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LendingTree (TREE) Q3 Earnings call transcript Oct 31, 2024

AInvestFriday, Nov 1, 2024 5:04 am ET
2min read

LendingTree, the leading online marketplace for loan comparison, recently released its financial results for the third quarter of 2024, showcasing impressive growth and a promising outlook. The company generated $27 million of adjusted EBITDA, marking a 23% increase compared to the same period last year. This growth was largely driven by the standout performance of its Insurance and Consumer verticals.

Insurance Sector Shines with Record Results

LendingTree's Insurance segment continued to outperform, with segment revenue increasing by an impressive 210% year-over-year. This remarkable growth was underpinned by strong consumer demand for auto insurance quotes. The segment earned $41 million of VMD (Variable Marketing Dollars), setting a new record result. The company is optimistic about the future of this vertical, with opportunities for further margin improvement and a growing market size.

Consumer Business Gains Momentum

The consumer business, which accounts for a significant portion of LendingTree's revenue, also saw a 6% increase in revenue and a 4% increase in VMD sequentially. This marks the third consecutive quarter of sequential improvement, indicating a positive trend. The company's strategic initiatives, such as expanding its small business product and focusing on personal loans, have contributed to this growth. The small business product has shown consistent demand, making it the highest margin unit on LendingTree's network. The decision to lean into personal loans has also paid off, with both revenue and VMD growing sequentially in the third quarter.

Home Segment on the Path to Recovery

The Home segment, which has been operating at trough levels due to various macroeconomic factors, saw a 5% revenue growth from the prior year. Home equity now accounts for 2/3 of segment revenue, providing a solid foundation for steady growth. The company believes that home equity is well positioned to continue its growth trajectory.

Outlook and Future Growth Opportunities

Looking ahead, LendingTree's management team remains optimistic about the company's future prospects. With the insurance industry in a strong position and the consumer business showing signs of recovery, the company expects to produce strong results in the coming year. The company's diversified revenue streams and strategic initiatives in insurance and consumer products position it well for continued growth.

Investor Q&A Session Highlights

During the earnings call, key analysts and investors raised important questions about LendingTree's growth trajectory, market positioning, and future strategies. The company's management team provided valuable insights into its performance, market trends, and future plans. These interactions highlighted the confidence and optimism surrounding LendingTree's growth prospects, while also underscoring the challenges and opportunities facing the company in various sectors.

Conclusion

LendingTree's Q3 results demonstrate a company on the rise, with strong performance in its Insurance and Consumer verticals driving growth and setting the stage for a promising future. The company's strategic initiatives, market positioning, and operational agility position it well to capitalize on the opportunities and challenges ahead. As LendingTree continues to navigate the evolving market landscape, its focus on innovation, customer satisfaction, and financial discipline will be key to its success.

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