||||||||
Total revenue | $ | 182.5 | $ | 261.9 | (30) % | $ | 200.5 | (9) % | ||
Variable marketing expense (1) (2) | $ | (106.0) | $ | (171.1) | (38) % | $ | (124.4) | (15) % | ||
Variable marketing margin (2) | $ | 76.5 | $ | 90.8 | (16)% | $ | 76.1 | 1 % | ||
Variable marketing margin % of revenue (2) | 42 % | 35 % | 38 % | |||||||
Adjusted EBITDA (2) | $ | 26.7 | $ | 28.6 | (7)% | $ | 14.5 | 84 % | ||
Adjusted EBITDA % of revenue (2) | 15 % | 11 % | 7 % | |||||||
Adjusted net income (2) | $ | 14.7 | $ | 7.6 | 93 % | $ | 3.2 | 359 % | ||
Adjusted net income per share (2) | $ | 1.14 | $ | 0.58 | 97 % | $ | 0.25 | 356 % | ||
- Represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses. Excludes overhead, fixed costs and personnel-related expenses.
- Variable marketing expense, variable marketing margin, variable marketing margin % of revenue, adjusted EBITDA, adjusted EBITDA % of revenue, adjusted net income and adjusted net income per share are non-GAAP measures. Please see "LendingTree's Reconciliation of Non-GAAP Measures to GAAP" and "LendingTree's Principles of Financial Reporting" below for more information.
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LendingTree Segment Results
(In millions)
Three Months Ended | Y/Y | ||||
June 30, | |||||
2023 | 2022 | % Change | |||
Home(1) | |||||
Revenue | $ | 41.6 | $ | 73.9 | (44) % |
Segment profit | $ | 13.3 | $ | 26.7 | (50) % |
Segment profit % of revenue | 32 % | 36 % | |||
Consumer(2) | |||||
Revenue | $ | 82.5 | $ | 106.1 | (22) % |
Segment profit | $ | 40.7 | $ | 44.6 | (9) % |
Segment profit % of revenue | 49 % | 42 % | |||
Insurance(3) | |||||
Revenue | $ | 58.4 | $ | 81.8 | (29) % |
Segment profit | $ | 24.8 | $ | 22.6 | 10 % |
Segment profit % of revenue | 42 % | 28 % | |||
Other(4) | |||||
Revenue | $ | - | $ | 0.1 | (100) % |
(Loss) | $ | (0.3) | $ | (0.1) | (200) % |
Total revenue | $ | 182.5 | $ | 261.9 | (30)% |
Total segment profit | $ | 78.5 | $ | 93.8 | (16)% |
Brand marketing expense (5) | $ | (2.0) | $ | (3.0) | (33) % |
Variable marketing margin | $ | 76.5 | $ | 90.8 | (16)% |
Variable marketing margin % of revenue | 42 % | 35 % |
Three Months Ended | Q/Q | |
March 31, | ||
2023 | % Change | |
$ | 43.7 | (5) % |
$ | 15.1 | (12) % |
35 % | ||
$ | 79.7 | 4 % |
$ | 34.9 | 17 % |
44 % | ||
$ | 77.1 | (24) % |
$ | 30.2 | (18) % |
39 % | ||
$ | - | - % |
$ | (0.2) | (50) % |
$ | 200.5 | (9)% |
$ | 80.0 | (2)% |
$ | (3.9) | (49) % |
$ | 76.1 | 1 % |
38 % |
- The Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans. We ceased offering reverse mortgage loans in Q4 2022.
- The 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 Insurance segment consists of insurance quote products and sales of insurance policies.
- The Other category primarily includes marketing revenue and related expenses not allocated to a specific segment.
- Brand marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses that are not assignable to the segments' products. This measure excludes overhead, fixed costs and personnel-related expenses.
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Financial Outlook*
Today we are updating our full-year 2023 outlook and introducing our our outlook for Q3.
Full-year 2023:
- Revenue of $680 - $700 million compared to the prior range of $760 - $800 million
- Variable Marketing Margin of $275 - $290 million vs prior range of $290 - $310 million
- Adjusted EBITDA of $70 - $80 million vs prior range of $80 - $90 million
Third-quarter 2023:
- Revenue: $155 - $170 million
- Variable Marketing Margin: $65 - $75 million
- Adjusted EBITDA: $17 - $22 million
*LendingTree is not able to provide a reconciliation of projected variable marketing margin or adjusted EBITDA to the most directly comparable expected GAAP results due to the unknown effect, timing and potential significance of the effects of legal matters and tax considerations. Expenses associated with legal matters and tax considerations have in the past, and may in the future, significantly affect GAAP results in a particular period.
Quarterly Conference Call
A conference call to discuss LendingTree's second quarter 2023 financial results will be webcast live today, July 27, 2023 at 9:00 AM Eastern Time (ET). The live audiocast is open to the public and will be available on LendingTree's investor relations website at investors.lendingtree.com. Following completion of the call, a recorded replay of the webcast will be available on the website.
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LENDINGTREE'S RECONCILIATION OF NON-GAAP MEASURES TO GAAP
Variable Marketing Expense
Below is a reconciliation of selling and marketing expense, the most directly comparable GAAP measure, to variable marketing expense. See "LendingTree's Principles of Financial Reporting" for further discussion of the Company's use of this non-GAAP measure.
Three Months Ended | ||||||
June 30, | March 31, | June 30, | ||||
2023 | 2023 | 2022 | ||||
(in thousands) | ||||||
Selling and marketing expense | $ | 116,065 | $ | 137,111 | $ | 184,537 |
Non-variable selling and marketing expense (1) | (10,107) | (12,712) | (13,385) | |||
Variable marketing expense | $ | 105,958 | $ | 124,399 | $ | 171,152 |
- Represents the portion of selling and marketing expense not attributable to variable costs paid for advertising, direct marketing and related expenses. Includes overhead, fixed costs and personnel-related expenses.
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Disclaimer
LendingTree Inc. published this content on 27 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2023 11:04:19 UTC.
