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LendingTree, Inc. (TREE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered broad-based growth: revenue $250.1M (+19% YoY, +4% QoQ), Adjusted EBITDA $31.8M (+35% YoY) and adjusted EPS $1.13, underpinned by double-digit increases in Insurance (+21%), Home (+25%), and Consumer (+12%) revenues .
  • Results beat Wall Street consensus: revenue and EPS exceeded S&P Global estimates; guidance reiterated a step-up into Q3 and raised full-year ranges versus prior outlook, a likely positive stock catalyst .
  • FY 2025 guidance raised to revenue $1.00–$1.05B, VMM $329–$336M, and Adjusted EBITDA $119–$126M (from $955–$995M, $319–$332M, and $116–$124M previously) .
  • Management highlighted strong carrier demand in Insurance, improving lender appetite in Consumer (personal loans, small business), and sustained Home Equity strength; AI adoption and evolving search/LLM traffic are seen as a structural opportunity to improve conversion and unit economics .

What Went Well and What Went Wrong

  • What Went Well

    • Insurance momentum: revenue +21% YoY to $147.2M; carriers “lean into” favorable underwriting and allocate larger budgets, with Q3 expected to be a record revenue quarter for Insurance per management .
    • Consumer execution: segment margin expanded to 51% and profit up 19%; personal loans revenue +14% YoY and small business revenue +61% YoY as lenders broaden credit boxes and concierge-led renewals grow lifetime value .
    • Home Equity leadership: Home revenue +25% YoY; Home Equity revenue +38% YoY on strong consumer demand and more lenders onboarded, lifting unit economics and margins .
    • Quotes: “Adjusted EBITDA up 35% YoY, fueled by strong revenue growth across all three segments” — Doug Lebda, CEO . “Q3 will be a record revenue for the insurance division… carriers are very happy” — Scott Peyree, COO . “We are going to be an AI-first company… early data is very, very encouraging” — Doug Lebda .

  • What Went Wrong

    • Insurance margin compression vs prior year: segment profit margin 27% vs 30% in Q2 2024 amid a competitive customer acquisition market; brand and search costs require continued optimization .
    • Variable marketing margin % down YoY: 33% vs 34% in Q2 2024; sustained interest expense ($10.4M) continues to weigh on GAAP earnings quality despite profitability .
    • Mortgage purchase/refi demand remains near trough levels given high rates; performance is concentrated in Home Equity, while primary mortgages stay suppressed .
    • Non-GAAP add-backs include litigation settlements and contingencies (e.g., $15.2M listed in Q2 reconciliations), highlighting ongoing legal expense variability that is excluded from Adjusted EBITDA/adjusted EPS .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$210.1 $239.7 $250.1
GAAP Diluted EPS ($USD)$0.58 $(0.92) $0.65
Variable Marketing Margin ($USD Millions)$70.9 $77.7 $83.6
Variable Marketing Margin % of Revenue34% 32% 33%
Adjusted EBITDA ($USD Millions)$23.5 $24.6 $31.8
Adjusted Net Income per Share ($USD)$0.54 $0.99 $1.13
Net Income Margin %4% (5)% 4%

Segment breakdown

SegmentQ2 2024 Revenue ($M)Q1 2025 Revenue ($M)Q2 2025 Revenue ($M)Q2 2024 Profit ($M)Q1 2025 Profit ($M)Q2 2025 Profit ($M)
Home$32.2 $37.0 $40.4 $9.3 $13.1 $13.1
Consumer$55.9 $56.0 $62.5 $26.9 $27.1 $32.1
Insurance$122.1 $146.7 $147.2 $36.4 $38.7 $40.0

KPIs (current quarter)

KPIQ2 2025
Variable Marketing Expense ($USD Millions)$166.5
Cash and Cash Equivalents ($USD Millions)$149.1
Net Leverage (x)3x
Interest Expense, net ($USD Millions)$10.4
Personal Loans Revenue ($USD Millions)$30.6
Small Business Revenue YoY Growth (%)+61%
Home Equity Revenue ($USD Millions)$30.3
Adjusted Weighted Avg Diluted Shares (M)13.650

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q3 2025N/A$273–$281 Initiated
Variable Marketing Margin ($USD Millions)Q3 2025N/A$86–$89 Initiated
Adjusted EBITDA ($USD Millions)Q3 2025N/A$34–$36 Initiated
Revenue ($USD Billions)FY 2025$0.955–$0.995 $1.00–$1.05 Raised
Variable Marketing Margin ($USD Millions)FY 2025$319–$332 $329–$336 Raised
Adjusted EBITDA ($USD Millions)FY 2025$116–$124 $119–$126 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesPrepared for FCC one-to-one consent; focus on operational excellence; 2024 groundwork on data stack and marketing optimization “AI-first company”; enterprise GPT for employees; rising high-intent traffic from LLMs/ChatGPT; content tailored for AI overviews; expect improved conversion and productivity Accelerating
Search/LLM traffic & SEOBroadening channels beyond search; optimizing mix as media costs stabilize Seeing tangible referral traffic from LLMs; higher-intent clicks via AI overviews; close relationship with Google; early data encouraging Improving
Insurance carrier demandRecord 2024; expected continued strong underwriting in 2025; margin bottomed in Q3 2024 Carriers allocating larger budgets; Q3 to be a record revenue quarter for Insurance; competitive environment persists Strengthening demand; competitive intensity stable
Personal loansSecond consecutive YoY growth in Q4; +16% YoY in Q1 with 26% volume growth +14% YoY revenue; 37 lender “expansions” vs 4 “contractions” in Q2; lenders widening buy boxes Improving
Small business lending+45% YoY in Q4; concierge investment boosted approvals, bonuses and renewals +61% YoY revenue; 40% YoY loans closed; concierge driving LTV and renewals; SBA partnerships Accelerating
Home equity vs primary mortgageHome Equity strength; primary mortgage subdued in Q1; macro rates high Home Equity +38% YoY; purchase/refi demand near trough; strength concentrated in second-lien products Mixed: HE strong, primary mortgage weak
Regulatory/legalFCC one-to-one consent vacated (positive backdrop in Q1) Legal expenses reflected in non-GAAP reconciliations (e.g., litigation settlements in Q2) Normalizing regulation; legal costs variable

Management Commentary

  • Strategic focus: “Operational excellence… improved everything from how we build products to streamlining decision-making to building cost controls” — Doug Lebda .
  • Insurance outlook: “Q3 will be a record revenue for the insurance division… carriers are very happy” — Scott Peyree .
  • AI adoption: “We are going to be an AI-first company… effectively, all of our employees are using AI in their day jobs… early data is very, very encouraging” — Doug Lebda .
  • Expense discipline and productivity: “Custom GPT… almost like having your own personal developer… goal is to become more productive” — Jason Bengel .
  • Financial position: “Net leverage declining to 3x from 5x… strong AEBITDA growth… focused expense discipline” — Jason Bengel .

Q&A Highlights

  • Insurance: Management expects a significant step-up in Q3 revenue, already visible in July run-rates; competitive environment may modestly pressure margins, but carrier intent to acquire customers is high .
  • Personal loans: Strong execution plus lender appetite widening; internal tracking showed 37 credit-box expansions vs 4 contractions in Q2, signaling increased originations potential; rate cuts would be additive .
  • AI/search: GenAI/LLM channels are a net opportunity, driving high-quality traffic and higher intent; Google AI overviews increased query and click volumes; Tree aims to be an early mover in monetized AI platforms .
  • Guidance assumptions: No rate changes assumed; Home Equity strong with normal Q4 seasonality; Consumer steady with potential upside if credit opens; Insurance step-change in Q3 with strength sustained .
  • Competitive dynamic: A competitor’s reported contract loss not impacting Tree; model is on-demand customer acquisition without long-term committed spend .

Estimates Context

MetricConsensus (S&P Global)*ActualSurprise
Revenue ($USD Millions)$244.0*$250.1 Beat
Primary EPS ($USD)$0.982*$1.13 Beat
Primary EPS – # of Estimates6*N/A—
Revenue – # of Estimates6*N/A—

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Top-line momentum across all segments with sustained Insurance demand and improving lender appetite in Consumer; Home Equity remains the primary Home driver in a high-rate environment .
  • Strong execution and positive operating leverage lifted Adjusted EBITDA and adjusted EPS; variable marketing margin expanded sequentially and overall unit economics remain healthy .
  • Raised FY guidance and initiated Q3 guidance with sequential revenue/VMM/Adjusted EBITDA step-up — a constructive setup into the next print .
  • AI-first strategy and LLM/GenAI-driven traffic are emerging as real drivers of higher-intent customer acquisition and productivity gains across marketing and product development .
  • Insurance margins bear watching amid competitive bidding; management is optimizing channel mix to stabilize margins while capturing share .
  • Balance sheet improving: cash $149M and net leverage at ~3x; deleveraging underway to lower interest expense and increase financial flexibility .
  • Near-term trading: setup favors positive estimate revisions on revenue/EPS; medium-term thesis: compounding from AI-enabled efficiency and marketplace flywheel in small business/personal loans plus durable Insurance demand .