TREE - Earnings call 4 2023 | LendingTree, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the LendingTree, Inc. Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Andrew Wessel, VP of Investor Relations and Corporate Development. ahead. go Please

Andrew Wessel

Lebda, and Trent the DD, Financial to joining of are everyone With Peyree, CEO; Thank and CFO. COO to good discuss on President Doug today call call on businesses; XXXX Chairman LendingTree's us and us Scott and you, Marketplace the morning LendingTree's Ziegler, Fourth Results. Quarter

of will earlier detailed on our shareholders that a to today. for read and As And to that reminder we everyone, Q&A. will letter we today's the have listeners focus purposes Relations assume posted website call, a letter Investor on

Before make I today's views remarks, call, over subject uncertainties, and are forward-looking for actual Doug during I discuss may for Any LendingTree's expectations to could the risks hand his from the LendingTree's differ call materially we future expressed and that we remind results that everyone today. performance. to statements

we reports described but the are in not SEC. face the periodic risks our with of all Many filed

discuss Doug a available on measures to comparable and And non-GAAP both letter, will measures I reconciliations on shareholder full today's website ahead. that, press to We for you and and today, variety with GAAP our the refer also please of call go release the non-GAAP definitions GAAP. of

Douglas Lebda

company. to and revenue Despite expense remain invest we maintain base, Andrew, strengthened margins. and our continue us you, call profitable fixed the our on XXXX, who the we to today. improving the on our Thank the In thank strategically to all you solidly reduced with are sheet, in simplified we business, challenges strategically ability navigate, balance

disruption. have segments operated our of period X All of X reportable historic

million model free elevated the our period rate same and of -- rapid $XX.X its as of a in business move cash proven And adjusted EBITDA at flow. year Following generated million again and this earned of $XX durability inflation. we time, this higher has interest

is factors last customers from year. throughout focus to the year, operating insurance on external In of broadly we our and pulled $XX.X increase the we our efficiency, December because began which hold into and much fourth take the continued in these lender our in quarter. strengthen steadily back softer to to million, insurance causing quarter chose earned us. has the partners a new segment normally As to anticipated Encouragingly, first for upturn margins quarter, seasonally

in and insurance prolonged home The inflationary by hard last have the the driven one after unprecedented cost, auto a lockdowns. following to over impact consumer, is market the endured many markets X COVID years cycle ways that loss

increases, numerous have Now passed through a spend. they marketing that insurers of to rounds more effectively pace price have robust returned of

new a shop to Fortunately, customers for year increasing with volumes policies continue our XX% ago. record levels to compared at

down to the at now efficient we the have in at for amount half manner of committed and remainder XX% possible our paid remain discount a these During convertible the of to the repurchased the of par our XXXX transaction $XXX original about quarter, notes million earlier retiring million most opportunistically discount, shareholders. $XXX notes completed the value, in a similar we to also we year. We

released Finally, improvement segment continued year. this the financial we compared to outlook the morning last in insurance assumes

dislocations partners. to home a at for segments and conservative taken consumer many tighter and housing be standards We believe have of view lending continued market consumer we what our the persistently in our

to fixed current positively line. costs bottom -- expense done we're EBITDA base, near to our adjusted forecasting operating due we pace revenue expect picture hold year impact from the our a grow at extensive rightsizing improves, work levels last as our now However, this the we've we will healthy would leverage

open questions. please operator, line for now And the

Operator

Instructions] [Operator

of question Kelly Jed first Oppenheimer. Our comes from

Jed Kelly

Great.

the share of the that the just about the if of maybe market Can One how of some may. on on back sort X, consumer segment. on just going then about talk much sort your going you cuts. of you in clawing out is what's losses Can is I the convert. you rate like how refinancing And growth the conversion versus improving impacts interest control talk about macro. based the how in Just then that it you potentially outlook the outlook push to looks and think Fed

Douglas Lebda

Sure.

that and of part consumer and have I we second home operational -- the it. supply I as say on What advertisers, and controlling would a take when Jed, and me look you on your controlling are LendingTree pulling outlook balance it all -- our not in back. pieces actually terms all the say your Let demand, of When of high at -- would is clients level, but of that this.

Obviously, all that we now into we rightsize that lean marketing, the rightsized one so can business in condition right. its is waiting And We marketing. now you're get that every segments bottom. credit of consumer is believe the better -- to at those for

anything from initiatives. improvements, rate conversion our any So

We have that's our to outlook robust example, really real and pipeline lenders our to some TreeQual our for baked initiative, liking a bit from fruit are and it there. little bear really in starting a

to in know bit can still the we happen, in that business. and baked a things some for little some we that we're So certain are invest we pretty the of going also

about comfortable guide So we're I feel the really, giving. really

in shown the think segment. also significant growth I it's

our As to the as is about a that bit. rates even people fall thing miss when business that little start soon

moves of and of interest home business rates. in the Our rate change with refinance

today bunch on need our through once a you need refinancing. X.XX, Scott of -- about there do improve make will for will, little want anything you tick you only borrowers to refinance it, X.X So rates, Trent and call them to a it coming mortgage down, funnel are and point add have conditions little in don't that talk and sense you that a whole bit. doesn't the and

Scott Peyree

Scott is Peyree. This Thanks.

lending from consumers' the of they're businesses, on sensitive. of not of items rate in comments add Doug's as a to to the to quite consumer Just side quick start perspective, would a lot I say real some there. those

looking side. seeking did, are optimizing also then a honest, performance a very gave you're where basis. the out need business perspective, more the said or very up that we I'll over consumers credit share. we've our market focus a little profitable too personal We to had probably small but from of be I economic unit the very, I or We just are think business in far pendulum past both little right business, in let we're a optimization If money lot bit perspective, media and said, OpEx now the probably is from just a an cards. But year money. loans a and at loans that position good of These swing as marketing performance on

and strong in leaning area. we're small loans opportunity. purchase into ready are business, sequential seeing already And in our in sequential growth strong equity actively multiple of business We're we I growth sequentially. home areas seeing really in the auto are growth mean also refi our and

on consumer coming remain is off basis. though back we a have day-to-day the though are as of large of even consumers change through to rates elevated, it business they're growth lows, So the pivoting leveled, loans that a now even does coming And there searching they those for psychology quantity and mode. interest

about the refinance. talk Trent

Trent Ziegler

how can that would it you on the the Yes. be. Jed, -- question repeat so was Jed,

Douglas Lebda

definitely the credit, improved a perspective, from credit have little markets The bit. my

add but Trent be on pretty to to We can continue conversations. more, confident have we're handle able we'll that. that

load really a you else wouldn't debt be, would -- be don't handle. anything think and take on we -- financial. Why on sound feel taking it? on add We the couldn't that is we and -- wherever company we we

Trent Ziegler

Yes.

quite relates number. quarters. explore We've obviously, work X bunch a year the We've a a much those across continued fundamentals to balance been it for we constructive conversations last capital the to to manageable sort X, and Jed, I the at as that last are of sheet, are conversations improving. make As bit more a becoming of mean, stable more the lot structure, did having more looking of alternatives getting

the we of about that to So pretty in ability good maturity half feel this our first year. address

Operator

our Squali question And question. from Securities. Youssef next next Truist our for comes moment One of

Youssef Squali

So up question. of little just a kind high macro following level the a back maybe bit stepping at on

can I'm how you Scott are across guys [indiscernible] of you XXXX. baking a And landscape your for as X formulating -- little just how are guidance guess positioned the saw in the revenues a case rates of share. your talk As outlook, I then flat other on talked do back maybe really of segments. enter how it? little the you trying segments? what stays a you consumer you about bit the can entire what as the hit get is, you you to if X And were you lost talk I did about base could bit, side, across you just a high. maybe XXXX just to business across bit you are go kind How competitive And about

Douglas Lebda

Yes.

Youssef, understand it the that competition. did -- I assuming Okay. and base our for macro that with case get Is -- I for our talk about guide right?

or for the in guidance PL rate our -- or is like nothing a our any So baking conditions higher longer baking in rates. And cuts base at consumer lenders assumed not in that Fed things case our we're strong credit that. --

are today, managing we're doing baking on see it initiatives out as is but we from the know that we're here happening. not is -- everything that is you that in So business

On you gaining think and competitors. that competitors defined what shopping very, generation share that The and lost we results of news we Scott to competition set about in feel or we the both extent a are lending very well share [indiscernible] to absolutely insurance drill we space well in And insurance. good we is this compare in down. and -- to lead doing have all comparison that can doing now and

marketing very on back bids we Scott better year, about. simply to working put were when Scott, said Scott on economics broadly, is something very regain we I'll That don't our Scott, reduced our point can hit competition? and of into of in stuff on simply our talked and that lean that manage anything differently, you out that some finer manage now share due we why marketing advertising last by else a the unit And Google earlier, our as differently.

Scott Peyree

high-level I'll competitive Yes, start in just on insurance. the use landscape.

everyone of from space. growth QX in company a in believe in that's extremely both revenue that's well percentage I looking think growth VMD reported, on are basis we insurance the year-over-year and categories. at only in both double-digit those the we're I and positioned

wide and our pretty it's So across [indiscernible]. the

Our high in in business business VMD, the as had both revenue for very health a a year whole. year QX year last strong That's and an insurance all-time us.

from us for January very were Our our near high agents also us. for with quote triple levels. ever all-time local XXXX of leads they was our that's the agent revenue is quantity strong what are business agent revenue requests been buying highest search paid local from

are we very controlling high-quality a So intent, of massive high amount consumers.

our pie, there of very comes growth during and of well we've we job back. I are piece good done believe So of as the to a the downturn maintain piece that increasing positioned increased pie the

And it's And the everyone's rewarded going be XX happening I'll is business next good have step back rapidly. recovery There's and happen lots say insurance with recovery. that a to broad-based in be our to over the to clients. good of relationships going during and this months, that's very companies XX, going the

to think going to So that be but we're winner a winner of going everyone I is that, an be think recovery. outsized of I

what in well. maintain we call that maintain a extremely pretty perspective the space, space. biggest players feel in I even dominant from the -- network the with quickly, it's position a but severe mortgage downturn in I very mortgage we we much close right got though We've relationships on a would as have now, distribution broadest also Hitting client

We client and mortgage does. our have in equity much refi set distribution home competitive than more clients broader purchase

not that's probably also most I months X consumer more demand. the clients year. where the There's just X would of some struggled the remains we our of consistency categories, in have level we've there with side, a over seen area optimism over area other lot the because a that consumer an it's still say but X past the have where been of a On than I

make in media to in that now for going us to lean growth much lead we've level it's and easier So reached that opportunities. consistency, the of the opportunities it

the see we're to over that see think to I -- of share So think going gain market starting to some I you're back. next year going

Operator

question. next comes Ryan the And from moment of One next question KBW. for our Tomasello

Ryan Tomasello

you clarify, say put the in I in And that this earlier committed did your year? to Or the address did a hear that first to to avoiding that around finer remarks, you're of Just convert. point dilution equity-linked when company wrong? How just maturity? can Trent is optimistic addressing you half the

Trent Ziegler

I obviously our Good interesting at right, Obviously, when as confident they're alternatives. are Yes, to Yes, and stock debt sensitive exploring share, those and various service the mean, can the us look, Ryan. also not to question, but great we've alternatives was dilution, feel that's penny means fundamentals right. are dilution share, becoming to our we been don't more a addressing support a as just have $XX cash we that that the pretty make the we flow maturity. use --

doing been continue in one. we And thing this July best of try to want goes our intend this point and that's before that always stated to So find to path goal it to current then has we the so. to year, it address

Douglas Lebda

corporately this process, on that. am as feel we we Trent on focus -- can we And said, as and shareholders we add do thing [indiscernible] down personally only I The is, much various started we non-dilutively. dilution it as as good I'd

Ryan Tomasello

more Okay. follow-up on that maybe agents? how trying direct as Scott, to or QuoteWizard that versus marketing to competition. there's And channels you better relatively to spend there's just Great. space see click, carrier the other if any is view SEM, the among LendingTree takes the then, as business, direct recovery trying than shape, how understand sooner if in this recovery a are capture positioned insurance understand versus positioned Just areas to I'm

Scott Peyree

at given right, past focus years but think the mean, industry, consumers after laser the highest where we that the outsized in have over for our clients quality, honestly, the X first is a -- going when that's in I the is what any I are included, those Yes. very I I mean budget intent, is are. increasing go And look recovery. consumers job insurance highest the And to most think I some you marketplaces on profitable early us quality what's recovery with highest the done position think a of in good days various them.

have and and positioning recovery Now the more a competitive going as of to the on, margins lot And up to probably past to little the broadens, [indiscernible] the just are have landscape, the that's their all fully as as -- open year where the transition goes you carriers we've try down lot our I budgets to to your think to it's bit come growing easier to maintain maintain X positioning. a to of a positioning. over years. than But grow positioning done you

Douglas Lebda

loved we and like know, better maintaining carriers, the for And to I they add them The that them we back, have great as deliver I'd insurance speed what happy so so was businesses marketing some of want. to the Ryan, it to on agents. the but And relationships pencil be more competitors. they there than What still of getting was when policies the sounds the leading business, sharpening that then come I'm insurance really and And of to ready Scott spend that. you hopefully here. that [indiscernible] get about able client very are acquisition. with you're to direct And the our have to up recovery, number

are better are some calls, with Some with better Click.

very we've year. as Scott into that are channels, we got some want. the well-balanced intent have good thing we is about what to it's in relationships where side. that they'll I clients some and is lending our very [indiscernible] can Some and still profitable leading portfolio And a that great focus they And spending it homeowners. and help on be all our feel back of lower and of better are the spend, And this think thing the very, insurance beautiful clients for now with auto those we

Operator

our One comes moment from Stephens. for And our John next question next question. Campbell of

John Campbell

outlook XQ? like how is insurance broadly, But be as strength just going the going about to on Obviously, pin to difficult maybe thinking the and It in to then the coming stay obviously, that you I curve you December. activity out know to your it wanted see of exact is to guys looks guys to and the was curious share down. sequential lift of in XQ look. shape And I a I'm about well. a segment then see continuation the outlook. like snapback gains timing seems of how more are encouraging

business? some So maybe to guys you insurance you point in are the to puzzle if could think whether new peaks also year talk at pieces place the reach maybe in this

Douglas Lebda

I'm when about Trent, -- you about to you talking just about insurance? are you're everything? let the talking going Are curve, talking

John Campbell

Just within now. insurance for

Douglas Lebda

Okay.

Trent Ziegler

-- And a baking feel We in That of And this in. see Kind guide, become home Doug's really of do monitoring conservative from Yes, upside. things consumer We we broad-based. baked Scott which we're year not outlook said, mean, think to QX, time. I we're in we're ton around like terms think here, commentary where can we I what of like sign John, obviously, stance so strong could the a just assume -- the are of see and fairly has some progresses, in in that. as add obviously for headed. recovery real our we right? more commentary look, in been color the -- and what we

Scott Peyree

with budgets I'll clients whatever to want perspective, -- I went add in clients. after in of would from guaranteed the in QX our from as year. bake some John. there, we said, Trent we conservative think forecasting Yes, what say I be especially a We our last until happened

geos as broad-based our all going conversations very and the our clients across on. profitable with year the to goes expanding they as Now happy, are very board -- that said, are continue of

year happens, some continued macro it's goes insurance. of a lot the recovery broad-based after quarter profitability the I event in growth quarter on, a year major anecdotally, -- just across as would very the expect sequential after So There's board. unless

mean, We a March as of thought the -- it opening month was opened there up getting they before new in any are or were a that would carriers that the geos. of geos already end ago, year we be I few X

growth a there on I snowball my hill. is extremely year. from is think the effect -- I So the the happening, that's standpoint, continued And am optimistic I snowball rolling down throughout

John Campbell

just But This guys helpful. a That's near-term, maybe a question Doug Okay. spend, kind $XX million That as X-part $X.X it think very kind last the -- question. picture a make medium-term then of this as to years well in million. years bit brand that. here. was I of little question, closed for And in is on year than to closer a the the bigger at prior you X and that higher

ratchet about is level much have as And fully curious that new How then guys you is of what higher at kind brand over -- for thinking what's point. bigger So something time? expect that of this outlined to kind a is this your of about spend, you normal picture, year? Or as far this committed? lower

Douglas Lebda

together, really, the of instead that We we in great our then online. we proved our the benefits LendingTree the obviously TV profitably question. is a XXXX helped act with from started spend doing brand consumers year could way time. And TV, out it -- TV. through a that And really that So got at drive fact and online the AOL

your get viable. for spend We advertising unit is it's when works this in economics here. so have advertisers high assumption really of the from demand your only the to X economically And you us brand is TV way and actually that year spend your

but working So see elected search spend, like we spend actually on see too. we that, to just we're attribute TV

year. plan we this TV on So don't

TV, time makes on means at in that that do our expensive because on to If for customers you it forum prices channel see investing acquire us we any to the us see sense client most -- us TV, that. are you

can go volume I spending more love TV means big that because So be it any -- when we from can't on we online. we're grab

Operator

of JPMorgan. from question next Our comes Wedel Melissa

Melissa Wedel

apologize. just wanted clarify. I to I First,

in I year-over-year -- did growth you segment for Insurance Doug, the looking hear XQ? right, think I you're in double-digit

Douglas Lebda

Yes, both VMD. and revenue in

Melissa Wedel

margin, on kind you of talk the expect it. Got implications that kind segments. Okay. given progress and how what various the of Can to across are just throughout you about year the

Douglas Lebda

that's then hit it into -- So at go I'll we where this percentages. on margin, not focus and you you we look detail. VMM Scott, should dollars, VMM VMM in When

so turn we to -- as So customers. clients their bids, spend bids are up you around as get go in upping and our

still decrease to we're at doing And margin. so on are that do that back insurance, with you and to are it volume seeing in in almost year. add where we Scott, do we're see good, drive last that? you were pretty they some can in line But come want margins that

Scott Peyree

strong like the very but said, margin Media standpoint, VMD started in increasing margins that's recovery revenue historical get total our over come bit. down expansion, slightly QX, Yes. dollars you I a very in across said, insurance, mean, would Melissa, will growth high. from as a still happens I there. maybe down QX, as about little Doug exchanges and are very, the board. our more But focus will it's and -- That

right and revenue running our would us. fairly, -- lean margins will VMD good now. we -- for you traffic seeing dollars recovery, probably side, you're into a a and mortgage on start at clients additional you're staying make on the pretty that's we're profitable just I probably until And say for

margins You're and not a more broad-based those recovery whatnot. you squeeze until traffic and for of looking really to start refinance seeing

like a there's equity in said, in the that I and lot equity, current Now of believe, growth home home opportunity, near-term.

probably our increase do VMD dollars are -- going slimmer the to currently a look we're table to something very bit honestly, if by into consumer by some which leaving right in total certain running is see margins. can think running market we I strong margins share actively and that reinvest areas now. gain On dollars we and margins, very the I strong But think running on were side, VMD

Operator

One moment question. next for our

from National comes of Susquehanna Jamie Friedman question next Our Group.

James Friedman

ask loan repayments. to student wanted I about

around how, behavior? loan be October student loan the student wondering just affect helpful. Any was I partner color originations sentiment at consumer on towards of say, would lending So all, loans or resumption if did the the

Douglas Lebda

take? to want do Scott,

Scott Peyree

loan defaults was or to was came seeing. there started a or Jamie. rates was what to point. perspective that based answer discussion they're of months of lot from this through of going short however I our And is think lot about delinquency that, ago That the you is no there. a happen the X at That that started change broad-based significant clients, repayments from define semi want a in off nothing

more lending -- creep year -- levels. is a there's where lot say lot last I kind caution we generally in businesses of off off consumer of up level now as of most of think It's credit right are small that's that? right the of the broad I'd to just loans, where business, a of now, a businesses, cards, semi at defaults where to sit back they were starting pre-COVID going outside leveled personal these they've

really might restarting. are impact they cautious So saw I optimistic they starting And that people clients from but it's to the the they're -- really repayments there, the that think not feeling loan thought -- are happen don't off. level are student followers

James Friedman

for I done either way, was Okay. efficiency would the restructuring to And so, with now? operating those not, flow you if largely or And just in improvements how if XXXX. then potential follow-up, the through wondering, are

Douglas Lebda

turn dollar maybe now quite every is, from dollar on but every The good not that -- pretty we done yet, return else dollar was know done. came are restructuring God and largely is so -- plans something we have where in another are we close. what contingency cataclysm if with that economy, costs our forbid, we -- there's and going the and Yes, there

XX more -- like be if And we get off. so add have our an salespeople, now wouldn't faster, we in that If hire we staff, we XX clients the else and salespeople much it can that and back be or would AI go new investments ROI we hey, it. push that if can get output demand x will more we pay will investing will

from we some didn't come as And -- like making before economics. make do you do all sense of that of do they sudden, economics. expenses definitely manage to what start improve, in growth would economics and had and projects our now so that percent the they increase back? there's those sense can or would to would go And work [indiscernible] growth, of more we I as managed we call Well, I unit your a at we things of those be any them unit can as say, XX-plus-plus here

Operator

turn remarks. further it any Lebda closing questions back for to showing time. I to not this Doug at like I'm would

Douglas Lebda

to in would Like this call. everyone about I business. thank are everyone to continuing improve on know, our this like we call to passionate

team better Our driving offers. on routing partners through our of our matching and focused is smarter existing and of customers for both enhanced inquiries outcomes

forward we quarter. are in segment performance. eventually our you encouraged We all inflection financial pairing drive an that to look growth in significantly experiencing consumer by next to in And to the are thank insurance look our we and improved talking being forward and with to home you businesses for here, and

Operator

This and disconnect. may you for participating, you call. Thank concludes conference today's now

LendingTree (TREE) 27 Feb 242023 Q4 Earnings call transcript