LendingTree Inc.
05/01/2026 | Press release | Distributed by Public on 05/01/2026 14:23
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Information
This report contains "forward-looking statements" within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements related to our anticipated financial performance, business prospects and strategy; anticipated trends and prospects in the various industries in which our businesses operate; new products, services and related strategies; and other similar matters. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. The use of words such as "anticipates," "estimates," "expects," "projects," "intends," "plans" and "believes," among others, generally identifies forward-looking statements.
Actual results could differ materially from those contained in the forward-looking statements. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include those matters discussed or referenced in Part II, Item 1A. Risk Factors included elsewhere in this Quarterly Report on Form 10-Q and Part I, Item 1A. Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report").
Other unknown or unpredictable factors that could also adversely affect our business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this Quarterly Report on Form 10-Q may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of LendingTree, Inc.'s management as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations, except as required by law.
Company Overview
LendingTree, Inc. is the parent of LT Intermediate Company, LLC, which holds all of the outstanding ownership interests of LendingTree, LLC, and LendingTree, LLC owns several companies.
We operate what we believe to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. Our online consumer platform provides consumers with access to product offerings from our Network Partners, including mortgage loans, home equity loans and lines of credit, auto loans, credit cards, deposit accounts, personal loans, small business loans, insurance quotes and other related offerings. In addition, we offer tools and resources, including free credit scores, that facilitate comparison shopping for loans, deposit products, insurance, and other offerings. We seek to match consumers with multiple providers, who can provide them competing quotes for the product(s) they are seeking. We also serve as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries we generate with these Network Partners.
We are focused on developing new product offerings and enhancements to improve the experience of consumers and Network Partners as they interact with us. By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of revenue. We intend to capitalize on our expertise in performance marketing, product development and technology by leveraging the widespread recognition of the LendingTree brand.
We believe the consumer and insurance industries are in the middle stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established. We believe that, like retail and travel, as consumers continue to move towards online shopping and transactions for financial services, suppliers will increasingly shift their product offerings and advertising budgets toward the online channel. We believe the strength of our brands and of our Network Partners place us in a strong position to continue to benefit from this market shift.
Economic Conditions
We continue to monitor the current global economic environment, specifically including inflationary pressures and interest rates, and any resulting impacts on our financial position and results of operations. Refer to Part I, Item 1A. "Risk Factors" of our 2025 Annual Report for additional information.
During the first quarter of 2026, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending partners. In our Home segment, mortgage rates have decreased slightly in the first quarter of 2026, with the quarterly average mortgage rate in the first quarter of 2026 of 6.1% compared to 6.8% in the first quarter of 2025, but remain significantly increased compared to the low rates seen in 2021. A shortage of in-the-money refinance borrowers persists given the current higher level of mortgage rates, and historically low existing home sales are suppressing consumer demand for purchase loans. Our Consumer segment has benefited from the recent Federal Reserve rate decreases, but recent geopolitical events and higher consumer tax refunds appear to have pressured consumer demand for new borrowing. In our Insurance segment, carriers are broadly experiencing strong automotive underwriting results following multiple quarters of premium increases and stable loss cost trends. We are optimistic about maintaining the strong performance in the Insurance segment in 2026.
Segment Reporting
We have three reportable segments: Home, Consumer, and Insurance.
Recent Mortgage Interest Rate Trends
Interest rate and market risks are substantial in the mortgage lead generation business. Short-term fluctuations in mortgage interest rates primarily affect consumer demand for mortgage refinancings, while long-term fluctuations in mortgage interest rates, coupled with the U.S. real estate market, affect consumer demand for new mortgages. Consumer demand, in turn, affects lender demand for mortgage leads from third-party sources, as well as our own ability to attract online consumers to our website.
We dynamically adjust selling and marketing expenditures in all interest rate environments to optimize our results against these variables.
According to Freddie Mac, the monthly average 30-year mortgage interest rates remained consistent at 6.2% in March 2026 and in December 2025. On a quarterly basis, 30-year mortgage interest rates decreased to an average of 6.1% in the first quarter of 2026 from 6.2% in the fourth quarter of 2025. The quarterly average decreased to 6.1% in the first quarter of 2026 compared to 6.8% in the first quarter of 2025.
Typically, as mortgage interest rates rise, there are fewer consumers in the marketplace seeking refinancings and, accordingly, the mix of mortgage origination dollars will move toward purchase mortgages. According to Mortgage Bankers Association ("MBA") data, total refinance origination dollars decreased to 40% of total mortgage origination dollars in the first quarter of 2026 compared to 42% in the fourth quarter of 2025 and increased from 29% in the first quarter of 2025. In the first quarter of 2026, total refinance origination dollars decreased 11% from the fourth quarter of 2025 and increased 96% from the first quarter of 2025. Industry-wide mortgage origination dollars in the first quarter of 2026 decreased 6% from the fourth quarter of 2025, but increased 43% from first quarter of 2025.
According to MBA projections, the mix of mortgage origination dollars is expected to continue to be weighted towards purchase mortgages with the refinance share representing approximately 35% for 2026 compared to 34% in 2025.
The U.S. Real Estate Market
The health of the U.S. real estate market and interest rate levels are the primary drivers of consumer demand for new mortgages. Consumer demand, in turn, affects lender demand for purchase mortgage leads from third-party sources. Typically, a strong real estate market will lead to reduced lender demand for leads, as there are more consumers in the marketplace seeking financing and, accordingly, lenders receive more organic lead volume. Conversely, a weaker real estate market will typically lead to an increase in lender demand, as there are fewer consumers in the marketplace seeking mortgages.
According to Fannie Mae data, existing home sales decreased 3% in the first quarter of 2026 compared to the fourth quarter of 2025, and decreased 1% compared to the first quarter of 2025. Fannie Mae predicts an overall increase in existing-home sales of approximately 1.2% in 2026 compared to 2025.
Results of Operations for the Three Months ended March 31, 2026 and 2025
Our discussion within Revenue provides the details of consolidated revenue by segment and significant products. In this section, we describe overall changes in revenue in our segments and significant products within each segment and increases or decreases in revenue from the prior period. We also provide insight into how changes in price and volume in each significant product impacted product revenue.
Our Segment Profit is a discussion of profitability within each segment of the business. It is impacted by segment revenues as well as segment cost of revenue and marketing expenses. In Segment Profit, we provide a discussion of the business within each segment, addressing both Company and market impacts on the profitability of each segment in addition to a discussion of segment margin.
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 |
$ Change |
% Change |
|||||||||||
| (Dollars in thousands) | ||||||||||||||
| Home | $ | 39,068 | $ | 37,019 | $ | 2,049 | 6 | % | ||||||
| Consumer | 66,333 | 56,033 | 10,300 | 18 | % | |||||||||
| Insurance | 221,859 | 146,652 | 75,207 | 51 | % | |||||||||
| Other | 7 | 24 | (17) | (71) | % | |||||||||
| Revenue | 327,267 | 239,728 | 87,539 | 37 | % | |||||||||
| Costs and expenses: | ||||||||||||||
|
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
11,696 | 9,908 | 1,788 | 18 | % | |||||||||
| Selling and marketing expense | 238,568 | 172,751 | 65,817 | 38 | % | |||||||||
| General and administrative expense | 27,990 | 30,660 | (2,670) | (9) | % | |||||||||
| Product development | 11,467 | 11,904 | (437) | (4) | % | |||||||||
| Depreciation | 4,185 | 4,297 | (112) | (3) | % | |||||||||
| Amortization of intangibles | 1,288 | 1,307 | (19) | (1) | % | |||||||||
| Restructuring and severance | 939 | 798 | 141 | 18 | % | |||||||||
| Litigation settlements and contingencies | 20 | 15,212 | (15,192) | (100) | % | |||||||||
| Total costs and expenses | 296,153 | 246,837 | 49,316 | 20 | % | |||||||||
| Operating income (loss) | 31,114 | (7,109) | 38,223 | 538 | % | |||||||||
| Other income (expense), net: | ||||||||||||||
| Interest expense, net | (8,566) | (9,084) | (518) | (6) | % | |||||||||
| Other income | 369 | 1,388 | (1,019) | (73) | % | |||||||||
| Income (loss) before income taxes | 22,917 | (14,805) | 37,722 | 255 | % | |||||||||
| Income tax (expense) benefit | (5,651) | 2,430 | 8,081 | 333 | % | |||||||||
| Net income (loss) and comprehensive income (loss) | $ | 17,266 | $ | (12,375) | $ | 29,641 | 240 | % | ||||||
Revenue
Revenue increased in the first quarter of 2026 compared to the first quarter of 2025 due to increases in our Insurance, Consumer and Home segments.
Revenue from our Insurance segment increased $75.2 million, or 51%, to $221.9 million in the first quarter of 2026 from $146.7 million in the first quarter of 2025. The increase in revenue was due to a 28% increase in volume, representing $48.9 million of the increase and an 18% increase in revenue earned per consumer, representing $26.3 million of the increase We measure volume for insurance products as the number of consumer request forms and in certain cases of re-engagement with a consumer, the number of subsequent consumer engagements through our platform.
Our Consumer segment includes the following products: credit cards, personal loans, small business loans, auto loans, deposit accounts, and other credit products. Many of our Consumer segment products are not individually significant to revenue. Revenue from our Consumer segment increased $10.3 million, or 18%, in the first quarter of 2026 from the first quarter of 2025 primarily due to increases in our small business loans.
For the periods presented, no products in our Consumer segment represented more than 10% of revenue; however, certain other Consumer products experienced notable changes. Revenue from small business increased $9.7 million, or 49%, in the first quarter of 2026 compared to the first quarter of 2025 due to increases in revenue earned per consumer and in the number of consumers completing request forms.
Our Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and lines of credit. Revenue from our Home segment increased $2.0 million, or 6%, in the first quarter of 2026 from the first quarter of 2025 primarily due to an increase in revenue from our home equity loans product, partially offset by a decrease in revenue from our mortgage products.
Cost of revenue
Cost of revenue consists primarily of costs associated with compensation and other employee-related costs (including stock-based compensation) relating to internally-operated customer call centers, third-party customer call center fees, credit scoring fees, credit card fees, website network hosting, and server fees.
Cost of revenue increased in the first quarter of 2026 from the first quarter of 2025 by $1.8 million, primarily due to an increase in compensation and benefits.
Cost of revenue as a percentage of revenue was 4% in the first quarter of 2026 which is consistent with the first quarter of 2025.
Selling and marketing expense
Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-related costs (including stock-based compensation) for personnel engaged in sales or marketing functions. Advertising and promotional expenditures primarily include online marketing, as well as television, print, and radio spending. Advertising production costs are expensed in the period the related ad is first run.
Selling and marketing expense increased in the first quarter of 2026 compared to the first quarter 2025 by $65.8 million primarily due to the changes in advertising and promotional expense discussed below.
Advertising and promotional expense is the largest component of selling and marketing expense, and is comprised of the following:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 |
$ Change |
% Change |
|||||||||||
| (Dollars in thousands) | ||||||||||||||
| Online | $ | 226,883 | $ | 161,075 | $ | 65,808 | 41 | % | ||||||
| Other | 837 | 926 | (89) | (10) | % | |||||||||
| Total advertising expense | $ | 227,720 | $ | 162,001 | $ | 65,719 | 41 | % | ||||||
In the periods presented, advertising and promotional expenses are equivalent to the non-GAAP measure variable marketing expense. See Variable Marketing Expense and Variable Marketing Margin below for additional information.
Revenue is primarily driven by Network Partner demand for our products, which is matched to corresponding consumer requests. We adjust our selling and marketing expenditures dynamically in relation to anticipated revenue opportunities in order to ensure sufficient consumer inquiries to profitably meet such demand. An increase in a product's revenue is generally met by a corresponding increase in marketing spend, and conversely a decrease in a product's revenue is generally met by a corresponding decrease in marketing spend. This relationship exists for our Home, Consumer, and Insurance segments.
We adjusted our advertising expenditures in the first quarter of 2026 compared to the first quarter of 2025 in response to changes in Network Partner demand on our marketplace. We will continue to adjust selling and marketing expenditures dynamically in response to anticipated revenue opportunities.
General and administrative expense
General and administrative expense consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in finance, legal, tax, corporate information technology, human resources and executive management functions, as well as facilities and infrastructure costs and fees for professional services.
General and administrative expense decreased in the first quarter of 2026 compared to the first quarter of 2025, primarily due to a decrease in compensation and benefits of $3.4 million.
Non-cash compensation expense, included in total compensation and benefits noted above, within general and administrative expense decreased in the first quarter of 2026 compared to the first quarter of 2025 primarily due to $6.1 million of non-compensation expense in the first quarter of 2025 on equity awards associated with our previous Founder and Chief Executive Officer. For additional information, see Note-8-Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report. Non-cash compensation expense is excluded from Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("Adjusted EBITDA"), as discussed below.
General and administrative expense as a percentage of revenue in the first quarter of 2026 was 9% compared to 13% for the first quarter of 2025.
Litigation Settlements and Contingencies
In the first quarter of 2025, we incurred $15.2 million of expenses for litigation contingencies due to the Mantha litigation. See Note 11-Contingencies in the notes to the consolidated financial statements for additional information on litigation matters.
Interest expense, net
In the first quarter of 2025, we repurchased approximately $20.0 million in principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 (the "2025 Notes") for $19.7 million plus accrued and unpaid interest. As a result of the repurchase, we recognized a gain on the extinguishment of $0.3 million, which is included in interest expense, net in the consolidated statement of operations and comprehensive income. See Note 10-Debt for additional information.
Income tax (expense) benefit
For the first quarter of 2026, the effective tax rate varied from the U.S. federal statutory rate of 21% primarily due to the effect of state income taxes.
For the first quarter of 2025, the effective tax rate differed from the U.S. federal statutory rate of 21% primarily due to changes in the valuation allowance, net of the current period change in tax-effected net indefinite-lived intangibles.
Certain out-of-the-money stock options may expire unexercised, and as a result we could be required to reverse the related deferred tax asset for share-based compensation, which would increase income tax expense and the effective tax rate in a future period in 2026.
Segment Profit
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 |
$ Change |
% Change |
|||||||||||
| (Dollars in thousands) | ||||||||||||||
| Home | ||||||||||||||
| Revenue | $ | 39,068 | $ | 37,019 | $ | 2,049 | 6 | % | ||||||
|
Segment marketing expense (1)
|
29,106 | 23,873 | 5,233 | 22 | % | |||||||||
| Segment profit | 9,962 | 13,146 | (3,184) | (24) | % | |||||||||
| Segment margin | 25% | 36% | ||||||||||||
| Consumer | ||||||||||||||
| Revenue | 66,333 | 56,033 | 10,300 | 18 | % | |||||||||
|
Segment marketing expense (1)
|
33,400 | 28,896 | 4,504 | 16 | % | |||||||||
| Segment profit | 32,933 | 27,137 | 5,796 | 21 | % | |||||||||
| Segment margin | 50% | 48% | ||||||||||||
| Insurance | ||||||||||||||
| Revenue | 221,859 | 146,652 | 75,207 | 51 | % | |||||||||
|
Segment marketing expense (1)
|
163,927 | 107,942 | 55,985 | 52 | % | |||||||||
| Segment profit | 57,932 | 38,710 | 19,222 | 50 | % | |||||||||
| Segment margin | 26% | 26% | ||||||||||||
| Other | ||||||||||||||
| Revenue | 7 | 24 | (17) | (71) | % | |||||||||
|
Segment marketing expense (1)
|
77 | 36 | 41 | 114 | % | |||||||||
| Segment profit | (70) | (12) | (58) | (483) | % | |||||||||
| Total | ||||||||||||||
| Revenue | 327,267 | 239,728 | 87,539 | 37 | % | |||||||||
|
Segment marketing expense (1)
|
226,510 | 160,747 | 65,763 | 41 | % | |||||||||
| Segment profit | $ | 100,757 | $ | 78,981 | $ | 21,776 | 28 | % | ||||||
| Segment margin | 31% | 33% | ||||||||||||
|
(1)Segment marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses, that are directly attributable to the segments' products. This measure excludes overhead, fixed costs and personnel-related costs.
|
||||||||||||||
Segment profit is our primary segment operating metric. Segment profit is calculated as segment revenue less segment selling and marketing expenses attributed to variable costs paid for advertising, direct marketing and related expenses that are directly attributable to the segments' products. Segment margin is segment profit divided by segment revenue. See Note 13-Segment Information in the notes to the consolidated financial statements for additional information on segments and a reconciliation of segment profit to pre-tax income.
Home
Revenue in the Home segment increased 6% to $39.1 million in the first quarter of 2026 and segment profit decreased 24% to $10.0 million in the first quarter of 2026 compared to the first quarter of 2025. Segment margin decreased to 25% in the first quarter of 2026 compared to 36% in the first quarter of 2025 primarily due to an increase in online marketing costs as we experienced an increase in competition from certain direct-to-consumer lenders for mortgage products. Additionally, there was a strategic investment decision to drive higher quality traffic within the home equity product, increasing marketing costs.
Our refinance product within our mortgage business matches consumers in the market looking to refinance their existing mortgages with our network lenders. Our purchase product within our mortgage business matches consumers in the market looking to buy a new home with our network lenders. Our mortgage business is directly impacted by the mortgage market in which we participate and continues to see headwinds from a lack of in-the-money refinance borrowers given the current higher
level of mortgage rates, and subdued home sales have pressured the volume of consumers searching for purchase loans. We expect this environment to continue in 2026.
Consumer
Revenue in our Consumer segment increased 18% to $66.3 million in the first quarter of 2026 from the first quarter of 2025, and segment profit increased 21% to $32.9 million in the first quarter of 2026 from the first quarter of 2025. Segment margin increased slightly to 50% in the first quarter of 2026 compared to 48% in the first quarter of 2025.
Small business revenue increased 49% in the first quarter of 2026 from the first quarter of 2025. This increase in revenue was driven by additional investment in our concierge sales team, which provides a high-touch service option to help business owners find the right financing option, while increasing the speed of application submission, approval and funding.
See the section titled "Revenue" above for additional discussion of product revenues within the Consumer segment.
Insurance
Insurance revenue of $221.9 million in the first quarter of 2026 increased 51% from first quarter of 2025, while segment profit of $57.9 million in the first quarter of 2026 increased 50% from the first quarter of 2025. Insurance carriers continue to enjoy very strong automotive underwriting results and our leading market position with the largest carriers creates scale benefits. Growing marketing budgets from mid-sized carriers that are competing for market share provides market breadth for consumers that are shopping for lower policy rates.
We expect price decreases in auto insurance rates across select states in 2026 will provide an additional catalyst for consumer shopping and market share competition amongst carriers, which is expected to benefit our insurance segment results.
Variable Marketing Expense and Variable Marketing Margin
We report variable marketing expense and variable marketing margin as supplemental measures to accounting principles generally accepted in the United States of America ("GAAP"). These related measures are the primary metrics by which we measure the effectiveness of our marketing efforts. Variable marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing, and related expenses, and excludes overhead, fixed costs, and personnel-related expenses. Variable marketing margin is a measure of the efficiency of our operating model, measuring revenue after subtracting variable marketing expense. Our operating model is highly sensitive to the amount and efficiency of variable marketing expenditures, and our proprietary systems are able to make rapidly changing decisions concerning the deployment of variable marketing expenditures (primarily but not exclusively online and mobile advertising placement) based on proprietary and sophisticated analytics. We believe that investors should have access to the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP results. We provide and encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures discussed below.
Variable marketing expense is defined as the expense attributable to variable costs paid for advertising, direct marketing and related expenses, and excluding overhead, fixed costs and personnel-related expenses. The majority of these variable advertising costs are expressly intended to drive traffic to our websites and these variable advertising costs are included in selling and marketing expense on our consolidated statements of operations and comprehensive income. Variable marketing margin is defined as revenue less variable marketing expense.
The following shows the calculation of variable marketing margin:
|
Three Months Ended March 31, |
|||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Revenue | $ | 327,267 | $ | 239,728 | |||||||
| Variable marketing expense | 227,720 | 162,001 | |||||||||
| Variable marketing margin | $ | 99,547 | $ | 77,727 | |||||||
Below is a reconciliation of selling and marketing expense, the most directly comparable GAAP measure, to variable marketing expense:
|
Three Months Ended March 31, |
|||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Selling and marketing expense | $ | 238,568 | $ | 172,751 | |||||||
| Non-variable selling and marketing expense | (10,848) | (10,750) | |||||||||
| Variable marketing expense | $ | 227,720 | $ | 162,001 | |||||||
The following is a reconciliation of net income (loss), the most directly comparable GAAP measure, to variable marketing margin:
|
Three Months Ended March 31, |
|||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Net income (loss) | $ | 17,266 | $ | (12,375) | |||||||
| Adjustments to reconcile to variable marketing margin: | |||||||||||
| Cost of revenue | 11,696 | 9,908 | |||||||||
|
Non-variable selling and marketing expense (1)
|
10,848 | 10,750 | |||||||||
| General and administrative expense | 27,990 | 30,660 | |||||||||
| Product development | 11,467 | 11,904 | |||||||||
| Depreciation | 4,185 | 4,297 | |||||||||
| Amortization of intangibles | 1,288 | 1,307 | |||||||||
| Restructuring and severance | 939 | 798 | |||||||||
| Litigation settlements and contingencies | 20 | 15,212 | |||||||||
| Interest expense, net | 8,566 | 9,084 | |||||||||
| Other income | (369) | (1,388) | |||||||||
| Income tax expense (benefit) | 5,651 | (2,430) | |||||||||
| Variable marketing margin | $ | 99,547 | $ | 77,727 | |||||||
| (1) | Represents the portion of selling and marketing expense not attributable to variable costs paid for advertising, direct marketing and related expenses. Includes overhead, fixed costs and personnel-related expenses. | ||||
Adjusted EBITDA
We report Adjusted EBITDA as a supplemental measure to GAAP. This measure is the primary metric by which we evaluate the performance of our businesses, on which our marketing expenditures and internal budgets are based and by which, in most years, management and many employees are compensated. We believe that investors should have access to the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP results. We provide and encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures discussed below.
Definition of Adjusted EBITDA
We report Adjusted EBITDA as net income adjusted to exclude interest, income tax, amortization of intangibles and depreciation, and to further exclude (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on disposal of assets, (4) gain/loss on investments (5) restructuring and severance expenses, (6) litigation settlements and contingencies, (7) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), (8) contributions to the LendingTree Foundation, (9) dividend income, and (10) one-time items. Adjusted
EBITDA has certain limitations in that it does not take into account the impact to our statement of operations of certain expenses, including depreciation, non-cash compensation and acquisition-related accounting. We endeavor to compensate for the limitations of the non-GAAP measures presented by also providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
One-Time Items
Adjusted EBITDA is adjusted for one-time items, if applicable. Items are considered one-time in nature if they are non-recurring, infrequent, or unusual and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules. For the periods presented below, there are no adjustments for one-time items.
Non-Cash Expenses that are Excluded from Adjusted EBITDA
Non-cash compensation expense consists principally of expense associated with grants of restricted stock, restricted stock units and stock options, some of which awards have performance-based vesting conditions. Non-cash compensation expense also includes expense associated with employee stock purchase plans. These expenses are not paid in cash, and we include the related shares in our calculations of fully diluted shares outstanding. Upon settlement of restricted stock units, exercise of certain stock options or vesting of restricted stock awards, the awards may be settled, on a net basis, with us remitting the required tax withholding amount from our current funds.
Amortization of intangibles are non-cash expenses relating primarily to intangible assets acquired through acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives.
The following table is a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA.
|
Three Months Ended March 31, |
|||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Net income (loss) | $ | 17,266 | $ | (12,375) | |||||||
| Adjustments to reconcile to Adjusted EBITDA: | |||||||||||
| Amortization of intangibles | 1,288 | 1,307 | |||||||||
| Depreciation | 4,185 | 4,297 | |||||||||
| Restructuring and severance | 939 | 798 | |||||||||
| Loss on impairments and disposal of assets | 3 | 254 | |||||||||
| Loss on investments | 359 | - | |||||||||
| Non-cash compensation expense | 4,060 | 9,867 | |||||||||
| Contribution to LendingTree Foundation | 400 | - | |||||||||
| Litigation settlements and contingencies | 20 | 15,212 | |||||||||
| Interest expense, net | 8,566 | 9,084 | |||||||||
| Dividend income | (728) | (1,388) | |||||||||
| Income tax expense (benefit) | 5,651 | (2,430) | |||||||||
| Adjusted EBITDA | $ | 42,009 | $ | 24,626 | |||||||
Financial Position, Liquidity and Capital Resources
General
As of March 31, 2026, we had $85.5 million of cash and cash equivalents, compared to $81.1 million of cash and cash equivalents as of December 31, 2025.
We expect our cash and cash equivalents and cash flows from operations to be sufficient to fund our operating needs for the next twelve months and beyond. We will continue to monitor the impact of the current economic conditions, including interest rates, and inflation on our liquidity and capital resources.
For more information, see Note 10-Debt, in the notes to the consolidated financial statements included elsewhere in this report.
Equity Distribution Agreement
In July 2024, we entered into an Equity Distribution Agreement in connection with the establishment of an ATM Equity Program under which we may sell up to an aggregate of $50.0 million of shares of our common stock. No sales have been made under the Equity Distribution Agreement since its inception.
Credit Facilities
On August 21, 2025, we entered into a $475.0 million first lien term loan facility ("the 2025 Credit Facility"), consisting of a $75.0 million revolving credit facility (the "2025 Revolving Credit Facility") and a $400.0 million term loan facility (the "2025 Term Loan"), both with maturities of August 21, 2030. Proceeds from the 2025 Facility were used to refinance two previously outstanding term loans and for working capital and general corporate purposes.
As of May 1, 2026, we have $398.0 million outstanding under the 2025 Term Loan and we have $75.0 million available for borrowing under the 2025 Revolving Credit Facility.
See Note 10-Debt for additional information.
Cash Flows
Our cash flows are as follows:
|
Three Months Ended March 31, |
|||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Net cash provided by (used in) operating activities | $ | 11,552 | $ | (210) | |||||||
| Net cash used in investing activities | (2,718) | (3,414) | |||||||||
| Net cash (used in) provided by financing activities | (4,389) | 23,420 | |||||||||
Cash Flows from Operating Activities
Our largest source of cash provided by our operating activities is revenues generated by our products. Our primary uses of cash from our operating activities include advertising and promotional payments. In addition, our uses of cash from operating activities include compensation and other employee-related costs, other general corporate expenditures, litigation settlements and contingencies, and income taxes.
Net cash provided by operating activities increased in the first three months of 2026 from the first three months of 2025 primarily due to increases in revenue, partially offset by operating costs.
Cash Flows from Investing Activities
Net cash used in investing activities in the first three months of 2026 and 2025 of $2.7 million and $3.4 million, respectively, consisted of capital expenditures primarily related to internally developed software.
Cash Flows from Financing Activities
Net cash used in financing activities in the first three months of 2026 of $4.4 million consisted of $3.4 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options and $1.0 million for a scheduled payment on the 2025 Term Loan.
Net cash provided by financing activities in the first three months of 2025 of $23.4 million consisted primarily of $49.5 million of net proceeds from a term loan partially offset by repurchases of convertible notes for $19.7 million, term loan
repayments of $3.8 million and $2.6 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options.
New Accounting Pronouncements
For information regarding new accounting pronouncements, See Note 2-Significant Accounting Policies, in Part I, Item 1 consolidated financial statements of this Quarterly Report on Form 10-Q.
LendingTree Inc. published this content on May 01, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 01, 2026 at 20:23 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]