Exhibit 99.2
2024年10月31日
亲爱的股东：
我们很高兴地报告，我们的公司在第三季度跨所有板块取得了我们财务前景的高端，营业收入为2.61亿美元，比去年同期增长了68％，AEBITDA为2690万美元，增长了23％。展望明年，我们对我们所有三个可以报告的板块都将恢复年度增长持乐观态度。我们相信这种改善的运营表现，加上严格控制费用和对资本结构的战略管理，应该有助于为我们的股东创造持续的价值。
我们的保险业务继续以加快的步伐增长，营业收入同比增长210％，环比增长38％。 本季度，保险受益于网络上消费者交通激增以及一些拥有健康承保利润的运营商，寻求占领市场份额。 搜索新保险政策的客户需求仍然非常强劲，总保险量比去年同期增加了50％，环比增长了25％。
离散的经营措施和对我们的小企业和个人贷款业务的投资表现良好，推动消费业务营业收入环比增长6%。消费信贷市场的借贷条件在很大程度上仍然具有限制性。然而，我们对小企业贷款产品去年同比增长32%的营收增长以及个人贷款的环比改善感到鼓舞。展望未来，与我们的贷款合作伙伴进行的对话显示，随着联邦储备局在九月份降息，信贷条件可能会在明年放松，市场预期未来会进一步降低短期利率。
我们的家居部门也出现了增长迹象，主要受到我们的房屋产权产品推动，去年实现了5%的营业收入增长。有限的再融资借款人群和历史低位的房屋销售继续对传统抵押贷款产品的进展产生影响。和我们的消费部门类似，我们相信利率期货的前景可能推动未来一年家居业务的改善结果。
我们目前已经深入进行了2025年规划过程，并专注于保持支出纪律，同时有选择地投资一系列我们认为将推动增量VMD的倡议。随着我们继续减少负债表，我们有望优化资本结构，并随着时间推移提高自由现金流转化。
| Q3.2024 | 1 | |||||||||||||
| 综合财务摘要 | |||||||||||||||||||||||||||||||||||||||||||||||
| （单位：百万，每股金额） | 2024 | 2023 | 同比 | ||||||||||||||||||||||||||||||||||||||||||||
| Q3 | Q2 | Q1 | Q4 | Q3 | 百分比变动 | ||||||||||||||||||||||||||||||||||||||||||
| 总收入 | $ | 260.8 | $ | 210.1 | $ | 167.8 | $ | 134.4 | $ | 155.2 | 68% | ||||||||||||||||||||||||||||||||||||
| （亏损）所得税前收入 | $ | (57.5) | $ | 9.4 | $ | 1.6 | $ | 13.1 | $ | (152.0) | 62% | ||||||||||||||||||||||||||||||||||||
| 所得税费用（收益） | $ | (0.5) | $ | (1.6) | $ | (0.6) | $ | (0.4) | $ | 3.5 | (114)% | ||||||||||||||||||||||||||||||||||||
| 净（亏损）利润 | $ | (58.0) | $ | 7.8 | $ | 1.0 | $ | 12.7 | $ | (148.5) | 61% | ||||||||||||||||||||||||||||||||||||
| 净利润（损失）占营业收入的比例 | (22)% | 4% | 1% | 9% | (96)% | ||||||||||||||||||||||||||||||||||||||||||
| 每股盈利（亏损） | |||||||||||||||||||||||||||||||||||||||||||||||
| 基本 | $ | (4.34) | $ | 0.58 | $ | 0.08 | $ | 0.98 | $ | (11.43) | |||||||||||||||||||||||||||||||||||||
| 稀释的 | $ | (4.34) | $ | 0.58 | $ | 0.08 | $ | 0.98 | $ | (11.43) | |||||||||||||||||||||||||||||||||||||
| 变量营销利润 | |||||||||||||||||||||||||||||||||||||||||||||||
| 总收入 | $ | 260.8 | $ | 210.1 | $ | 167.8 | $ | 134.4 | $ | 155.2 | 68% | ||||||||||||||||||||||||||||||||||||
变量营销费用 (1) (2) | $ | (183.6) | $ | (139.2) | $ | (98.4) | $ | (73.8) | $ | (87.5) | 110% | ||||||||||||||||||||||||||||||||||||
变量营销利润率 (2) | $ | 77.2 | $ | 70.9 | $ | 69.4 | $ | 60.6 | $ | 67.7 | 14% | ||||||||||||||||||||||||||||||||||||
变量营销利润率占营业收入的百分比 (2) | 30% | 34% | 41% | 45% | 44% | ||||||||||||||||||||||||||||||||||||||||||
调整后EBITDA(2) | $ | 26.9 | $ | 23.5 | $ | 21.6 | $ | 15.5 | $ | 21.8 | 23% | ||||||||||||||||||||||||||||||||||||
营业收入调整后EBITDA利润率 (2) | 10% | 11% | 13% | 12% | 14% | ||||||||||||||||||||||||||||||||||||||||||
调整后净利润(2) | $ | 10.9 | $ | 7.2 | $ | 9.2 | $ | 3.6 | $ | 7.9 | 38% | ||||||||||||||||||||||||||||||||||||
每股调整后净利润 分享 (2) | $ | 0.80 | $ | 0.54 | $ | 0.70 | $ | 0.28 | $ | 0.61 | 31% | ||||||||||||||||||||||||||||||||||||
| (1) | 代表销售和营销费用中可变成本对广告、直接营销和相关费用的比例。不包括一般管理费用、固定成本和与人员相关的费用。 | ||||
| (2) | 可变营销费用、可变营销利润、可变营销利润占营业收入的比例、调整后的EBITDA、调整后的EBITDA占营业收入的比例、调整后的净利润和每股调整后的净利润是非GAAP衡量指标。请参阅下方的"lendingtree的非GAAP措施与GAAP的调和"和"lendingtree的财务报告原则"获取更多信息。 | ||||
| Q3.2024 | 2 | |||||||||||||
2024年第三季度合并业绩
260.8百万美元的综合营业收入比去年同期增长了68%，主要由于保险营收增长了210%。
我们录得GAAP净亏损为$(58.0)万美元，每股稀释后亏损$(4.34)。其中包括非现金投资减值58.4百万美元。
变量营销保证金为7720万美元，较去年增长14%。保险业务增长强劲，但消费和家庭板块下滑。
调整后的EBITDA为26.9百万美元。
经调整后的净利润为1090万美元，相当于每股0.80美元。
| Q3.2024 | 3 | |||||||||||||
细分市场结果
| （百万） | 2024 | 2023 | 同比 | ||||||||||||||||||||||||||||||||||||||||||||
| Q3 | Q2 | Q1 | Q4 | Q3 | 百分比变动 | ||||||||||||||||||||||||||||||||||||||||||
首页 (1) | |||||||||||||||||||||||||||||||||||||||||||||||
| 营业收入 | $ | 32.2 | $ | 32.2 | $ | 30.4 | $ | 25.1 | $ | 33.4 | (4)% | ||||||||||||||||||||||||||||||||||||
| 业务板块利润 | $ | 9.3 | $ | 9.3 | $ | 9.6 | $ | 8.1 | $ | 11.3 | (18)% | ||||||||||||||||||||||||||||||||||||
| 营业收入利润率% | 29% | 29% | 32% | 32% | 34% | ||||||||||||||||||||||||||||||||||||||||||
消费大麻营业收入净额 (2) | |||||||||||||||||||||||||||||||||||||||||||||||
| 营业收入 | $ | 59.5 | $ | 55.9 | $ | 51.5 | $ | 49.5 | $ | 67.3 | (12)% | ||||||||||||||||||||||||||||||||||||
| 业务板块利润 | $ | 28.0 | $ | 26.9 | $ | 27.4 | $ | 28.9 | $ | 34.4 | (19)% | ||||||||||||||||||||||||||||||||||||
| 营业收入的各区段利润率 | 47% | 48% | 53% | 58% | 51% | ||||||||||||||||||||||||||||||||||||||||||
保险 (3) | |||||||||||||||||||||||||||||||||||||||||||||||
| 营业收入 | $ | 169.1 | $ | 122.1 | $ | 85.9 | $ | 59.6 | $ | 54.5 | 210% | ||||||||||||||||||||||||||||||||||||
| 业务板块利润 | $ | 41.4 | $ | 36.4 | $ | 33.4 | $ | 25.2 | $ | 23.4 | 77% | ||||||||||||||||||||||||||||||||||||
| 营业收入的各区段利润率 | 24% | 30% | 39% | 42% | 43% | ||||||||||||||||||||||||||||||||||||||||||
其他类别 (4) | |||||||||||||||||||||||||||||||||||||||||||||||
| 营业收入 | $ | — | $ | — | $ | — | $ | 0.1 | $ | — | —% | ||||||||||||||||||||||||||||||||||||
| （损失）利润 | $ | — | $ | (0.1) | $ | — | $ | (0.1) | $ | — | —% | ||||||||||||||||||||||||||||||||||||
| 总费用 | |||||||||||||||||||||||||||||||||||||||||||||||
| 营业收入 | $ | 260.8 | $ | 210.1 | $ | 167.8 | $ | 134.4 | $ | 155.2 | 68% | ||||||||||||||||||||||||||||||||||||
| 业务板块利润 | $ | 78.6 | $ | 72.5 | $ | 70.5 | $ | 62.2 | $ | 69.1 | 14% | ||||||||||||||||||||||||||||||||||||
| 营业收入利润率 | 30% | 35% | 42% | 46% | 45% | ||||||||||||||||||||||||||||||||||||||||||
品牌营销费用 (5) | $ | (1.4) | $ | (1.6) | $ | (1.1) | $ | (1.6) | $ | (1.4) | —% | ||||||||||||||||||||||||||||||||||||
| 变量营销利润 | $ | 77.2 | $ | 70.9 | $ | 69.4 | $ | 60.6 | $ | 67.7 | 14% | ||||||||||||||||||||||||||||||||||||
| 变量营销利润率%的营业收入 | 30% | 34% | 41% | 45% | 44% | ||||||||||||||||||||||||||||||||||||||||||
| (1) | 家庭业务包括以下产品：购房按揭、再融资按揭和住房抵押贷款。 | ||||
| (2) | 消费业务包括以下产品：信用卡、个人贷款、小额企业贷款、学生贷款、汽车贷款、存入资金账户和债务结算。 | ||||
| (3) | 保险部门包括保险报价产品和保险政策销售。 | ||||
| (4) | 其他类别主要包括未分配给特定业务的营销收入和相关费用。 | ||||
| (5) | 品牌营销费用代表归因于变量成本的销售和营销费用部分，用于支付广告、直接营销和与分配给各业务产品相关的费用。此指标不包括一般开支、固定成本和人员相关费用。 | ||||
| Q3.2024 | 4 | |||||||||||||
家居
家庭部门的营业收入为3220万美元，利润为930万美元，同比分别下降4%和18%。家庭资产仍然是消费者和我们的贷方伙伴关注的焦点，营业收入为2100万美元，同比增长5%。然而，对主要抵押贷款的需求仍然保持低迷，因为目前较高水平的抵押贷款利率和历史低位的现有住宅销售量限制了寻求购买贷款的客户数量。
消费
我们的消费业务营业收入为5950万美元，同比下降12%，而利润为2800万美元，下降19%。部门利润率为47%，而一年前为51%。小型企业和个人贷款的营收增长被去年信用卡产品的下降所抵消。
小型企业的营业收入比一年前增长了32％，由于我们的合作伙伴和在企业上的战略投资使得贷款需求保持稳定，业务展现了良好的营收增长和改善的单位经济，使我们能够增加投资于行销以吸引更多高质量的企业主寻找贷款。与全数位交易所体验相比，我们的主管销售团队一直保持著更高的贷款成交率、更好的单位经济以及来自贷方奖金计划和续贷费的额外营收机会。根据积极的成果，我们已在整个年份积极发展这支团队，并将继续投资以抓住我们的贷方日益增加的需求。我们还扩展了我们的产品系列，包括企业信用卡和保险产品，以更好地满足我们的客户需求并增加交叉销售机会。
个人贷款的营业收入为2780万美元，同比增长5%。我们继续依靠营销活动来吸引更多的消费者，因为我们的贷款合作伙伴的信贷需求保持稳定。最近，我们已经与计划扩大信贷标准以为我们的客户提供更多贷款选择的贷款人进行了积极的谈话，这反过来将为我们带来更多的转化机会。如果联邦储备继续执行当前计划中降低短期利率的行动，我们相信这将在未来几个季度大幅有利于我们的个人贷款产品。
保险
年收入达16910万元，增长210%，各部门利润达4140万元，同比增长77%，但本季节段利润率下降到24%，由于来自部分航空公司的需求激增，媒体成本增加，导致我们的营销活动更多地投入了成本最高的渠道，以保持成交量的质量。
We have previously called-out the above average margin this segment generated as carrier demand was depressed over the last two years. When carrier budgets contracted, we were able to exit from our highest cost channels and meet that reduced demand. Now that carriers have dramatically increased their spend with us compared to last year, we have re-entered those channels to meet the sharp increase, driving a significant improvement in segment profit dollars despite a lower overall segment margin.
| Q3.2024 | 5 | |||||||||||||
We expect Insurance will generate incremental revenue and segment profit growth into 2025. We have seen a small collection of carriers driving the bulk of spend on our network this year, and some large population states are still seeing limited demand from carriers due to concerns over rate adequacy. We believe this creates a beneficial growth backdrop for next year, as more carriers spending on our network along with targeting of consumers in those lower demand areas providing an opportunity for additional upside. We will continue to run this business with a keen focus on growing margin dollars, seeking to best serve both the historically high level of consumers looking for new insurance products across the country as well as our partners.
Balance Sheet and Liquidity
Our cash balance was $97 million at quarter end, up from $67 million in the second quarter. Our outstanding July 2025 convertible note principal balance is $115 million. We believe the combination of excess cash on our balance sheet, the undrawn $50 million commitment from our Apollo term loan and future free cashflow will allow us to comfortably meet this maturity.
As we continue to delever by paying down debt and growing our cash balance with free cashflow, we remain focused on improving the efficiency of our capital structure. We strive to run the company through a normal business cycle with net leverage below 4x, and believe closer to 3x is a prudent target to achieve over time. As the delevering process plays out, we should be able to reduce the company's interest expense burden on our remaining debt, thus improving our free cashflow conversion from AEBITDA to drive shareholder value.
Financial Outlook*
Today we are updating our outlook for full-year 2024, which implies the following fourth quarter outlook:
Full-year 2024:
▪Revenue of $870 - $880 million versus the prior range of $830 - $870 million
▪Variable Marketing Margin of $287 - $292 million, compared to $280 - $300 million previously
▪Adjusted EBITDA of $92 - $95 million versus $85 - $95 million previously
Fourth-quarter 2024:
▪Revenue: $231 - $241 million
▪Variable Marketing Margin: $69 - $74 million
▪Adjusted EBITDA: $20 - $23 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.
| Q3.2024 | 6 | |||||||||||||
Conclusion
We are thrilled with the strong AEBITDA growth we produced in the third quarter. As seen in our updated financial outlook, we expect these year-over-year increases to flow into the fourth quarter. Our Insurance business is generating record levels of revenue and VMD and should maintain momentum into 2025. We are optimistic forecasted easing of interest rates by the Fed along with a stable economy will benefit our Consumer and Home segments next year. The outlook for growth across all of our reportable segments, coupled with ongoing expense discipline and targeted investment initiatives, lays the groundwork for continued improvement in our financial results.
Thank you for your continued support.
Sincerely,
Doug Lebda Jason Bengel
Chairman & CEO CFO
Investor Relations: investors@lendingtree.com | Media Relations: press@lendingtree.com | ||||
| Q3.2024 | 7 | |||||||||||||
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||||||
| Revenue | $ | 260,789 | $ | 155,188 | $ | 638,697 | $ | 538,149 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) (1) | 9,372 | 7,570 | 26,328 | 30,632 | |||||||||||||||||||
Selling and marketing expense (1) | 193,542 | 97,244 | 450,105 | 350,420 | |||||||||||||||||||
General and administrative expense (1) | 26,680 | 26,380 | 79,594 | 92,223 | |||||||||||||||||||
Product development (1) | 11,190 | 10,840 | 33,421 | 36,096 | |||||||||||||||||||
| Depreciation | 4,584 | 4,760 | 13,852 | 14,239 | |||||||||||||||||||
| Amortization of intangibles | 1,466 | 1,981 | 4,422 | 6,012 | |||||||||||||||||||
| Goodwill impairment | — | 38,600 | — | 38,600 | |||||||||||||||||||
Restructuring and severance (1) | 273 | 1,955 | 498 | 9,967 | |||||||||||||||||||
| Litigation settlements and contingencies | 3,762 | (150) | 3,791 | 350 | |||||||||||||||||||
| Total costs and expenses | 250,869 | 189,180 | 612,011 | 578,539 | |||||||||||||||||||
| Operating income (loss) | 9,920 | (33,992) | 26,686 | (40,390) | |||||||||||||||||||
| Other income (expense), net: | |||||||||||||||||||||||
| Interest (expense) income, net | (10,060) | (7,097) | (17,899) | 10,992 | |||||||||||||||||||
| Other expense | (57,391) | (110,910) | (55,305) | (108,637) | |||||||||||||||||||
| Loss before income taxes | (57,531) | (151,999) | (46,518) | (138,035) | |||||||||||||||||||
| Income tax (expense) benefit | (447) | 3,534 | (2,692) | 2,912 | |||||||||||||||||||
| Net loss and comprehensive loss | $ | (57,978) | $ | (148,465) | $ | (49,210) | $ | (135,123) | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 13,349 | 12,993 | 13,236 | 12,919 | |||||||||||||||||||
| Diluted | 13,349 | 12,993 | 13,236 | 12,919 | |||||||||||||||||||
| Net loss per share: | |||||||||||||||||||||||
| Basic | $ | (4.34) | $ | (11.43) | $ | (3.72) | $ | (10.46) | |||||||||||||||
| Diluted | $ | (4.34) | $ | (11.43) | $ | (3.72) | $ | (10.46) | |||||||||||||||
(1) Amounts include non-cash compensation, as follows: | |||||||||||||||||||||||
| Cost of revenue | $ | 62 | $ | 66 | $ | 231 | $ | 311 | |||||||||||||||
| Selling and marketing expense | 713 | 1,127 | 2,566 | 4,207 | |||||||||||||||||||
| General and administrative expense | 5,029 | 5,828 | 15,802 | 19,721 | |||||||||||||||||||
| Product development | 1,055 | 1,571 | 3,486 | 4,760 | |||||||||||||||||||
| Restructuring and severance | — | 1,262 | — | 2,328 | |||||||||||||||||||
| Q3.2024 | 8 | |||||||||||||
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, 2024 | December 31, 2023 | ||||||||||
| (in thousands, except par value and share amounts) | |||||||||||
| ASSETS: | |||||||||||
| Cash and cash equivalents | $ | 96,788 | $ | 112,051 | |||||||
| Restricted cash and cash equivalents | — | 5 | |||||||||
| Accounts receivable, net | 125,257 | 54,954 | |||||||||
| Prepaid and other current assets | 29,662 | 29,472 | |||||||||
| Total current assets | 251,707 | 196,482 | |||||||||
| Property and equipment, net | 44,713 | 50,481 | |||||||||
| Operating lease right-of-use assets | 53,706 | 57,222 | |||||||||
| Goodwill | 381,539 | 381,539 | |||||||||
| Intangible assets, net | 46,198 | 50,620 | |||||||||
| Equity investments | 1,700 | 60,076 | |||||||||
| Other non-current assets | 7,601 | 6,339 | |||||||||
| Total assets | $ | 787,164 | $ | 802,759 | |||||||
| LIABILITIES: | |||||||||||
| Current portion of long-term debt | $ | 126,266 | $ | 3,125 | |||||||
| Accounts payable, trade | 48,794 | 1,960 | |||||||||
| Accrued expenses and other current liabilities | 97,128 | 70,544 | |||||||||
| Total current liabilities | 272,188 | 75,629 | |||||||||
| Long-term debt | 346,203 | 525,617 | |||||||||
| Operating lease liabilities | 70,723 | 75,023 | |||||||||
| Deferred income tax liabilities | 3,664 | 2,091 | |||||||||
| Other non-current liabilities | 130 | 267 | |||||||||
| Total liabilities | 692,908 | 678,627 | |||||||||
Commitments and contingencies | |||||||||||
| 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; 16,715,821 and 16,396,911 shares issued, respectively, and 13,360,355 and 13,041,445 shares outstanding, respectively | 167 | 164 | |||||||||
| Additional paid-in capital | 1,247,180 | 1,227,849 | |||||||||
| Accumulated deficit | (886,913) | (837,703) | |||||||||
| Treasury stock; 3,355,466 and 3,355,466 shares, respectively | (266,178) | (266,178) | |||||||||
| Total shareholders' equity | 94,256 | 124,132 | |||||||||
| Total liabilities and shareholders' equity | $ | 787,164 | $ | 802,759 | |||||||
| Q3.2024 | 9 | |||||||||||||
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss and comprehensive loss | $ | (49,210) | $ | (135,123) | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Loss on impairments and disposal of assets | 787 | 5,255 | |||||||||
| Amortization of intangibles | 4,422 | 6,012 | |||||||||
| Depreciation | 13,852 | 14,239 | |||||||||
| Non-cash compensation expense | 22,085 | 31,327 | |||||||||
| Deferred income taxes | 1,573 | (4,289) | |||||||||
| Bad debt expense | 422 | 1,803 | |||||||||
| Amortization of debt issuance costs | 1,691 | 3,473 | |||||||||
| Write-off of previously-capitalized debt issuance costs | — | 2,373 | |||||||||
| Amortization of debt discount | 224 | — | |||||||||
| Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities | (2,624) | (3,118) | |||||||||
| Gain on settlement of convertible debt | (9,035) | (34,308) | |||||||||
| Loss on impairment of investments | 58,376 | 114,504 | |||||||||
| Loss on impairment of goodwill | — | 38,600 | |||||||||
| Changes in current assets and liabilities: | |||||||||||
| Accounts receivable | (70,726) | 18,276 | |||||||||
| Prepaid and other current assets | 138 | (525) | |||||||||
| Accounts payable, accrued expenses and other current liabilities | 74,445 | (11,878) | |||||||||
| Income taxes | (137) | 1,115 | |||||||||
| Other, net | (261) | (1,044) | |||||||||
| Net cash provided by operating activities | 46,022 | 46,692 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (8,398) | (9,928) | |||||||||
| Other | 2 | — | |||||||||
| Net cash used in investing activities | (8,396) | (9,928) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayment of term loan | (8,750) | (1,250) | |||||||||
| Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of stock options | (2,751) | (1,527) | |||||||||
| Repurchase of 0.50% Convertible Senior Notes | (158,839) | (156,294) | |||||||||
| Net proceeds from term loan | 125,000 | — | |||||||||
| Payment of debt costs | (4,152) | (1,079) | |||||||||
| Payment of original issue discount | (3,125) | — | |||||||||
| Other financing activities | (277) | — | |||||||||
| Net cash used in financing activities | (52,894) | (160,150) | |||||||||
| Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (15,268) | (123,386) | |||||||||
| Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 112,056 | 298,969 | |||||||||
| Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | $ | 96,788 | $ | 175,583 | |||||||
| Q3.2024 | 10 | |||||||||||||
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 | |||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||
| (in thousands) | |||||||||||||||||
| Selling and marketing expense | $ | 193,542 | $ | 148,387 | $ | 108,176 | $ | 83,168 | $ | 97,244 | |||||||
Non-variable selling and marketing expense (1) | (9,976) | (9,140) | (9,855) | (9,407) | (9,805) | ||||||||||||
| Variable marketing expense | $ | 183,566 | $ | 139,247 | $ | 98,321 | $ | 73,761 | $ | 87,439 | |||||||
| (1) | 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. | ||||
| Q3.2024 | 11 | |||||||||||||
LENDINGTREE'S RECONCILIATION OF NON-GAAP MEASURES TO GAAP
Variable Marketing Margin
Below is a reconciliation of net (loss) income, the most directly comparable GAAP measure, to variable marketing margin and net (loss) income % of revenue to variable marketing margin % of revenue. See "LendingTree's Principles of Financial Reporting" for further discussion of the Company's use of these non-GAAP measures.
| Three Months Ended | |||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Net (loss) income | $ | (57,978) | $ | 7,752 | $ | 1,016 | $ | 12,719 | $ | (148,465) | |||||||
| Net (loss) income % of revenue | (22)% | 4% | 1% | 9% | (96)% | ||||||||||||
| Adjustments to reconcile to variable marketing margin: | |||||||||||||||||
| Cost of revenue | 9,372 | 8,411 | 8,545 | 8,126 | 7,570 | ||||||||||||
Non-variable selling and marketing expense (1) | 9,976 | 9,140 | 9,855 | 9,407 | 9,805 | ||||||||||||
| General and administrative expense | 26,680 | 27,118 | 25,796 | 25,477 | 26,380 | ||||||||||||
| Product development | 11,190 | 10,374 | 11,857 | 11,101 | 10,840 | ||||||||||||
| Depreciation | 4,584 | 4,601 | 4,667 | 4,831 | 4,760 | ||||||||||||
| Amortization of intangibles | 1,466 | 1,467 | 1,489 | 1,682 | 1,981 | ||||||||||||
| Goodwill impairment | — | — | — | — | 38,600 | ||||||||||||
| Restructuring and severance | 273 | 202 | 23 | 151 | 1,955 | ||||||||||||
| Litigation settlements and contingencies | 3,762 | (7) | 36 | 38 | (150) | ||||||||||||
| Interest expense (income), net | 10,060 | 1,201 | 6,638 | (10,693) | 7,097 | ||||||||||||
| Other expense (income) | 57,391 | (1,052) | (1,034) | (2,644) | 110,910 | ||||||||||||
| Income tax expense (benefit) | 447 | 1,686 | 559 | 397 | (3,534) | ||||||||||||
| Variable marketing margin | $ | 77,223 | $ | 70,893 | $ | 69,447 | $ | 60,592 | $ | 67,749 | |||||||
| Variable marketing margin % of revenue | 30% | 34% | 41% | 45% | 44% | ||||||||||||
| (1) | 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. | ||||
| Q3.2024 | 12 | |||||||||||||
LENDINGTREE'S RECONCILIATION OF NON-GAAP MEASURES TO GAAP
Adjusted EBITDA
Below is a reconciliation of net (loss) income, the most directly comparable GAAP measure, to adjusted EBITDA and net (loss) income % of revenue to adjusted EBITDA % of revenue. See "LendingTree's Principles of Financial Reporting" for further discussion of the Company's use of these non-GAAP measures.
| Three Months Ended | |||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Net (loss) income | $ | (57,978) | $ | 7,752 | $ | 1,016 | $ | 12,719 | $ | (148,465) | |||||||
| Net (loss) income % of revenue | (22)% | 4% | 1% | 9% | (96)% | ||||||||||||
| Adjustments to reconcile to adjusted EBITDA: | |||||||||||||||||
| Amortization of intangibles | 1,466 | 1,467 | 1,489 | 1,682 | 1,981 | ||||||||||||
| Depreciation | 4,584 | 4,601 | 4,667 | 4,831 | 4,760 | ||||||||||||
| Restructuring and severance | 273 | 202 | 23 | 151 | 1,955 | ||||||||||||
| Loss on impairments and disposal of assets | 6 | 413 | 368 | 182 | 88 | ||||||||||||
| Loss on impairment of equity investments | 58,376 | — | — | — | 113,064 | ||||||||||||
| Goodwill impairment | — | — | — | — | 38,600 | ||||||||||||
| Non-cash compensation | 6,859 | 7,437 | 7,789 | 8,177 | 8,592 | ||||||||||||
| Litigation settlements and contingencies | 3,762 | (7) | 36 | 38 | (150) | ||||||||||||
| Interest expense (income), net | 10,060 | 1,201 | 6,638 | (10,693) | 7,097 | ||||||||||||
| Dividend income | (982) | (1,225) | (1,034) | (2,021) | (2,154) | ||||||||||||
| Income tax expense (benefit) | 447 | 1,686 | 559 | 397 | (3,534) | ||||||||||||
| Adjusted EBITDA | $ | 26,873 | $ | 23,527 | $ | 21,551 | $ | 15,463 | $ | 21,834 | |||||||
| Adjusted EBITDA % of revenue | 10% | 11% | 13% | 12% | 14% | ||||||||||||
| Q3.2024 | 13 | |||||||||||||
LENDINGTREE'S RECONCILIATION OF NON-GAAP MEASURES TO GAAP
Adjusted Net Income
Below is a reconciliation of net (loss) income, the most directly comparable GAAP measure, to adjusted net income and net income (loss) per diluted share to adjusted net income per share. See "LendingTree's Principles of Financial Reporting" for further discussion of the Company's use of these non-GAAP measures.
| Three Months Ended | |||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||
| Net (loss) income | $ | (57,978) | $ | 7,752 | $ | 1,016 | $ | 12,719 | $ | (148,465) | |||||||
| Adjustments to reconcile to adjusted net income: | |||||||||||||||||
| Restructuring and severance | 273 | 202 | 23 | 151 | 1,955 | ||||||||||||
| Goodwill impairment | — | — | — | — | 38,600 | ||||||||||||
| Loss on impairments and disposal of assets | 6 | 413 | 368 | 182 | 88 | ||||||||||||
| Loss on impairment of equity investments | 58,376 | — | — | — | 113,064 | ||||||||||||
| Non-cash compensation | 6,859 | 7,437 | 7,789 | 8,177 | 8,592 | ||||||||||||
| Litigation settlements and contingencies | 3,762 | (7) | 36 | 38 | (150) | ||||||||||||
| Gain on extinguishment of debt | (416) | (8,619) | — | (17,665) | — | ||||||||||||
| Income tax benefit from adjusted items | — | — | — | — | (5,764) | ||||||||||||
| Adjusted net income | $ | 10,882 | $ | 7,178 | $ | 9,232 | $ | 3,602 | $ | 7,920 | |||||||
| Net (loss) income per diluted share | $ | (4.34) | $ | 0.58 | $ | 0.08 | $ | 0.98 | $ | (11.43) | |||||||
| Adjustments to reconcile net (loss) income to adjusted net income | 5.16 | (0.04) | 0.62 | (0.70) | 12.04 | ||||||||||||
| Adjustments to reconcile effect of dilutive securities | (0.02) | — | — | — | — | ||||||||||||
| Adjusted net income per share | $ | 0.80 | $ | 0.54 | $ | 0.70 | $ | 0.28 | $ | 0.61 | |||||||
| Adjusted weighted average diluted shares outstanding | 13,555 | 13,407 | 13,276 | 13,020 | 12,999 | ||||||||||||
| Effect of dilutive securities | 206 | — | — | — | 6 | ||||||||||||
| Weighted average diluted shares outstanding | 13,349 | 13,407 | 13,276 | 13,020 | 12,993 | ||||||||||||
| Effect of dilutive securities | — | 150 | 176 | 12 | — | ||||||||||||
| Weighted average basic shares outstanding | 13,349 | 13,257 | 13,100 | 13,008 | 12,993 | ||||||||||||
| Q3.2024 | 14 | |||||||||||||
LENDINGTREE’S PRINCIPLES OF FINANCIAL REPORTING
LendingTree reports the following non-GAAP measures as supplemental to GAAP:
•Variable marketing expense
•Variable marketing margin
•Variable marketing margin % of revenue
•Earnings Before Interest, Taxes, Depreciation and Amortization, as adjusted for certain items discussed below ("Adjusted EBITDA")
•Adjusted EBITDA % of revenue
•Adjusted net income
•Adjusted net income per share
Variable marketing expense, variable marketing margin and variable marketing margin % of revenue are related measures of the effectiveness of the Company's marketing efforts. Variable marketing margin is a measure of the efficiency of the Company’s operating model, measuring revenue after subtracting variable marketing expense. Variable marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing, and related expenses, and excludes overhead, fixed costs, and personnel related expenses. The Company’s operating model is highly sensitive to the amount and efficiency of variable marketing expenditures, and the Company’s proprietary systems are able to make rapidly changing decisions concerning the deployment of variable marketing expenditures (primarily but not exclusively online and mobile advertising placement) based on proprietary and sophisticated analytics.
Adjusted EBITDA and adjusted EBITDA % of revenue are primary metrics by which LendingTree evaluates the operating performance of its businesses, on which its marketing expenditures and internal budgets are based and, in the case of adjusted EBITDA, by which management and many employees are compensated in most years.
Adjusted net income and adjusted net income per share supplement GAAP net income and GAAP net income per diluted share by enabling investors to make period to period comparisons of those components of the most directly comparable GAAP measures that management believes better reflect the underlying financial performance of the Company’s business operations during particular financial reporting periods. Adjusted net income and adjusted net income per share exclude certain amounts, such as non-cash compensation, non-cash asset impairment charges, gain/loss on disposal of assets, gain/loss on investments, restructuring and severance, litigation settlements and contingencies, acquisition and disposition income or expenses including with respect to changes in fair value of contingent consideration, gain/loss on extinguishment of debt, contributions to the LendingTree Foundation, one-time items which are recognized and recorded under GAAP in particular periods but which might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded, the effects to income taxes of the aforementioned adjustments, any excess tax benefit or expense associated with stock-based compensation recorded in net income in conjunction with FASB pronouncement ASU 2016-09, and income tax (benefit) expense from a full valuation allowance. LendingTree believes that adjusted net income and adjusted net income per share are useful financial indicators that provide a different view of the financial performance of the Company than adjusted EBITDA (the primary metric by which LendingTree evaluates the operating performance of its businesses) and the GAAP measures of net income and GAAP net income per diluted share.
| Q3.2024 | 15 | |||||||||||||
These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. LendingTree provides and encourages investors to examine the reconciling adjustments between the GAAP and non-GAAP measures set forth above.
Definition of LendingTree's Non-GAAP Measures
Variable marketing margin is defined as revenue less variable marketing expense. Variable marketing expense is defined as the expense attributable to variable costs paid for advertising, direct marketing and related expenses, and excluding overhead, fixed costs and personnel-related expenses. The majority of these variable advertising costs are expressly intended to drive traffic to our websites and these variable advertising costs are included in selling and marketing expense on the Company's consolidated statements of operations and consolidated income.
EBITDA is defined as net income from continuing operations excluding interest, income taxes, amortization of intangibles and depreciation.
Adjusted EBITDA is defined as EBITDA excluding (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on disposal of assets, (4) gain/loss on investments, (5) restructuring and severance expenses, (6) litigation settlements and contingencies, (7) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), (8) contributions to the LendingTree Foundation (9) dividend income, and (10) one-time items.
Adjusted net income is defined as net income (loss) excluding (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on disposal of assets, (4) gain/loss on investments, (5) restructuring and severance expenses, (6) litigation settlements and contingencies, (7) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), (8) gain/loss on extinguishment of debt, (9) contributions to the LendingTree Foundation, (10) one-time items, (11) the effects to income taxes of the aforementioned adjustments, (12) any excess tax benefit or expense associated with stock-based compensation recorded in net income in conjunction with FASB pronouncement ASU 2016-09, and (13) income tax (benefit) expense from a full valuation allowance.
Adjusted net income per share is defined as adjusted net income divided by the adjusted weighted average diluted shares outstanding. For periods which the Company reports GAAP loss from continuing operations, the effects of potentially dilutive securities are excluded from the calculation of net loss per diluted share from continuing operations because their inclusion would have been anti-dilutive. In periods where the Company reports GAAP loss from continuing operations but reports positive non-GAAP adjusted net income, the effects of potentially dilutive securities are included in the denominator for calculating adjusted net income per share if their inclusion would be dilutive.
LendingTree endeavors to compensate for the limitations of these non-GAAP measures by also providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
One-Time Items
Adjusted EBITDA and adjusted net income are adjusted for one-time items, if applicable. Items are considered one-time in nature if they are non-recurring, infrequent or unusual, and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules. For the periods presented in this report, there are no adjustments for one-time items.
| Q3.2024 | 16 | |||||||||||||
Non-Cash Expenses That Are Excluded From LendingTree's Adjusted EBITDA and Adjusted Net Income
Non-cash compensation expense consists principally of expense associated with the grants of restricted stock, restricted stock units and stock options. These expenses are not paid in cash and LendingTree includes the related shares in its calculations of fully diluted shares outstanding. Upon settlement of restricted stock units, exercise of certain stock options or vesting of restricted stock awards, the awards may be settled on a net basis, with LendingTree remitting the required tax withholding amounts from its current funds. Cash expenditures for employer payroll taxes on non-cash compensation are included within adjusted EBITDA and adjusted net income.
Amortization of intangibles are non-cash expenses relating primarily to acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives. Amortization of intangibles are only excluded from adjusted EBITDA.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
The matters contained in the discussion above may be considered to be “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations or anticipations of LendingTree and members of our management team. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: adverse conditions in the primary and secondary mortgage markets and in the economy, particularly interest rates and inflation; default rates on loans, particularly unsecured loans; demand by investors for unsecured personal loans; the effect of such demand on interest rates for personal loans and consumer demand for personal loans; seasonality of results; potential liabilities to secondary market purchasers; changes in the Company's relationships with network partners, including dependence on certain key network partners; breaches of network security or the misappropriation or misuse of personal consumer information; failure to provide competitive service; failure to maintain brand recognition; ability to attract and retain consumers in a cost-effective manner; the effects of potential acquisitions of other businesses, including the ability to integrate them successfully with LendingTree’s existing operations; accounting rules related to excess tax benefits or expenses on stock-based compensation that could materially affect earnings in future periods; ability to develop new products and services and enhance existing ones; competition; effects of changing laws, rules or regulations on our business model; allegations of failure to comply with existing or changing laws, rules or regulations, or to obtain and maintain required licenses; failure of network partners or other affiliated parties to comply with regulatory requirements; failure to maintain the integrity of systems and infrastructure; liabilities as a result of privacy regulations; failure to adequately protect intellectual property rights or allegations of infringement of intellectual property rights; and changes in management. These and additional factors to be considered are set forth under “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2023, in our Quarterly Report on Form 10-Q for the period ended June 30, 2024, and in our other filings with the Securities and Exchange Commission. LendingTree undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.
| Q3.2024 | 17 | |||||||||||||