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LendingTree, Inc. (TREE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered broad-based strength: revenue $307.8M (+18% YoY, +23% QoQ), adjusted EBITDA $39.8M (+48% YoY), GAAP diluted EPS $0.73, adjusted EPS $1.70 .
  • Results materially beat Street: revenue vs consensus $278.4M* and adjusted EPS vs consensus $1.16*; Insurance revenue hit a record $203.5M (+20% YoY) though segment margins compressed on higher click mix .
  • Full-year 2025 guidance raised: revenue to $1.08–$1.09B (from $1.00–$1.05B), VMM to $337–$340M (from $329–$336M), adjusted EBITDA to $126–$128M (from $119–$126M) .
  • Strategic catalysts: debt refi into a new $475M five-year facility, net leverage down to 2.6x; management sees durable Insurance cycle, accelerating Consumer on concierge model, and AI-driven conversion tailwinds (LLMs 4–5x conversion vs legacy SEO) .

What Went Well and What Went Wrong

What Went Well

  • Record Insurance revenue $203.5M (+20% YoY); broadened carrier spend beyond top-3, with #4–#10 carriers up ~60% YoY, supporting cycle durability .
  • Consumer margins and growth improved: segment profit +26% YoY; small business revenue +50% YoY with 30% more loans closed via concierge sales; personal loans revenue $31.3M (+12% YoY) on widening lender credit appetite .
  • Strong operating leverage: adjusted EBITDA $39.8M (+48% YoY), adjusted EPS $1.70 (+113% YoY); management emphasized “driving operating leverage, keeping expenses under control” .

Management quotes:

  • “Our revenue of $308 million was our second highest in the company’s history…sixth consecutive quarter we have reported revenue growth” — CEO Scott Peyree .
  • “We will continue to maximize carrier budgets to take market share when it is accretive to segment profit” .
  • “Default [capital allocation] is going to be paying down debt…risk-free return of north of 8%” — CFO Jason Bengel .

What Went Wrong

  • Insurance segment margin compressed (23% vs 27% in Q2) as revenue mix skewed toward lower-margin clicks; strategy lifts VMM dollars but reduces margin percentage .
  • Legacy SEO volatility pressured industry-wide traffic quality; TREE highlighted turbulence and pivot to paid search and LLM placements .
  • Mortgage remains sluggish: Home revenue fell QoQ (–6%) amid high rates and low existing home sales; Home equity remains the key driver ($28.3M, +35% YoY) while primary mortgage/refi demand is near trough levels .

Financial Results

Consolidated performance vs prior periods

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$260.8 $250.1 $307.8
GAAP Net Income ($USD Millions)$(58.0) $8.9 $10.2
Net Income Margin (%)(22)% 4% 3%
Diluted EPS ($)$(4.34) $0.65 $0.73
Variable Marketing Margin ($USD Millions)$77.2 $83.6 $93.2
VMM % of Revenue30% 33% 30%
Adjusted EBITDA ($USD Millions)$26.9 $31.8 $39.8
Adjusted EBITDA % of Revenue10% 13% 13%
Adjusted EPS ($)$0.80 $1.13 $1.70

Segment breakdown

SegmentQ3 2024 Revenue ($MM)Q2 2025 Revenue ($MM)Q3 2025 Revenue ($MM)Q3 2024 Segment Profit ($MM)Q2 2025 Segment Profit ($MM)Q3 2025 Segment Profit ($MM)
Home$32.2 $40.4 $38.1 $9.3 $13.1 $11.8
Consumer$59.5 $62.5 $66.2 $28.0 $32.1 $35.2
Insurance$169.1 $147.2 $203.5 $41.4 $40.0 $47.6
Other— — — — — $(0.1)

KPIs and product metrics

KPIQ3 2025YoYQoQ
Home Equity Revenue ($MM)$28.3 +35% N/A
Small Business Loans ClosedN/A+30% N/A
Small Business Revenue GrowthN/A+50% N/A
Personal Loans Revenue ($MM)$31.3 +12% N/A
Home Insurance VMDN/A+80% N/A
Health Insurance VMDN/A+41% N/A
Cash & Cash Equivalents ($MM)$68.6 N/AN/A
Net Leverage2.6x N/AN/A

Results vs Wall Street consensus (S&P Global)

MetricQ3 2025 EstimateQ3 2025 Actual
Revenue ($USD Millions)$278.4*$307.8
Adjusted/Primary EPS ($)$1.16*$1.70

Values with * are from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$1.00–$1.05B $1.08–$1.09B Raised
Variable Marketing MarginFY 2025$329–$336M $337–$340M Raised
Adjusted EBITDAFY 2025$119–$126M $126–$128M Raised
RevenueQ4 2025N/A$280–$290M New
Variable Marketing MarginQ4 2025N/A$82–$85M New
Adjusted EBITDAQ4 2025N/A$29.5–$31.5M New
RevenueQ3 2025$273–$281M Actual $307.8M Beat vs guidance
VMMQ3 2025$86–$89M Actual $93.2M Beat vs guidance
Adjusted EBITDAQ3 2025$34–$36M Actual $39.8M Beat vs guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/technology initiativesNoted operational excellence; no explicit AI detail in PRs Agentic AI/LLMs to transform shopping; LLM traffic converts 4–5x vs legacy SEO Rising strategic focus
SEO vs LLM trafficNot highlighted Legacy SEO turbulence; pivot to paid search and LLM placements Transition underway
Insurance cycle/mixInsurance growth across products (homeowners/health) noted Cycle durable; broadened carrier spend beyond top-3; clicks lifting revenue but compressing margins Strong but margin-mix sensitive
Consumer credit appetiteGrowth despite restrictive environment Credit boxes broadly expanding; better close rates for prime/mid-prime Improving
Mortgage/refi outlookHome equity strength; high rates limiting first mortgages Refis could hockey-stick if rates fall near ~5.75%; lenders staffing via home equity Waiting for rate inflection
Capital allocationDeleveraging focus Default to debt paydown; optionality for buybacks/M&A Flexibility increased
Regulatory/legalQ1 included increased litigation reserve Ongoing litigation settlements reflected in non-GAAP reconciliations Managed impact

Management Commentary

  • “We have retaken a leadership position in the insurance marketplace…matching carriers with high-intent consumers to capture increasing share of carrier marketing budgets” — CEO Scott Peyree .
  • “Sequentially Q2 to Q3 insurance, VMD went up $8M…largely going to fall to EBITDA. That’s what we’re focused on, driving operating leverage” — CFO Jason Bengel .
  • “Our balance sheet continues to strengthen, with net leverage of 2.6x…successfully refinanced…new five-year $475M credit facility” — CFO Jason Bengel .
  • “Consumer segment led by 50% growth in Small Business…testing concierge sales platform in other products” — Shareholder Letter .

Q&A Highlights

  • Insurance cycle durability/margin mix: Management sees sustained carrier profitability and broadening spend; click-heavy periods compress margins but expand VMM dollars and EBITDA leverage .
  • Consumer segment trajectory: Concierge sales drove small business loan closures (+30% YoY) and higher margins; credit card margins normalized via TreeQual and targeted marketing .
  • Credit appetite: Lenders cautiously widening boxes; improved close rates in prime/mid-prime debt consolidation .
  • SEO/AI: Legacy SEO volatility; LLM/AI traffic converts 4–5x; pivot to paid search and AI placement strategies .
  • Mortgage/refi setup: Expect refi acceleration near ~5.75% mortgage rates; building broader lender network to capture demand when it turns .
  • Capital allocation/M&A: Default to debt reduction; opportunistic buybacks/bolt-on M&A if attractive .

Estimates Context

  • Q3 2025 beats: Revenue $307.8M vs $278.4M*; Adjusted/Primary EPS $1.70 vs $1.16*; indicates stronger demand and operating leverage, especially in Insurance and Consumer .
  • Forward view: Company implies Q4 revenue $280–$290M vs consensus $286.6M*; consensus Q4 primary EPS ~$0.87* and EBITDA ~$30.7M*; company guides adjusted EBITDA $29.5–$31.5M, broadly aligned with Street on EBITDA but without EPS guidance .
  • Implication: Street estimates likely revise higher for FY revenue, VMM, and adjusted EBITDA after the guide raise and Q3 upside.
    Values with * are from S&P Global.

Key Takeaways for Investors

  • Broad-based beat and guide raise support near-term positive revisions and sentiment; the Insurance cycle breadth and consumer concierge model are driving operating leverage .
  • Margin mix watch: Insurance margin compression from click mix is deliberate to maximize VMM dollars; expect margin normalization if click demand moderates .
  • Strategic optionality: New covenant-light $475M facility and 2.6x net leverage enable prudent debt paydown, with opportunistic buybacks/M&A as valuation/targets justify .
  • AI pivot: LLM-driven conversion and paid search proficiency are offsetting legacy SEO turbulence, a competitive advantage into 2026 .
  • Mortgage optionality: A refi inflection near ~5.75% could catalyze Home segment upside; TREE is expanding lender network to capture the wave .
  • Non-GAAP transparency: Clear reconciliations; litigation/other adjustments tracked and not characterized as “one-time” this period, maintain discipline on expense control .
  • Narrative/catalyst: Founder transition acknowledged; operational execution and raised FY guide are primary stock drivers near term; monitor carrier demand breadth and consumer credit box expansion for sustainability .