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LendingTree, Inc. (TREE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $261.5M, GAAP diluted EPS $0.55, Adjusted EPS $1.16, and Adjusted EBITDA $32.2M; results were well above the high end of guidance due to broad-based segment growth, especially Insurance (+188% YoY) .
  • Variable marketing margin (VMM) rose to $86.7M (33% of revenue), with Insurance segment margin improving by four points sequentially as media cost pressures abated .
  • Management introduced Q1 2025 guidance (Revenue $241–$248M; VMM $75–$79M; Adj. EBITDA $25–$27M) and FY 2025 guidance (Revenue $985–$1,025M; VMM $319–$336M; Adj. EBITDA $116–$126M), implying continued growth while normalizing Insurance margin efficiency .
  • Balance sheet leverage improved significantly: net leverage ended 2024 at 3.5x (vs. 5.3x in 2023), with ample liquidity to retire the remaining $115M convert due July 2025; management intends to lower cost of capital and improve FCF conversion in 2025 .

What Went Well and What Went Wrong

What Went Well

  • Insurance delivered record revenue ($171.7M, +188% YoY) and segment profit ($48.0M, +90% YoY); segment margin increased four points sequentially as media costs stabilized .
  • Home grew revenue 35% YoY on accelerating home equity demand; segment profit rose 44% YoY with margin at 34% .
  • Consumer grew revenue 12% YoY with small business (+45% YoY) and personal loans (+21% YoY) outperforming; concierge sales investment boosted approvals and bonus/renewal revenue streams .
  • CEO: “We are delighted to report the company finished 2024 on a very strong note…well ahead of our forecast” . CFO: “Net leverage ending the year at 3.5x…we intend to utilize to lower our cost of capital and improve free cashflow conversion” .

What Went Wrong

  • Consolidated VMM% contracted YoY (33% vs. 45%) due to elevated media costs amid exceptional Insurance demand, compressing margins vs. the year-ago period .
  • Insurance segment margin remained below prior-year levels (28% vs. 42%), reflecting re-entry into higher-cost channels to fulfill carrier demand .
  • GAAP net income declined YoY ($7.5M vs. $12.7M) and net income margin fell to 3% (vs. 9% YoY), despite sequential recovery from Q3’s impairment-driven loss .
  • Consumer segment margin moderated (51% vs. 58% YoY) as the company invested to gain wallet share ahead of credit box loosening expected in 2025 .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$210.1 $260.8 $261.5
GAAP Diluted EPS ($)$0.58 $(4.34) $0.55
Adjusted Net Income per Share ($)$0.54 $0.80 $1.16
Variable Marketing Margin ($USD Millions)$70.9 $77.2 $86.7
Variable Marketing Margin %34% 30% 33%
Adjusted EBITDA ($USD Millions)$23.5 $26.9 $32.2
Adjusted EBITDA % of Revenue11% 10% 12%
Net Income Margin %4% (22)% 3%

Segment breakdown (Q4 2024 vs prior periods):

SegmentRevenue ($M) Q4 2023Revenue ($M) Q3 2024Revenue ($M) Q4 2024YoYQoQSegment Profit ($M) Q4 2023Segment Profit ($M) Q3 2024Segment Profit ($M) Q4 2024YoYQoQ
Home$25.1 $32.2 $34.0 +35% +6% $8.1 $9.3 $11.7 +44% +26%
Consumer$49.5 $59.5 $55.6 +12% (7)% $28.9 $28.0 $28.2 (2)% +1%
Insurance$59.6 $169.1 $171.7 +188% +2% $25.2 $41.4 $48.0 +90% +16%
Other$0.1 — $0.2 +100% — $(0.1) — — +100% —

Selected KPIs (consolidated, quarterly):

KPIQ2 2024Q3 2024Q4 2024
Variable Marketing Expense ($M)$139.2 $183.6 $174.8
Variable Marketing Margin ($M)$70.9 $77.2 $86.7
Adjusted Net Income ($M)$7.2 $10.9 $15.8
Adjusted EBITDA ($M)$23.5 $26.9 $32.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Revenue ($M)Q4 2024$231–$241 $261.5 (Actual) Beat (above high end)
Variable Marketing Margin ($M)Q4 2024$69–$74 $86.7 (Actual) Beat (above high end)
Adjusted EBITDA ($M)Q4 2024$20–$23 $32.2 (Actual) Beat (above high end)
Revenue ($M)FY 2024$870–$880 $900.2 (Actual) Beat (raised/beat)
Variable Marketing Margin ($M)FY 2024$287–$292 $304.3 (Actual) Beat
Adjusted EBITDA ($M)FY 2024$92–$95 $104.1 (Actual) Beat
Revenue ($M)Q1 2025N/A$241–$248 New
Variable Marketing Margin ($M)Q1 2025N/A$75–$79 New
Adjusted EBITDA ($M)Q1 2025N/A$25–$27 New
Revenue ($M)FY 2025N/A$985–$1,025 New
Variable Marketing Margin ($M)FY 2025N/A$319–$336 New
Adjusted EBITDA ($M)FY 2025N/A$116–$126 New

Note: No explicit OpEx, OI&E, tax rate, dividends, or segment-specific guidance was provided beyond the above ranges .

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
Insurance cycle & marginsExtreme growth; VMM dollars prioritized; margin low-30s in growth; broadening carrier budgets Insurance revenue +210% YoY; VMM margin trough mid-20s; expected gradual margin recovery; focus on VMM dollars Record revenue; segment margin up 4 pts sequentially; modest growth expected in 2025; margins normalizing to low–mid 30s over time Improving margin; sustained robust demand
Consumer credit box & wallet shareStability after Q1 trough; leaning into personal loans; positioning for rate cuts; concierge scaling in SMB Sequential growth; lenders discussing loosening credit; SEO/SEM strategy resilient Double-digit personal loan growth; small business +45% YoY; margin normalizing to mid-high 40s in 2025 Gradual improvement; investment ahead of loosening
Home equity vs. mortgageHome equity steady; some decline YoY; refinance constrained Home equity 2/3 of Home revenue; +5% YoY; purchase/refi suppressed Home equity +48% YoY within Home; Home +35% YoY; stable long rates favor second liens Strength in home equity; purchase/refi still subdued
SEO/SEM & Google impactsPaid marketing focus; building SEO; working closely with Google Balanced traffic sources; AI-based Google bidding; not seeing headwinds SEO revenue +30% YoY; paid channels performing broadly Execution improving; diversified traffic
Regulatory (TCPA consent)Preparing for one-to-one consent; operational planning —Rule vacated by 11th Circuit; price increases tied to consent rolled back; favorable environment Regulatory overhang removed
Leverage & capital structureRepurchased converts; Apollo term loan; plan to retire 2025 notes Cash up; plan to reduce interest expense; target net leverage ~3x–4x Net leverage 3.5x; liquidity to retire remaining converts; plan to lower cost of capital & improve FCF Deleveraging progressing

Management Commentary

  • “We are delighted to report the company finished 2024 on a very strong note, generating $32 million of adjusted EBITDA in the fourth quarter, which was well ahead of our forecast.” — Doug Lebda, CEO .
  • “Our Insurance business delivered another outstanding quarter with revenue growth of 188% compared to the prior year period.” — Doug Lebda, CEO .
  • “Our financial profile improved materially in 2024 with net leverage ending the year at 3.5x…we intend to utilize [it] to lower our cost of capital and improve free cashflow conversion for shareholders.” — Jason Bengel, CFO .
  • “Our business has returned to broad-based growth…Home and Consumer segments grew revenue 35% and 12% YoY…exceptional Q4 performance in Insurance was powered by record revenue along with a four-percentage point sequential increase in segment margin.” — Scott Peyree, President & COO .

Q&A Highlights

  • Insurance outlook and margins: Management expects Insurance growth to moderate versus 2024’s “hockey stick,” but margins to normalize into low–mid 30% over time; Q4 margin improvement supports this path .
  • Pricing and TCPA consent: With the one-to-one consent rule vacated, previously communicated price increases tied to consent were rolled back; click product pricing remains market-dynamic .
  • Rates and Home/Consumer: Lower rates would benefit Home and Consumer; guidance assumes no material rate reduction; home equity remains primary focus near term .
  • SEO/SEM and Google: ~15–20% organic traffic; paid search and AI-based bidding with Google are performing strongly; SEO revenue up 30% YoY .
  • Consumer margin trajectory: Expect Consumer margin to normalize to mid–high 40s in 2025 while delivering double-digit revenue growth; SMB and personal loans lead growth .

Estimates Context

  • We attempted to retrieve Wall Street consensus estimates via S&P Global (EPS, revenue, EBITDA, target price, recommendation) for Q4 2024 and prior/future periods, but access was unavailable due to a daily request limit exceeded. As a result, we cannot provide comparisons versus consensus estimates in this recap. The quarter did materially exceed company guidance ranges for revenue, VMM, and Adjusted EBITDA, indicating a likely positive deviation versus prior expectations .

Key Takeaways for Investors

  • Q4 print was a decisive beat versus company guidance across revenue ($261.5M), VMM ($86.7M), and Adjusted EBITDA ($32.2M), with broad-based segment growth and Insurance margin improvement — a clear positive near-term catalyst .
  • Insurance remains the core growth engine; demand is robust with margin efficiency recovering, supporting sustained VMM dollar growth even as percentage margins normalize .
  • Home equity momentum and Consumer wallet share investments (personal loans, SMB concierge) set up 2025 for continued revenue growth, albeit with Consumer margin moderation versus Q4’s seasonality .
  • 2025 guide implies 9–14% revenue growth and 11–21% Adjusted EBITDA growth, with leverage trending lower and intent to reduce interest expense; improving FCF conversion could support equity value rerating .
  • Regulatory clarity (TCPA consent vacated) removes a potential structural headwind for Insurance lead monetization and pricing dynamics .
  • Near-term trading: Momentum + guide/Insurance narrative and leverage improvement are supportive; watch for any sign of Insurance demand moderation or media cost re-inflation. Medium-term thesis: Margin normalization plus diversified segment growth and deleveraging/FCF improvement underpin a durable recovery trajectory .