LendingTree(TREE) - 2024 Q4 - Annual Report

User Growth - In 2024, LendingTree added 3.1 million new users, bringing cumulative active users to 31.3 million as of December 31, 2024[253]. Revenue Performance - Revenue attributed to registered Spring users who initiated transactions from the Spring platform was approximately $23.1 million, representing 3% of total revenue for the year ended December 31, 2024[253]. - Revenue increased by$ 227.7 million, or 34%, to $900.2 million in 2024 compared to 2023, driven primarily by a 120% increase in the Insurance segment[271]. - Total revenue increased by 34% to$ 900.2 million in 2024 compared to 2023, with segment profit rising by 7% to $309.6 million[307]. - Insurance segment revenue rose by$ 299.1 million, or 120%, to $548.7 million in 2024, attributed to a 63% increase in revenue per consumer and a 35% increase in volume[273]. - Consumer segment revenue decreased by$ 56.5 million, or 20%, to $222.5 million in 2024, mainly due to declines in credit cards and other credit products[274]. - Home segment revenue fell by$ 14.9 million, or 10%, to $128.9 million in 2024, primarily due to a 29% decrease in mortgage product revenue[277]. - Revenue from the home equity loan product increased by 3% to$ 87.5 million in 2024, with a 23% increase in the volume of consumers completing request forms[309]. - Revenue for the year ended December 31, 2024, was $900.2 million, representing a 33.9% increase from$ 672.5 million in 2023[392]. Cost and Expenses - Total costs and expenses increased by $142.5 million, or 20%, to$ 855.6 million in 2024, with selling and marketing expenses rising by $202.4 million, or 47%[271]. - Cost of revenue as a percentage of revenue decreased to 4% in 2024 from 6% in 2023, reflecting a decrease in compensation and benefits[282]. - General and administrative expenses decreased to 12% of revenue in 2024 from 18% in 2023, primarily due to reduced compensation and benefits[292]. - Selling and marketing expenses rose to$ 636.0 million in 2024, up 47% from $433.6 million in 2023[392]. Profitability and Loss - Operating income improved by$ 85.2 million, or 210%, resulting in an operating income of $44.6 million in 2024 compared to a loss of$ 40.6 million in 2023[271]. - Net loss decreased by $80.7 million, or 66%, to$ 41.7 million in 2024 from a loss of $122.4 million in 2023[271]. - The net loss for the year ended December 31, 2024, was$ 41.7 million, compared to a net loss of $122.4 million in 2023, indicating a reduction in losses[326]. - Net loss for the year ended December 31, 2024, was$ 41,704,000, a significant improvement from a loss of $122,404,000 in 2023 and$ 187,952,000 in 2022, indicating a reduction in losses by approximately 66% year-over-year[398]. Workforce and Restructuring - The company incurred approximately $5.3 million in severance charges due to a workforce reduction plan that eliminated about 13% of its workforce[260]. - The company closed the Ovation credit services business, resulting in a workforce reduction of approximately 197 employees, or 18%, and incurred$ 2.1 million in restructuring expenses[298]. - The Reduction Plan led to the elimination of approximately 162 employees, or 13%, with severance charges of approximately $5.3 million, including$ 4.3 million in cash expenditures[299]. Impairment and Valuation - The closure of the Ovation credit services business resulted in an asset impairment charge of $4.2 million in 2023[262]. - An interim quantitative goodwill impairment test performed on September 30, 2023, resulted in a goodwill impairment charge of$ 38.6 million for the Insurance reporting unit[359]. - The carrying value of the Insurance reporting unit exceeded its fair value, while the Home and Consumer reporting units showed no impairment[359]. - The company maintained a valuation allowance of $167.5 million against net deferred tax assets as of December 31, 2024[354]. - Impairment charges on equity securities amounted to$ 58.4 million in 2024 and $114.5 million in 2023[365]. - The carrying value of equity investments at December 31, 2024, is$ 1.7 million[365]. Cash Flow and Financing - Cash and cash equivalents as of December 31, 2024, were $106.6 million, down from$ 112.1 million as of December 31, 2023[328]. - Net cash provided by operating activities in 2024 was $62.3 million, compared to$ 67.6 million in 2023, showing a slight decrease[341]. - Total net cash used in financing activities in 2024 was $56.5 million, significantly lower than$ 242.0 million in 2023, indicating improved cash management[345]. - The company has $115.3 million outstanding on the 2025 Notes as of December 31, 2024, with plans to use cash on hand and available borrowings for repayment[332]. - The company entered into an Equity Distribution Agreement in July 2024 to sell up to$ 50.0 million of common stock, although no sales were made during 2024[333]. - Proceeds from term loans in 2024 amounted to $125,000,000, compared to no proceeds in 2023, indicating a new financing strategy[398]. Market and Economic Conditions - The average mortgage rate in 2024 was 6.7%, compared to 6.8% in 2023, and more than double the low rates seen in 2021[236]. - Total refinance origination dollars decreased to 15% of total mortgage origination dollars in 2023 from 30% in 2022, while increasing to 28% in 2024[247]. - Existing home sales decreased by 19% in 2023 compared to 2022, with a further decrease of 1% in 2024[250]. - Advertising budgets from carrier partners began to increase in the last months of 2023, indicating a potential recovery in the Insurance segment[235]. Tax and Regulatory - The effective tax rate for 2024 was (11.6)%, compared to 2.0% in 2023, primarily due to changes in the valuation allowance[305]. - The company incurred income tax expense of$ 139.4 million related to the valuation allowance during 2022[354]. Investment Performance - The company reported a loss on investments of $58,376,000 in 2024, down from$ 114,504,000 in 2023, reflecting improved investment performance[398]. - Interest expense of $11.5 million was incurred after drawing$ 125.0 million on a first lien term loan facility in March 2024[300]. - Interest paid increased to $38,203,000 in 2024 from$ 23,685,000 in 2023, suggesting higher borrowing costs[398]. Segment Information - The company has three reportable segments: Home, Consumer, and Insurance, which are regularly reviewed for performance assessment[420]. - The company discontinued its credit services product in Q2 2023, impacting revenue streams from upfront fees and subscription fees[407].