LendingTree Files Q2 2024 10-Q

TL;DR

LendingTree's Q2 2024 10-Q is in. Check financials.

AI Summary

LendingTree, Inc. filed its 10-Q for the period ending June 30, 2024. The filing covers the second quarter of 2024, detailing financial performance and operational updates. Key financial data and business segments are presented for the reporting period and comparative periods.

Why It Matters

This filing provides investors and analysts with the latest financial performance data for LendingTree, Inc., crucial for understanding the company's current health and future prospects in the loan brokerage market.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags or significant new risks indicated in the provided snippet.

Key Numbers

• 2024 Q2 — Reporting Period (Second quarter of 2024 financial performance)
• 2023 Q2 — Comparative Period (Second quarter of 2023 financial performance for comparison)

Key Players & Entities

• LendingTree, Inc. (company) — Filer of the 10-Q
• 20240630 (date) — End of the reporting period
• 20240729 (date) — Filing date
• Tree.com, Inc. (company) — Former company name

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share TREE The Nasdaq Sto

Filing Documents

• tree-20240630.htm (10-Q) — 1336KB
• tree-2024630x10qexx311.htm (EX-31.1) — 10KB
• tree-2024630x10qexx312.htm (EX-31.2) — 10KB
• tree-2024630x10qexx321.htm (EX-32.1) — 5KB
• tree-2024630x10qexx322.htm (EX-32.2) — 5KB
• tree-20240630_g1.jpg (GRAPHIC) — 36KB
• tree-20240630_g2.jpg (GRAPHIC) — 328KB
• 0001434621-24-000020.txt ( ) — 7979KB
• tree-20240630.xsd (EX-101.SCH) — 42KB
• tree-20240630_cal.xml (EX-101.CAL) — 80KB
• tree-20240630_def.xml (EX-101.DEF) — 222KB
• tree-20240630_lab.xml (EX-101.LAB) — 612KB
• tree-20240630_pre.xml (EX-101.PRE) — 441KB
• tree-20240630_htm.xml (XML) — 1037KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 38 Item 4.

Controls and Procedures

Controls and Procedures 38

—OTHER INFORMATION

PART II—OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 40 Item 1A.

Risk Factors

Risk Factors 40 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds , and Issuer Purchases of Equity Securities 40 Item 5. Other Information 41 Item 6. Exhibits 42 2 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements LENDINGTREE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, 2024 December 31, 2023 (in thousands, except par value and share amounts) ASSETS: Cash and cash equivalents $ 66,769 $ 112,051 Restricted cash and cash equivalents — 5 Accounts receivable (net of allowance of $ 1,930 and $ 2,222 , respectively) 107,711 54,954 Prepaid and other current assets 31,457 29,472 Total current assets 205,937 196,482 Property and equipment (net of accumulated depreciation of $ 35,832 and $ 36,827 , respectively) 46,400 50,481 Operating lease right-of-use assets 54,830 57,222 Goodwill 381,539 381,539 Intangible assets, net 47,665 50,620 Equity investments 60,076 60,076 Other non-current assets 5,746 6,339 Total assets $ 802,193 $ 802,759 LIABILITIES: Current portion of long-term debt $ 14,895 $ 3,125 Accounts payable, trade 3,042 1,960 Accrued expenses and other current liabilities 95,173 70,544 Total current liabilities 113,110 75,629 Long-term debt 467,722 525,617 Operating lease liabilities 72,180 75,023 Deferred income tax liabilities 3,095 2,091 Other non-current liabilities 266 267 Total liabilities 656,373 678,627 Commitments and contingencies (Note 13) SHAREHOLDERS' EQUITY: Preferred stock $ 0.01 par value; 5,000,000 shares authorized; none issued or outstanding — — Common stock $ 0.01 par value; 50,000,000 shares authorized; 16,695,394 and 16,396,911 shares issued, respectively, and 13,339,928 and 13,041,445 shares outstanding, respectively 167 164 Additional paid-in capital 1,240,766 1,227,849 Accumulated deficit ( 828,935 ) ( 837,703 ) Treasury stock; 3,355,466 and 3,355,466 shares, respectively ( 266,178 ) ( 266,178 ) Total shareholders' equity 145,820 124,132 Total liabilities and shareholders' equity $ 802,193 $ 802,759 The accompanying notes to consolidated financial statements are an integral part of these statements. 3 Table of Contents LENDINGTREE, INC. AND

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1— ORGANIZATION Company Overview LendingTree, Inc. is the parent of LT Intermediate Company, LLC, which holds all of the outstanding ownership interests of LendingTree, LLC, and LendingTree, LLC owns several companies (collectively, "LendingTree" or the "Company"). LendingTree operates what it believes to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. The Company offers 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. The Company primarily seeks 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. The Company also serves 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 it generates with these providers. The consolidated financial statements include the accounts of LendingTree and all its wholly-owned entities. Intercompany transactions and accounts have been eliminated. Basis of Presentation The accompanying unaudited interim consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of management, the unaudited

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Certain Risks and Concentrations LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and fraud. Financial instruments, which potentially subject the Company to concentration of credit risk at June 30, 2024, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit. The Company requires certain Network Partners to maintain security deposits with the Company, which, in the event of non-payment, would be applied against any accounts receivable outstanding. Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the Company's marketplace. Lenders and lead purchasers participating on the Company's marketplace can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders and lead purchasers can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans and other products from Network Partners without utilizing the Company's services, the Company's ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the Network Partners whose loans and other financial products are offered on its online marketplace, consumers may obtain offers from these Network Partners without using its service. Other than a support services office in India, the Company's operations are geographically limited to and dependent upon t

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3— REVENUE Revenue is as follows (in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Home $ 32,166 $ 41,563 $ 62,609 $ 85,238 Personal loans 26,936 28,137 47,063 51,736 Other Consumer 28,965 54,340 60,289 110,450 Total Consumer 55,901 82,477 107,352 162,186 Insurance 122,071 58,398 207,943 135,480 Other 2 15 4 57 Total revenue $ 210,140 $ 182,453 $ 377,908 $ 382,961 The Company derives its revenue primarily from match fees and closing fees. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and promised services have transferred to the customer. The Company's services are generally transferred to the customer at a point in time. Revenue from Home products is primarily generated from upfront match fees paid by mortgage Network Partners that receive a loan request, and in some cases upfront fees for clicks or call transfers. Match fees and upfront fees for clicks and call transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a loan request to the customer. Revenue from Consumer products is generated by match and other upfront fees for clicks or call transfers, as well as from closing fees, approval fees and upfront service and subscription fees. Closing fees are derived from lenders on certain auto loans, business loans, personal loans, and student loans when the lender funds a loan with the consumer. Approval fees are derived from credit card issuers when the credit card consumer receives card approval from the credit card issuer. Upfront service fees

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As the contract liability was in the Ovation business that closed during 2023, there was no contract liability at December 31, 2023. During the second quarter and first six months of 2023, the Company recognized revenue of $ 0.1 million and $ 0.9 million, respectively, that was included in the contract liability balance at December 31, 2022. Revenue recognized in any reporting period includes estimated variable consideration for which the Company has satisfied the related performance obligations but are still pending the occurrence or non-occurrence of a future event outside the Company's control (such as lenders providing loans to consumers or credit card approvals of consumers) before the Company has a contractual right to payment. The Company recognizes increases or decreases to such revenue from prior periods. There was an increase of $ 0.2 million in the second quarter of 2024, and there was a decrease of $ 0.9 million in the second quarter of 2023. NOTE 4— CASH AND RESTRICTED CASH Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands) : June 30, 2024 December 31, 2023 Cash and cash equivalents $ 66,769 $ 112,051 Restricted cash and cash equivalents — 5 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 66,769 $ 112,056 NOTE 5— ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, current and expected economic conditions and the specific customer's current and expected ability to pay its obligation. Accounts receivable are considered past due when they are outstanding longer than the contractual payment terms. Accounts receivable are written o

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Goodwill and Indefinite-Lived Intangible Assets The Company's goodwill at each of June 30, 2024 and December 31, 2023 consisted of $ 59.3 million associated with the Home segment, $ 166.1 million associated with the Consumer segment, and $ 156.1 million associated with the Insurance segment. During the third quarter of 2023, the Company concluded that a triggering event had occurred related to its goodwill and an interim quantitative impairment test was performed as of September 30, 2023. During the third quarter of 2023, the Company's market capitalization fell below its book value. Additionally, the Home reporting unit continued to struggle due to the effects of the significant increases in mortgage rates, low for-sale home inventories and the rise in home prices. The Insurance reporting unit continued to see pressure due to the consumer price inflation negatively impacting carrier underwriting. Upon completing a quantitative goodwill impairment test, the Company concluded that the carrying value of the Insurance reporting unit exceeded its fair value which resulted in a goodwill impairment charge of $ 38.6 million in the third quarter of 2023. The fair value of the Home and Consumer reporting units exceeded their carrying amounts, indicating no goodwill impairment. The Company will monitor the recovery of the Insurance reporting unit and Home reporting unit. Any changes in the timing of the recovery compared to current expectations could cause an impairment to the Insurance or Home reporting unit. Intangible assets with indefinite lives relate to the Company's trademarks. Intangible Assets with Definite Lives Intangible assets with definite lives relate to the following (in thousands) : Cost Accumulated Amortization Net Customer lists 76,100 ( 38,577 ) 37,523 Balance at June 30, 2024 $ 76,100 $ ( 38,577 ) $ 37,523 Cost Accumulated Amortization Net Customer lists $ 76,100 $ ( 35,644 ) $ 40,456

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 7— EQUITY INVESTMENT The equity inves

View Full Filing

View this 10-Q filing on SEC EDGAR