LendingTree 2025 Q1 Earnings Misses Targets as Net Income Declines 1318%

LendingTree (TREE) reported its fiscal 2025 Q1 earnings on May 01st, 2025. The company fell short of expectations, swinging to a net loss and missing anticipated earnings per share targets. Despite strong revenue growth across all segments, LendingTree's guidance was adjusted downwards for the year, reflecting challenges ahead. The company now anticipates fiscal 2025 revenue in the range of $955-$995 million, below previous estimates. Investors should be cautious, as the adjusted guidance signals potential hurdles in upcoming quarters.

Revenue
LendingTree reported a significant boost in total revenue, reaching $239.73 million in Q1 2025, marking a 42.9% year-over-year increase from $167.77 million in Q1 2024. The Home segment contributed $37 million, demonstrating healthy growth, while the Consumer segment added $56 million, showing modest improvement. The Insurance segment led the way with an impressive $146.70 million, highlighting robust demand despite regulatory challenges.

Earnings/Net Income
LendingTree transitioned from a profit of $0.08 per share in Q1 2024 to a loss of $0.92 per share in Q1 2025, marking a substantial negative change of 1250%. The net loss amounted to $-12.38 million, representing a steep deterioration of 1318% compared to the $1.02 million net income in the previous year. The EPS performance was notably unfavorable.

Price Action
The stock price of LendingTree climbed 4.08% during the latest trading day, increased 5.03% over the past week, and rose 7.66% month-to-date.

Post-Earnings Price Action Review
Following LendingTree's Q1 earnings report, the stock's short-term performance metrics indicate limited positive impact. The backtest results reveal a 3-Day win rate of 42.86% for revenue, a 33.33% win rate for net income, and a 23.81% win rate for EPS. Over a 10-Day period, the win rate for both revenue and net income remains at 33.33%, with EPS still at 23.81%. Notably, the 30-Day win rate drops to 23.81% across all metrics, with the maximum observed return capped at 1.20%. This suggests earnings report metrics have minimal effect on TREE's stock price in the short term. The maximum return day for all metrics is zero, indicating no significant price increase post-earnings.

CEO Commentary
Doug Lebda, Chairman and CEO, emphasized solid revenue growth across all LendingTree segments despite challenges like regulatory headwinds in insurance and one-time expenses. He noted the impact of the FCC's one-to-one consent rule on insurance growth but anticipates recovery. Lebda highlighted the success of small business and personal loan products, attributing improved unit economics to the concierge sales team. He remains optimistic about 2025, citing a resilient business model adaptable to market changes.

Guidance
LendingTree forecasts strong adjusted EBITDA growth of 15% at the midpoint for the year. The company expects continued revenue and BMD growth in the insurance segment, with specific improvements anticipated in the second half. In the home segment, strong demand for home equity loans is expected to sustain performance, while the consumer segment is projected to show seasonal improvement moving into Q2 and Q3.

Additional News
In recent developments, LendingTree has not announced any major mergers or acquisitions. However, the company has made strategic changes at the C-Level, appointing a new Chief Marketing Officer to enhance its brand presence and drive digital engagement. Additionally, LendingTree has announced a share buyback program, signaling confidence in its future performance despite recent earnings challenges. The buyback aims to optimize capital structure and provide value to shareholders. Investors should monitor these strategic moves as LendingTree navigates the evolving financial services landscape.