• Adjusted EBITDA: $32 million in Q4 2024, exceeding forecasts.
• Homeowners Insurance Revenue Growth: Up 175% year-over-year in Q4 2024.
• Home Equity Revenue Growth: Increased by 48% year-over-year in Q4 2024.
• Small Business Revenue Growth: Grew by 45% year-over-year in Q4 2024.
• Personal Loans and Auto Loans Revenue Growth: Both increased by 21% year-over-year in Q4 2024.
• Mortgage Revenue Growth: Up 12% year-over-year in Q4 2024.
• Net Leverage: Ended the year at 3.5 times trailing adjusted EBITDA.
• Adjusted EBITDA Growth Outlook: Forecasted 16% annual growth at the midpoint for the year.

• Warning! GuruFocus has detected 3 Warning Signs with TREE.

Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• LendingTree Inc (NASDAQ:TREE) reported a strong finish to 2024 with $32 million in adjusted EBITDA, surpassing forecasts.
• The Insurance segment was a significant driver of growth, with homeowners insurance revenue up 175% year-over-year.
• The company experienced year-over-year revenue growth in several key product offerings, including home equity (48%), small business (45%), personal loans (21%), and auto loans (21%).
• LendingTree Inc (NASDAQ:TREE) expects double-digit revenue growth to continue across all product segments in the first quarter of 2025.
• The company's balance sheet improved significantly, with net leverage ending the year at 3.5 times trailing adjusted EBITDA, and further reductions in debt are anticipated.

Negative Points

• The Insurance segment is expected to experience more modest growth in 2025 compared to other segments, with growth moderating as the year progresses.
• The credit card business remains challenging, reflecting broader industry trends.
• There is a potential for margin contraction in the Consumer segment in 2025 as the company invests for growth.
• The company faces potential headwinds from market conditions, such as high interest rates and inflation, which could impact growth.
• The impact of regulatory changes, such as the vacated TCPA rule, could have affected revenue from insurance and lending lead products if not reversed.

Q & A Highlights

Q: Can you explain the expected growth in the Insurance segment for 2025, considering the robust performance in 2024? A: Scott Peyree, COO and President of Marketplace Businesses, noted that while they expect more modest growth in 2025 compared to 2024, the Insurance segment will still perform well. The growth is expected to moderate as the year progresses due to tougher comparisons, but carriers remain in a growth position. The focus will also be on returning VMM margins to historical norms.

Q: What is the opportunity for price increases in the Insurance segment, especially after the TCPA ruling? A: Scott Peyree explained that price increases were initially planned in response to TCPA compliance costs, but these were not implemented after the ruling was vacated. The company aims for prices to rise in line with media costs over the long term.

Q: How should we view market share gains in the Insurance segment and the impact of interest rates on your full-year guidance? A: Scott Peyree stated that the top carriers continue to drive the market, and this trend is expected to persist. Douglas Lebda, CEO, added that stable or lower interest rates would benefit all business segments, particularly Home, by increasing consumer interest and lender flexibility.

Q: Can you discuss the impact of Google algorithm changes on your traffic and strategy? A: Douglas Lebda highlighted that about 15-20% of traffic is organic, with SEO being a part of it. The company has focused on high-quality content, which aligns with Google's emphasis on unique content. The SEO revenue increased by 30% year-over-year in Q4, indicating a positive trajectory.

Q: What are the key factors influencing the Consumer segment's growth and sustainability? A: Scott Peyree mentioned that the Consumer segment is seeing growth in small business and personal loans, with a strong direct sales force driving this. The credit card business remains challenging, but other areas like auto loans show momentum. Douglas Lebda added that market conditions and operational excellence are critical swing factors for growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.