Core Viewpoint - LendingTree, Inc. has successfully closed a $475 million credit facility, which includes a $400 million five-year Term Loan B and a $75 million revolving credit facility, enhancing its financial structure and operational flexibility [1][2][3] Financing Details - The new financing replaces the existing Term Loan B due 2028 and the loan agreement with Apollo, providing significant benefits to the company's capital structure [1][2] - The facility is led by Bank of America and Truist Securities, offering a simplified and cost-efficient debt profile [2] - Key terms include interest rates of SOFR + 450 basis points for the term loan and SOFR + 350 basis points for the revolver, with a potential 25-basis point reduction upon achieving a B2 rating from Moody's [6] Strategic Implications - The refinancing is viewed as a strategic move to strengthen the balance sheet, allowing the company to pursue growth opportunities and enhance long-term shareholder value [3] - The new facility reduces restrictive covenants, including the removal of minimum cash and AEBITDA requirements, and restores the ability to repurchase shares and make strategic investments [6] - The proceeds will be used for refinancing existing debt and general corporate purposes, enhancing liquidity and operational flexibility [6]

Core Viewpoint - Tree.com (TREE) has experienced significant stock price appreciation, with a 67.5% increase over the past month and a 63.9% gain since the beginning of the year, outperforming both the Zacks Finance sector and the Zacks Financial - Mortgage & Related Services industry [1][2]. Financial Performance - Tree.com has consistently exceeded earnings expectations, reporting an EPS of $1.13 against a consensus estimate of $0.97 in its last earnings report on July 31, 2025 [2]. - For the current fiscal year, Tree.com is projected to achieve earnings of $4.37 per share on revenues of $1.03 billion, reflecting a 36.99% increase in EPS and a 14.93% increase in revenues [3]. - The following fiscal year is expected to see earnings of $4.7 per share on revenues of $1.1 billion, indicating year-over-year changes of 7.49% and 6.75%, respectively [3]. Valuation Metrics - Tree.com currently trades at 14.5 times the current fiscal year EPS estimates, which is below the peer industry average of 15.3 times [7]. - On a trailing cash flow basis, the stock trades at 19.7 times, compared to the peer group's average of 7.2 times, suggesting it is not positioned among the top value stocks [7]. Zacks Rank and Style Scores - Tree.com holds a Zacks Rank of 1 (Strong Buy), supported by favorable earnings estimate revisions from analysts [8]. - The stock has a Value Score of C, a Growth Score of B, and a Momentum Score of C, resulting in a combined VGM Score of B [6][9]. - Given the Zacks Rank and Style Scores, Tree.com appears to have potential for further price appreciation in the near term [9].

Core Viewpoint - Tree.com (TREE) is positioned as a strong investment opportunity due to its improving earnings outlook and analysts' increasing earnings estimates [1][2]. Earnings Estimates - Analysts are optimistic about Tree.com's earnings prospects, leading to higher estimates that are expected to positively impact the stock price [2]. - The current-quarter earnings estimate is $1.23 per share, reflecting a 53.8% increase from the previous year, with a 36.76% rise in consensus estimates over the last 30 days [5]. - For the full year, the earnings estimate is projected at $4.37 per share, indicating a 37.0% increase from the prior year, supported by three upward revisions against one downward revision [6]. Zacks Rank - Tree.com holds a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts on upward earnings estimate revisions, which historically correlate with stock performance [3][7]. - Stocks with a Zacks Rank 1 and 2 have shown significant outperformance compared to the S&P 500 [7]. Stock Performance - The stock has appreciated by 33% over the past four weeks due to favorable estimate revisions, suggesting potential for further upside [8].

Core Viewpoint - Tree.com (TREE) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors often adjust their valuations based on earnings estimates, leading to significant stock price movements when they buy or sell large amounts of shares [3]. Company Performance and Outlook - The upgrade for Tree.com reflects an improvement in the company's underlying business, suggesting that investors may push the stock price higher [4]. - Tree.com is expected to earn $4.37 per share for the fiscal year ending December 2025, with no year-over-year change, but the Zacks Consensus Estimate has increased by 28.6% over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [8][9].

Core Insights - U.S. stocks have experienced volatility due to tariff news and disappointing job growth, leading to a significant drop in the S&P 500 [1] - Despite the pullback, investor sentiment remains positive, with ongoing negotiations and expectations of lower interest rates supporting a potential recovery [2] Stock Recommendations - Recommended stocks based on relative price strength include Barrick Mining Corporation, LendingTree, Mercury General Corporation, Rigel Pharmaceuticals, and Levi Strauss & Co. [3] Relative Price Strength Strategy - The potential for considerable returns in stocks is primarily determined by earnings and valuation ratios, alongside their price performance relative to peers [4] - Stocks outperforming their industries or benchmarks should be included in investment portfolios for higher return potential [5] - Stocks that have outperformed the S&P 500 over 1 to 3 months and show solid fundamentals are ideal candidates for investment [6] Analyst Optimism - Positive estimate revisions for upcoming earnings are crucial, as upward revisions typically lead to price gains [7] Screening Parameters - Stocks must show positive relative price changes over 12 weeks, 4 weeks, and 1 week, alongside positive current-quarter estimate revisions [8] - Stocks like Barrick Mining, LendingTree, and Rigel Pharmaceuticals have outperformed the S&P 500 and show strong earnings revisions [8] Company Highlights - **Barrick Mining Corporation**: Expected EPS growth rate of 33.5%, with a 55.6% year-over-year growth estimate for 2025 [10][11] - **LendingTree**: 45.1% growth estimate for 2025, with a trailing four-quarter earnings surprise of approximately 70.8% [11][12] - **Mercury General Corporation**: 1,000% surge in earnings estimate over the past 60 days, with a trailing earnings surprise of about 166% [13][14] - **Rigel Pharmaceuticals**: 170.7% growth estimate for 2025, with an average earnings surprise of 1,840.5% [15][16] - **Levi Strauss & Co.**: 4% year-over-year growth estimate for fiscal 2025, with a 5.7% increase in earnings estimate over the past 60 days [17]

Core Insights - LendingTree reported a significant earnings beat for Q2 2025, with non-GAAP EPS of $1.13, surpassing the consensus estimate of $0.38 by $0.75, and GAAP revenue of $250.1 million, slightly above the expected $246.97 million [1][2] Financial Performance - Adjusted EPS (Non-GAAP) increased by 109% year-over-year to $1.13 from $0.54 in Q2 2024 [2] - GAAP revenue rose 19% year-over-year to $250.1 million from $210.1 million in Q2 2024 [2] - Adjusted EBITDA (Non-GAAP) grew by 35.3% to $31.8 million compared to $23.5 million in Q2 2024 [2] - Variable Marketing Margin (Non-GAAP) increased by 18% year-over-year to $83.6 million [2] - Net Income (GAAP) rose 14.1% to $8.9 million from $7.8 million in Q2 2024 [2] Business Model and Strategy - LendingTree operates an online marketplace connecting consumers with over 400 partners, including lenders and insurance carriers, generating revenue through fees for completed requests [3] - The company has focused on diversifying product offerings and strengthening partner relationships, particularly in insurance and consumer loans [4] - Investments in AI and automation are central to improving user experience and operational efficiency [4] Segment Performance - The Insurance segment's revenue grew 21% to $147.2 million, with profit increasing 10% to $40.0 million, although profit margin decreased to 27% from 30% due to competitive pressures [6] - The Consumer segment saw a 12% revenue increase to $62.5 million, with profit jumping 19% to $32.1 million and profit margin expanding to 51% [7] - The Home segment's revenue climbed 25% to $40.4 million, with profit soaring 41% to $13.1 million, driven by a 38% increase in home equity loan revenue [8][9] Future Guidance - For Q3 2025, revenue guidance is set at $273–$281 million, with variable marketing margin expected to reach $86–$89 million and adjusted EBITDA forecasted between $34–$36 million [12] - For FY2025, management projects revenue of $1.00–$1.05 billion, with improved profitability metrics anticipated [12] - The company expects continued growth in the insurance segment and plans to invest in partner diversification and technology [12]

Core Insights - LendingTree, Inc. (TREE) reported a second-quarter 2025 adjusted net income per share of $1.13, exceeding the Zacks Consensus Estimate of 97 cents and significantly up from 54 cents in the prior-year quarter [1][10] - The company's total revenues grew by 19% year over year to $250.1 million, matching the Zacks Consensus Estimate, while adjusted EBITDA increased by 35.3% to $31.8 million [3][10] - Despite the positive revenue growth, total costs rose by 19.2% to $10 million, which impacted overall performance [3] Financial Performance - The GAAP net income for TREE was reported at $8.9 million, an increase from $7.8 million in the same quarter last year [2] - Cash and cash equivalents as of June 30, 2025, were $149.1 million, up from $126.4 million as of March 31, 2025, while long-term debt decreased slightly to $385.1 million [4] Future Outlook - For Q3 2025, total revenues are projected to be between $273 million and $281 million, with adjusted EBITDA expected to be in the range of $34-$36 million [6] - The 2025 revenue outlook has been updated to between $1 billion and $1.05 billion, with adjusted EBITDA projected at $119-$126 million [7] Strategic Initiatives - The company is focusing on inorganic growth to strengthen its online lending platform, with efforts to diversify non-mortgage product offerings expected to support future revenue growth [8]

Company Performance - Tree.com reported quarterly earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $0.97 per share, and up from $0.54 per share a year ago, representing an earnings surprise of +16.49% [1] - The company posted revenues of $250.1 million for the quarter ended June 2025, slightly missing the Zacks Consensus Estimate by 0.02%, but up from $210.1 million year-over-year [2] - Over the last four quarters, Tree.com has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance - Tree.com shares have increased approximately 20.1% since the beginning of the year, outperforming the S&P 500's gain of 8.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.10 on revenues of $275.26 million, and for the current fiscal year, it is $4.13 on revenues of $1.02 billion [7] Industry Outlook - The Financial - Mortgage & Related Services industry, to which Tree.com belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Tree.com may be influenced by the overall outlook for the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited statements show increased assets, liabilities, and quarterly revenue, but a net loss for the six-month period [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities grew, driven by higher cash, receivables, and long-term debt Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $149,131 | $106,594 | | Accounts receivable, net | $126,187 | $97,790 | | Total current assets | $319,016 | $238,462 | | Goodwill | $381,539 | $381,539 | | Total assets | $835,765 | $767,674 | | **Liabilities & Equity** | | | | Total current liabilities | $260,592 | $240,476 | | Long-term debt | $385,110 | $344,124 | | Total liabilities | $717,653 | $658,853 | | Total shareholders' equity | $118,112 | $108,821 | [Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Quarterly net income rose, but a significant litigation expense drove a net loss for the six-month period despite revenue growth Quarterly Performance (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $250,116 | $210,140 | +19.0% | | Operating Income | $20,924 | $9,587 | +118.2% | | Net Income | $8,862 | $7,752 | +14.3% | | Diluted EPS | $0.65 | $0.58 | +12.1% | Year-to-Date Performance (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $489,844 | $377,908 | +29.6% | | Operating Income | $13,815 | $16,766 | -17.6% | | Net (Loss) Income | $(3,513) | $8,768 | N/A | | Diluted EPS | $(0.26) | $0.66 | N/A | - A significant litigation settlement expense of **$15.2 million** was recorded in the first six months of 2025, which was the primary driver of the net loss for the period[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow improved significantly, while financing activities were driven by proceeds from a new term loan Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $27,743 | $765 | | Net cash used in investing activities | $(6,158) | $(5,474) | | Net cash provided by (used in) financing activities | $20,952 | $(40,578) | | **Net increase (decrease) in cash** | **$42,537** | **$(45,287)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail segment revenue, debt structure, and a $19.0 million litigation settlement accrual Revenue by Segment (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Home | $77,437 | $62,609 | +23.7% | | Consumer | $118,552 | $107,352 | +10.4% | | Insurance | $293,809 | $207,943 | +41.3% | | **Total Revenue** | **$489,844** | **$377,908** | **+29.6%** | - The company repaid the remaining **$95.3 million** of its 0.50% Convertible Senior Notes due 2025 in cash upon maturity on July 15, 2025[83](index=83&type=chunk)[119](index=119&type=chunk) - An estimated liability of **$19.0 million** was accrued for the Mantha v. QuoteWizard.com, LLC class action lawsuit, with a settlement hearing scheduled for September 29, 2025[110](index=110&type=chunk) Segment Profit (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Home | $26,202 | $18,899 | +38.6% | | Consumer | $59,207 | $54,352 | +8.9% | | Insurance | $78,706 | $69,814 | +12.7% | | **Total Segment Profit** | **$164,091** | **$143,010** | **+14.7%** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong revenue growth across all segments, offset by a litigation expense, and improved liquidity [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Revenue grew across all segments, but a litigation contingency expense negatively impacted overall profitability - Insurance segment revenue grew **21%** in Q2 2025, driven by a 19% increase in volume and a 2% increase in revenue per consumer[148](index=148&type=chunk) - Home segment revenue increased **26%** in Q2 2025, primarily due to a 38% increase in revenue from home equity loan products[149](index=149&type=chunk)[150](index=150&type=chunk) - Consumer segment revenue rose **12%** in Q2 2025, led by a 14% increase in personal loans revenue and a 61% increase in small business loans revenue[152](index=152&type=chunk)[153](index=153&type=chunk)[155](index=155&type=chunk) - Selling and marketing expense increased by **19%** in Q2 2025 to $176.8 million, in line with revenue growth, as the company adjusted advertising spend to meet network partner demand[146](index=146&type=chunk)[160](index=160&type=chunk)[163](index=163&type=chunk) [Segment Profit](index=31&type=section&id=Segment%20Profit) Total segment profit increased, led by strong growth in the Home and Consumer segments Segment Profit and Margin (Three Months Ended June 30) | Segment | Segment Profit 2025 (M) | Segment Profit 2024 (M) | YoY Change | Segment Margin 2025 | Segment Margin 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Home | $13.1 | $9.3 | +41% | 32% | 29% | | Consumer | $32.1 | $26.9 | +19% | 51% | 48% | | Insurance | $40.0 | $36.4 | +10% | 27% | 30% | | **Total** | **$85.1** | **$72.5** | **+17%** | **34%** | **34%** | [Non-GAAP Measures (Adjusted EBITDA & Variable Marketing Margin)](index=32&type=section&id=Non-GAAP%20Measures) Adjusted EBITDA and Variable Marketing Margin both showed significant year-over-year improvement for the second quarter Adjusted EBITDA Reconciliation Summary (in thousands) | Period | Net Income (Loss) | Adjusted EBITDA | | :--- | :--- | :--- | | **Q2 2025** | $8,862 | $31,793 | | **Q2 2024** | $7,752 | $23,527 | | **YTD 2025** | $(3,513) | $56,419 | | **YTD 2024** | $8,768 | $45,078 | [Financial Condition, Liquidity and Capital Resources](index=35&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company's cash position strengthened, and it successfully repaid its 2025 convertible notes post-quarter - Cash and cash equivalents increased to **$149.1 million** as of June 30, 2025, from $106.6 million at December 31, 2024[200](index=200&type=chunk) - In March 2025, the company drew the remaining **$50.0 million** available under its 2024 Term Loan facility[201](index=201&type=chunk) - The outstanding **$95.3 million** principal of the 2025 Convertible Notes was fully repaid in cash on July 15, 2025[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity, affecting both consumer demand and variable-rate debt costs - A hypothetical **100-basis point** increase in interest rates would result in a $2.4 million annual effect on interest paid for the Credit Facility and a $1.6 million annual effect for the 2024 Term Loan[217](index=217&type=chunk) - Changes in mortgage interest rates directly impact the company's Home segment by influencing consumer demand for refinancing and purchase loans, which affects lead volume and pricing[218](index=218&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures are **effective** as of the end of the reporting period, June 30, 2025[220](index=220&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[221](index=221&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with details available in the financial statement notes - Information regarding legal proceedings is detailed in **Note 13—Contingencies** of the financial statements[223](index=223&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's previously disclosed risk factors were reported for the period - The company reports **no material changes** to the risk factors disclosed in its 2024 Annual Report[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during the quarter, with $96.7 million remaining under the authorized program - **No shares were repurchased** under the stock repurchase program during the quarter ended June 30, 2025[226](index=226&type=chunk) - As of July 31, 2025, approximately **$96.7 million remains authorized** for share repurchases[226](index=226&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the quarter - No directors or executive officers adopted or terminated a **Rule 10b5-1 trading arrangement** during the fiscal quarter[231](index=231&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including required CEO and CFO certifications

Financial Data and Key Metrics Changes - Revenue for Q2 reached $250 million, representing a 19% year-over-year growth [7] - Adjusted EBITDA increased to $31.8 million, up 35% from the previous year [7] - Profitability has improved for the fifth consecutive period, indicating strong operational performance [6] Business Segment Data and Key Metrics Changes - Consumer segment revenue grew by 12%, with segment profit increasing by 19% [8] - Small business loan revenue surged by 61%, while personal loan revenue rose by 14% [8] - Home segment revenue climbed 25%, driven by a 38% increase in home equity revenue [9] - Insurance segment revenue increased by 21% year-over-year, reflecting improved quality and conversion rates [10] Market Data and Key Metrics Changes - The company is focusing on adding more small lenders to enhance consumer coverage, which is starting to yield positive results [9] - The insurance industry is experiencing a favorable environment, with carriers eager to drive more traffic [18] Company Strategy and Development Direction - The company is committed to being an AI-first organization, with all employees utilizing AI tools to enhance productivity [10][11] - Strategic investments in data and technology are expected to improve operational efficiency and customer guidance [11][12] - The company aims to leverage AI to democratize financial products, making consumers more active shoppers [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities presented by AI, viewing it as a significant growth driver rather than a risk [22] - The company anticipates continued strong performance in the second half of the year, supported by strategic investments and operational excellence [58] Other Important Information - The company has resolved previous technical issues that affected traffic and monetization, leading to high revenue levels exiting Q2 [17] - The company does not rely on long-term contracts, allowing for flexibility in customer acquisition [43] Q&A Session Summary Question: Update on friction with carrier partners - Management clarified that there was a period of adjustment but no significant friction, and revenue levels are high with carriers eager to drive more traffic [15][18] Question: Impact of generative AI on customer acquisition - Management views generative AI as a major opportunity, with increased traffic from AI platforms and a focus on optimizing content for AI searches [19][22] Question: Strength in personal loans and potential interest rate cuts - The strength in personal loans is attributed to improved execution and lender optimism, with potential interest rate cuts expected to further accelerate growth [30][34] Question: Ability to reduce expenses with AI - Management is excited about AI's potential to enhance productivity and reduce expenses, aiming to automate lower-skill tasks and focus on higher-value work [35][40] Question: Impact of competitor losing a contract - Management confirmed that the situation does not affect them, as their business model does not rely on long-term contracts [42][43] Question: Guidance and macro assumptions - Management is not assuming any changes in interest rates in their guidance, expecting continued strength in home equity and a seasonal decline in Q4 [48][50]