LendingTree Inc.
03/09/2026 | Press release | Distributed by Public on 03/09/2026 15:00
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere within this report. This discussion includes both historical information and forward-looking information that involves risks, uncertainties and assumptions. Our actual results may differ materially from management's expectations as a result of various factors, including but not limited to those discussed in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information."
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 offer 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 inflationary pressures and interest rates, and any resulting impacts on our financial position and results of operations.
During 2023, the challenging interest rate environment and inflationary pressures presented challenges for many of our mortgage, consumer and insurance partners. In our Home segment, mortgage rates hit multi-decade highs of nearly 8% in October, then proceeded to drop below 7% by December, ending the year at 6.6%. The continued high mortgage rates in 2023 and home affordability issues continued to cause declines in refinance volumes and purchase activity. Our Consumer segment was also negatively impacted by economic conditions, with successive Federal Reserve rate increases having their intended effect of tightening financial conditions. The availability of credit contracted and lenders were less inclined to make loans in an environment with high inflation and significantly increased cost of capital. In our Insurance segment, demand from our carrier partners remained volatile for much of the year as they continued to deal with persistent industry headwinds. In the last months of 2023, we began to see advertising budgets from our carrier partners increase.
During 2024, the challenging interest rate environment and inflationary pressures continued to present challenges for many of our mortgage lending partners. In our Home segment, mortgage rates remained relatively consistent in 2024, with the annual average mortgage rate in 2024 of 6.7% compared to 6.8% in 2023. However, these rates are more than doubled compared to the low annual average mortgage rates seen in 2021. The increased mortgage rates continued to cause reduced refinance volumes and continued to put pressure on purchase activity. Additionally, the restrictive lending conditions continued to pressure our Consumer segment. In our Insurance segment, demand from our carrier partners increased significantly in 2024.
During 2025, we continue to see high interest rates, inflationary pressures and low existing home sales negatively impacting our mortgage lending partners. In our Home segment, mortgage rates remained relatively consistent in 2025, with the annual average mortgage rate in 2025 of 6.6% compared to 6.7% in 2024,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, and our lenders are generally broadening in credit appetite. 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 as we head into 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.
Typically, when interest rates decline, we see increased consumer demand for mortgage refinancings, which in turn leads to increased traffic to our website and decreased selling and marketing efforts associated with that traffic. At the same time, lender demand for leads from third-party sources typically decreases as there are more consumers in the marketplace seeking refinancing and, accordingly, lenders receive more organic mortgage lead volume. Due to lower lender demand, our revenue earned per consumer typically decreases, but with correspondingly lower selling and marketing costs.
Conversely, when interest rates increase, we typically see decreased consumer demand for mortgage refinancing, leading to decreased traffic to our website and higher associated selling and marketing efforts associated with that traffic. At the same time, lender demand for leads from third-party sources typically increases, as there are fewer consumers in the marketplace and, accordingly, the supply of organic mortgage lead volume decreases. Due to high lender demand, we typically see an increase in the amount lenders will pay per matched lead, which often leads to higher revenue earned per consumer. However, increases in the amount lenders will pay per matched lead in this situation is limited by the overall cost models of our lenders, and our revenue earned per consumer can be adversely affected by the overall reduced demand for refinancing in a rising rate environment.
We dynamically adjust selling and marketing expenditures in all interest rate environments to optimize our results against these variables.
According to Freddie Mac, 30-year mortgage interest rates increased significantly during 2022, from a monthly average of 3.45% in January 2022, ending at a monthly average of 6.36% in December 2022. During 2023, 30-year mortgage interest rates reached a high of 7.62% in October. During 2024, 30-year mortgage interest rates remained relatively consistent, starting the year at a monthly average of 6.64% in January 2024 and ending at a monthly average of 6.72% in December 2024. During 2025, 30-year mortgage interest rates started the year at a monthly average of 6.96% in January 2025 and ended at a monthly average rate of 6.19% in December 2025.
On a full-year basis, 30-year mortgage interest rates have been in a narrow range with an average of 6.60% in 2025, 6.72% in 2024, and 6.80% in 2023.
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 of total mortgage origination dollars increased to 34% in 2025 from 21% in 2024 and 15% in 2023 due to the slight easing in average mortgage rates. Total refinance origination dollars increased by 99% in 2025 over 2024 and increased 59% in 2024 over 2023. Industry-wide mortgage origination dollars increased by 22% in 2025 over 2024 and increased 16% in 2024 over 2023.
Looking forward, the MBA is projecting 30-year mortgage interest rates to decrease slightly in 2026 to an average of 6.1%. According to MBA projections, the mix of mortgage origination dollars is expected to remain primarily with purchase mortgages with the refinance share representing just 34% for 2026.
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 19% in 2023 compared to 2022 and decreased a further 1% in 2024 from 2023. Existing home sales were flat in 2025. Fannie Mae expects a 7% increase in existing home sales in 2026 compared to 2025.
Convertible Note Maturity
On July 15, 2025, we repaid the $95.3 million outstanding principal amount of our 0.50% Convertible Senior Notes ("2025 Notes") upon maturity in cash plus $0.2 million of accrued interest. Upon this repayment, the 2025 Notes were extinguished and repaid in full, and we have no further obligations with respect to the 2025 Notes.
New Credit Facility and Refinancing
On August 21, 2025, we entered into a $475.0 million first lien term loan facility (the "2025 Facility") consisting of a $75 million revolving credit facility (the "2025 Revolving 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 the Credit Agreement (as defined herein) and 2024 Term Loan (as defined herein) and for working capital and general corporate purposes.
For more information, see Note 13-Debt, in the notes to the consolidated financial statements included elsewhere in this report.
Cost Reductions and Simplification of Business
On March 24, 2023, we committed to a workforce reduction plan (the "Reduction Plan"), to reduce operating costs, which included the elimination of approximately 13% of the Company's workforce. As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction. Part of this Reduction Plan included the shutdown of our LendingTree customer call center as well as our Medicare insurance agency operations within QuoteWizard. We estimate the Reduction Plan reduced annual compensation expense by approximately $14 million, comprised of $2 million in cost of revenue, $4 million in selling and marketing expense, $3 million in general and administrative expense, and $5 million in product development.
During September 2023, we completed workforce reductions of 14 employees. We incurred $0.9 million in severance charges in connection with the workforce reductions, consisting of cash expenditures for employee separation costs of approximately $0.7 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $0.2 million.
Separately, we made the decision to close our Ovation credit services business, an asset group within our Consumer segment, by mid- 2023. As a result, the Company recorded an asset impairment charge of $4.2 million in 2023 related to the write-off of certain long-term assets. Additionally, we incurred $2.1 million in severance charges in 2023 in connection with cash expenditures for employee separation costs. We acquired Ovation in 2018 to better serve those customers who come to LendingTree and receive suboptimal offers of credit. The business grew for a number of years before running into challenges in the wake of COVID-19, and more recently the industry has faced increased regulatory pressure. The business was capital-intensive, required elevated overhead, and future prospects were becoming uncertain.
The Ovation business accounted for approximately 3% of total revenue and 3% of total costs and expenses, with an immaterial impact to net income on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2022.
Regulations
Our revenue and earnings may fluctuate from time to time as a result of changes to federal, state, and industry-based laws and regulations, or changes to standards concerning the enforcement thereof. On January 26, 2024, the U.S. Federal Communications Commission (the "FCC") published regulations which, among other things, amended the consent requirements of the Telephone Consumer Protection Act of 1991 to close what the FCC refers to as the "lead generator loophole" by requiring "one-to-one consent" for outbound telemarketing calls or texts made using an automatic telephone dialing system or pre-recorded or artificial voice messages to wireless or residential numbers. The new "one-to-one consent" rule was scheduled to take effect on January 27, 2025.
However, on January 24, 2025, in Insurance Marketing Coalition Limited. v. Federal Communications Commission, the United States Court of Appeals for the Eleventh Circuit ruled that the "one-to-one consent" requirement was improper, preventing its implementation.
Results of Operations for the Years ended December 31, 2025 and 2024
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.
For information on fiscal 2023 results and similar comparisons, seeItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations for the Years ended December 31, 2024 and 2023 of our Form 10-K for the fiscal year ended December 31, 2024.
| Year Ended December 31, |
2025 vs. 2024
|
|||||||||||||||||||
| 2025 | 2024 |
$ Change |
% Change |
|||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Home | $ | 151,764 | $ | 128,854 | $ | 22,910 | 18 | % | ||||||||||||
| Consumer | 253,370 | 222,462 | 30,908 | 14 | % | |||||||||||||||
| Insurance | 711,880 | 548,704 | 163,176 | 30 | % | |||||||||||||||
| Other | 310 | 199 | 111 | 56 | % | |||||||||||||||
| Revenue | 1,117,324 | 900,219 | 217,105 | 24 | % | |||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
|
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
42,525 | 36,072 | 6,453 | 18 | % | |||||||||||||||
| Selling and marketing expense | 812,904 | 635,963 | 176,941 | 28 | % | |||||||||||||||
| General and administrative expense | 112,888 | 108,705 | 4,183 | 4 | % | |||||||||||||||
| Product development | 45,251 | 46,358 | (1,107) | (2) | % | |||||||||||||||
| Depreciation | 16,459 | 18,300 | (1,841) | (10) | % | |||||||||||||||
| Amortization of intangibles | 5,190 | 5,889 | (699) | (12) | % | |||||||||||||||
| Restructuring and severance | 1,633 | 508 | 1,125 | 221 | % | |||||||||||||||
| Litigation settlements and contingencies | 15,661 | 3,797 | 11,864 | 312 | % | |||||||||||||||
| Total costs and expenses | 1,052,511 | 855,592 | 196,919 | 23 | % | |||||||||||||||
| Operating income | 64,813 | 44,627 | 20,186 | 45 | % | |||||||||||||||
| Other (expense) income, net: | ||||||||||||||||||||
| Interest (expense) income, net | (46,787) | (27,849) | 18,938 | 68 | % | |||||||||||||||
| Other income (expense) | 2,998 | (54,162) | (57,160) | (106) | % | |||||||||||||||
| Income (loss) before income taxes | 21,024 | (37,384) | 58,408 | 156 | % | |||||||||||||||
| Income tax benefit (expense) | 130,284 | (4,320) | (134,604) | (3,116) | % | |||||||||||||||
| Net income (loss) and comprehensive income (loss) | $ | 151,308 | $ | (41,704) | $ | 193,012 | 463 | % | ||||||||||||
Revenue
Revenue increased in 2025 compared to 2024 due to increases in our Insurance, Consumer and Home segments.
Revenue from our Insurance segment increased $163.2 million, or 30%, to $711.9 million in 2025 from $548.7 million in 2024. The increase in revenue was due to a 22% increase volume, representing $127.0 million of the increase and a 7% increase in revenue earned per consumer, representing $36.2 million of the increase. We measure volume for our insurance product 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, student 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 $30.9 million in 2025 from 2024, or 14%, primarily due to increases in small business and personal loans, partially offset by a decrease in credit cards.
Revenue from our personal loans product increased $13.0 million, or 13%, to $114.4 million in 2025 from $101.4 million in 2024. The increase in revenue was primarily due to a14% increase in volume, representing $13.9 million of an increase. We measure volume for our personal loans product as the number of unique consumers completing request forms.
For the periods presented, no other products in our Consumer segment represented more than 10% of revenue; however, certain other Consumer products experienced notable changes.Revenue from our small business loans product increased $33.7 million, or 60%, in 2025 compared to 2024, due to increases in the number of consumers completing request forms and revenue earned per consumer. Revenue from our credit cards product decreased $10.3 million, or 43% in 2025 compared to 2024 primarily due to a decrease in revenue earned per click and volume.
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 $22.9 million, or 18%, in 2025 from 2024 primarily due to to an increase in revenue from our home equity loans product.
Revenue from our home equity loans and lines of credit product increased $22.3 million, or 26%, to $109.8 million in 2025 from $87.5 million in 2024. The increase in revenue was due to a 47% increase in volume, representing an increase of $35.1 million, partially offset by a 15% decrease in revenue earned per consumer, representing a $12.8 million decrease. We measure volume for our home equity loans and lines of credit as the number of consumers completing request forms.
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 2025 compared to 2024 primarily due to an increase in compensation and benefits of $5.6 million.
Cost of revenue as a percentage of revenue remained consistent at 4% in 2025 and in 2024.
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 advertisement is first run.
Selling and marketing expense increased in 2025 compared to 2024 primarily due to the $174.8 million increase 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:
| Year Ended December 31, | 2025 vs. 2024 | |||||||||||||||||||
| 2025 | 2024 |
$ Change |
% Change |
|||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Online | $ | 766,416 | $ | 592,019 | $ | 174,397 | 29 | % | ||||||||||||
| Broadcast | 16 | 39 | (23) | (59) | % | |||||||||||||||
| Other | 4,248 | 3,850 | 398 | 10 | % | |||||||||||||||
| Total advertising and promotional expense | $ | 770,680 | $ | 595,908 | $ | 174,772 | 29 | % | ||||||||||||
In the periods presented, advertising and promotional expenses are equivalent to the non-GAAP measure variable marketing expense. SeeVariable 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 2025 compared to 2024 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 increased in 2025 compared to 2024, primarily due to an increase in compensation and benefits of $9.0 million.
Non-cash compensation expense, included in total compensation and benefits noted above, within general and administrative expense increased in 2025 compared to 2024 primarily due to the acceleration of non-cash compensation expense of $5.8 million on certain equity awards associated with our previous Founder and Chief Executive Officer. For additional information, seeNote-11-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 decreased to 10% in 2025 from 12% in 2024.
Litigation settlements and contingencies
In 2025 and 2024, we incurred $15.2 million and $3.8 million, respectively, of expenses for litigation contingencies due to the Mantha litigation. SeeNote 15- Contingencies in the notes to the consolidated financial statements for additional information on litigation matters.
Interest (expense) income, net
In March 2024 and March 2025, we drew $125.0 million and $50 million, respectively, on the 2024 Term Loan (as defined herein). The incremental borrowing in 2024 and 2025 resulted in an increase of $2.5 million of interest expense in 2025 compared to 2024.
In the third quarter of 2025, we refinanced our Credit Agreement (as defined herein) and 2024 Term Loan, which collectively had $402.8 million outstanding, with proceeds from the $400.0 million 2025 Term Loan (as defined herein) and cash on hand at par plus accrued and unpaid interest. As a result of the refinancing, we recognized a loss on the extinguishment of $7.9 million due to the write-off of unamortized debt issuance costs and original issue discount costs which are included in interest expense, net in the consolidated statement of operations and comprehensive income.
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.
In the third quarter of 2024, we repurchased approximately $7.6 million in principal amount of our 2025 Notes for $7.2 million and in the second quarter of 2024, we repurchased approximately $161.3 million in principal amount of our 2025 Notes for $151.7 million. As a result of these repurchases, we recognized a gain on the extinguishment of $10.1 million and a loss on the write-off of unamortized debt issuance costs of $1.1 million, both of which are included in interest expense, net in the consolidated statements of operations and comprehensive income.
SeeNote 13-Debt for additional information.
Other Income
We incurred an impairment charge of $58.4 million in 2024 related to our investments in equity securities.
SeeNote 7-Equity Investments for additional information.
Income tax benefit (expense)
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands, except percentages) | |||||||||||
| Income tax benefit (expense) | $ | 130,284 | $ | (4,320) | |||||||
| Effective tax rate | (619.7) | % | (11.6) | % | |||||||
For 2025, the effective tax rate varied from the federal statutory rate of 21% primarily due to the $149.5 million tax benefit to reduce the valuation allowance against our net deferred tax assets. For 2024, the effective tax rate varied from the federal statutory rate of 21% primarily due to the change in the valuation allowance, net of the current period change in tax effected net indefinite-lived intangibles.
SeeNote-12 Income Taxes in the notes to the consolidated financial statements included elsewhere in this report for additional information on the valuation allowance.
Segment Profit
| Year Ended December 31, | 2025 vs. 2024 | ||||||||||||||||
| 2025 | 2024 |
$ Change |
% Change |
||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Home | |||||||||||||||||
| Revenue | $ | 151,764 | $ | 128,854 | $ | 22,910 | 18 | % | |||||||||
|
Segment marketing expense (1)
|
103,421 | 88,958 | 14,463 | 16 | % | ||||||||||||
| Segment profit | 48,343 | 39,896 | 8,447 | 21 | % | ||||||||||||
| Segment margin | 32% | 31% | |||||||||||||||
| Consumer | |||||||||||||||||
| Revenue | 253,370 | 222,462 | 30,908 | 14 | % | ||||||||||||
|
Segment marketing expense (1)
|
123,922 | 111,925 | 11,997 | 11 | % | ||||||||||||
| Segment profit | 129,448 | 110,537 | 18,911 | 17 | % | ||||||||||||
| Segment margin | 51% | 50% | |||||||||||||||
| Insurance | |||||||||||||||||
| Revenue | 711,880 | 548,704 | 163,176 | 30 | % | ||||||||||||
|
Segment marketing expense (1)
|
537,463 | 389,474 | 147,989 | 38 | % | ||||||||||||
| Segment profit | 174,417 | 159,230 | 15,187 | 10 | % | ||||||||||||
| Segment margin | 25% | 29% | |||||||||||||||
| Other | |||||||||||||||||
| Revenue | 310 | 199 | 111 | 56 | % | ||||||||||||
|
Segment marketing expense (1)
|
471 | 294 | 177 | 60 | % | ||||||||||||
| Other | (161) | (95) | (66) | (69) | % | ||||||||||||
| Total | |||||||||||||||||
| Revenue | 1,117,324 | 900,219 | 217,105 | 24 | % | ||||||||||||
|
Segment marketing expense (1)
|
765,277 | 590,651 | 174,626 | 30 | % | ||||||||||||
| Segment profit | $ | 352,047 | $ | 309,568 | $ | 42,479 | 14 | % | |||||||||
| Segment margin | 32% | 34% | |||||||||||||||
|
(1)Segment marketing expense represents the potion 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.
|
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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. SeeNote 19-Segment Information in the notes to the consolidated financial
statements included elsewhere in this report for additional information on segments and a reconciliation of segment profit to pre-tax income (loss).
HOME
Home segment revenue increased 18% to $151.8 million in 2025 compared to 2024 and segment profit increased to $48.3 million in 2025, an increase of 21% compared to 2024. Our Home segment margin, which is segment profit divided by segment revenue, increased slightly to 32% in 2025 compared to 31% in 2024.
Revenue from our home equity loan product of $109.8 million in 2025 increased 26% compared to 2024. As longer-term rates have remained relatively stable and higher than most existing first mortgages, second lien products offer an attractively priced source of capital for homeowners.
Within Home, our core mortgage business generated revenue of $42.0 million in 2025, down 1% compared to 2024. 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. Our mortgage business 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. According to Freddie Mac, the 30-year mortgage interest rates have remained elevated with a yearly average of 6.6% in 2025 compared to 6.7% in 2024.
The Mortgage Bankers Association expects overall mortgage originations to increase 7% in 2026. The forecast calls for total loan originations of $2.2 trillion and purchase loans are expected to account for 66% of origination volume.
CONSUMER
Revenue in our Consumer segment increased 14% to $253.4 million in 2025 from 2024 with segment profit of $129.4 million in 2025, an increase of 17% from 2024. Our Consumer segment margin increased slightly to 51% in 2025 compared to 50% in 2024.
Revenue from our personal loan product of $114.4 million increased 13% in 2025 compared to 2024. We saw a broadening in the credit appetite from our lender partners that led to a meaningful increase in close rates for our consumers.
Small business revenue increased 60% in 2025 compared to 2024. This increase in revenue was driven by the deliberate investment in our concierge sales team, which provides a high-touch service option for business owners working through the complex loan shopping process. We continue to invest in growing this team to power further small business growth in 2026.
Seethe section titled "Revenue" above for additional discussion of declines in product revenues within the Consumer segment.
INSURANCE
Insurance revenue of $711.9 million in 2025 increased 30% from 2024, while segment profit of $174.4 million in 2025 increased 10% from 2024. Insurance carriers are broadly enjoying very strong automotive underwriting results following multiple quarters of premium increases and stable loss cost trends, and are aggressively pursing new customers.
Our Insurance segment margin decreased to 25% in 2025 compared to 29% in 2024. The increased demand has created a competitive market to acquire customers seeking an auto policy, which has led to strong growth in both revenue as well as associated media costs. Our strategy is to capture the maximum level of carrier advertising budgets when we have an opportunity to drive incremental segment profit and take share from competitors. These incremental dollars have pressured overall segment margin while simultaneously contributing to robust segment profit.
Variable Marketing Expense and Variable Marketing Margin
We report variable marketing expense and variable marketing margin as supplemental measures to 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 (loss). Variable marketing margin is defined as revenue less variable marketing expense.
The following shows the calculation of variable marketing margin:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Revenue | $ | 1,117,324 | $ | 900,219 | |||||||
| Variable marketing expense | 770,680 | 595,908 | |||||||||
| Variable marketing margin | $ | 346,644 | $ | 304,311 | |||||||
Below is a reconciliation of selling and marketing expense, the most directly comparable GAAP measure, to variable marketing expense:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Selling and marketing expense | $ | 812,904 | $ | 635,963 | |||||||
| Non-variable selling and marketing expense | (42,224) | (40,055) | |||||||||
| Variable marketing expense | $ | 770,680 | $ | 595,908 | |||||||
The following is a reconciliation of net income (loss), the most directly comparable GAAP measure, to variable marketing margin:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Net income (loss) | $ | 151,308 | $ | (41,704) | |||||||
| Adjustments to reconcile to variable marketing margin: | |||||||||||
| Cost of revenue | 42,525 | 36,072 | |||||||||
|
Non-variable selling and marketing expense (1)
|
42,224 | 40,055 | |||||||||
| General and administrative expense | 112,888 | 108,705 | |||||||||
| Product development | 45,251 | 46,358 | |||||||||
| Depreciation | 16,459 | 18,300 | |||||||||
| Amortization of intangibles | 5,190 | 5,889 | |||||||||
| Restructuring and severance | 1,633 | 508 | |||||||||
| Litigation settlements and contingencies | 15,661 | 3,797 | |||||||||
| Interest expense, net | 46,787 | 27,849 | |||||||||
| Other expense (income) | (2,998) | 54,162 | |||||||||
| Income tax (benefit) expense | (130,284) | 4,320 | |||||||||
| Variable marketing margin | $ | 346,644 | $ | 304,311 | |||||||
| (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 Earnings Before Interest, Taxes, Depreciation and Amortization
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.
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Net income (loss) | $ | 151,308 | $ | (41,704) | |||||||
| Adjustments to reconcile to Adjusted EBITDA: | |||||||||||
| Amortization of intangibles | 5,190 | 5,889 | |||||||||
| Depreciation | 16,459 | 18,300 | |||||||||
| Restructuring and severance | 1,633 | 508 | |||||||||
| Loss on impairments and disposal of assets | (71) | 2,584 | |||||||||
| Loss on investments | 1,225 | 58,376 | |||||||||
| Non-cash compensation expense | 29,202 | 28,579 | |||||||||
| Litigation settlements and contingencies | 15,661 | 3,797 | |||||||||
| Interest expense, net | 46,787 | 27,849 | |||||||||
| Dividend income | (4,223) | (4,385) | |||||||||
| Income tax (benefit) expense | (130,284) | 4,320 | |||||||||
| Adjusted EBITDA | $ | 132,887 | $ | 104,113 | |||||||
Financial Position, Liquidity and Capital Resources
For information on fiscal 2023 results and similar comparisons, seeItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Financial Position, Liquidity and Capital Resources of our Form 10-K for the fiscal year ended December 31, 2024.
General
As of December 31, 2025, we had $81.1 million of cash and cash equivalents, compared to $106.6 million of cash and cash equivalents as of December 31, 2024.
In the first quarter of 2025, we repurchased approximately $20.0 million in principal amount of our 2025 Notes for $19.7 million resulting in 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. On July 15, 2025, the remaining $95.3 million outstanding 2025 Notes were fully repaid using cash on hand.
In March 2025 and 2024, we drew $50.0 million and $125.0 million, respectively, on the 2024 Term Loan.
In the third quarter of 2025, we refinanced our 2021 Credit Agreement and 2024 Term Loan, which collectively had $402.8 million outstanding, with proceeds from the $400.0 million 2025 Term Loan and cash on hand at par plus accrued and unpaid interest. As a result of the refinancing, we recognized a loss on the extinguishment of $7.9 million due to the write-off of unamortized debt issuance costs and original issue discount costs which are included in interest expense, net in the consolidated statement of operations and comprehensive income.
In the third quarter of 2024, we repurchased approximately $7.6 million in principal amount of our 2025 Notes for $7.2 million. In the second quarter of 2024, we repurchased approximately $161.3 million in principal amount of our 2025 Notes for $151.7 million plus accrued and unpaid interest of approximately $0.3 million. As a result of these repurchases, we recognized a gain on the extinguishment of $10.1 million and a loss on the write-off of unamortized debt issuance costs of $1.1 million, both of which are included in interest expense, net in the consolidated statements of operations and comprehensive income.
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 current economic conditions, including interest rates and inflation on our liquidity and capital resources.
SeeNote 13-Debt, in Part I. Item 1Financial Statements, for additional information.
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 the common stock. No sales were made under the Equity Distribution Agreement during 2025 or 2024.
Credit Facilities
On September 15, 2021, we entered into a Credit Agreement (the "Credit Agreement"), consisting of a $200.0 million Revolving Facility (the "Revolving Facility"), which was set to mature on September 15, 2026, and a $250.0 million delayed draw Term Loan Facility (the "2021 Term Loan" and together with the Revolving Facility, the "Credit Facility"), which was set to mature on September 15, 2028. We borrowed $250.0 million under the delayed draw term loan on May 31, 2022 and used $170.2 million of the proceeds to settle the our 0.625% Convertible Senior Notes due June 1, 2022.
On March 27, 2024, we entered a first lien term loan facility (the "2024 Term Loan"), consisting of $175.0 million which was set to mature on March 27, 2031. We drew $125.0 million of the 2024 Term Loan upon closing and drew the remaining $50.0 million on March 27, 2025. The proceeds of the 2024 Term Loan were used to pay fees and expenses incurred in connection with the closing of the 2024 Term Loan and delayed draw term loan and was used for working capital and general corporate purposes, including the repayment of our 2025 Notes on July 15, 2025.
On August 21, 2025, we entered into a $475.0 million first lien term loan facility, consisting of a $75 million revolving credit facility and a $400.0 million term loan facility, both with maturities of August 21, 2030. Proceeds from the 2025 Facility were used to refinance the Credit Agreement and 2024 Term Loan, mentioned above, and for working capital and general corporate purposes.
As of March 9, 2026, we had $399.0 million borrowings outstanding under the 2025 Term Loan. As of March 9, 2026, we have $75.0 million available for borrowing under the 2025 Revolving Facility.
SeeNote 13-Debt, in Part I. Item 1Financial Statements, for additional information.
Operating Leases
We have operating lease obligations associated with office space in various cities across the country and office equipment. Our principal executive office is located in Charlotte, North Carolina under an approximate 15-year lease that commenced in the second quarter of 2021. We anticipate cash payments under operating lease obligations of $8.2 million in 2026. SeeNote 9-Leases in the notes to the consolidated financial statements included elsewhere in this report for more information.
Cash Flows
Our cash flows are as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Net cash provided by operating activities | $ | 73,103 | $ | 62,258 | |||||||
| Net cash used in investing activities | $ | (9,926) | $ | (11,218) | |||||||
| Net cash used in financing activities | $ | (88,698) | $ | (56,502) | |||||||
Cash Flows from Operating Activities
Our largest source of cash provided by our operating activities is revenue 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, certain contingent consideration payments, and income taxes.
Net cash provided by operating activities increased in 2025 from 2024 primarily due to increases in revenue, partially offset by operating costs.
Cash Flows from Investing Activities
Net cash used in investing activities in 2025 and 2024 consisted of capital expenditures primarily related to internally developed software of $12.4 million and $11.2 million, respectively, partially offset by proceeds from the sale of fixed assets in 2025.
Cash Flows from Financing Activities
Net cash used in financing activities in 2025 of $88.7 million consisted primarily of the repurchase of the 2025 Notes for $115.0 million, term loan repayments of $410.4 million and $2.8 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options, partially offset by net proceeds from term loans of $439.5 million.
Net cash used in financing activities in 2024 of $56.5 million consisted primarily of the repurchase of the 2025 Notes for $158.8 million, term loan repayments of $12.5 million and $2.2 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the employee stock purchase plan and the exercise of stock options offset by $117.6 million net proceeds from the 2024 Term Loan.
Critical Accounting Policies and Estimates
The following disclosure is provided to supplement the description of our accounting policies contained in Note 2-Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this report regarding significant areas of judgment. Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with generally accepted accounting principles. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Because of the size of the financial statement elements to which they relate, some of our accounting policies and estimates have a more significant impact on our consolidated financial statements than others. A discussion of some of our more significant accounting policies and estimates follows.
Income Taxes
Estimates of current and deferred income taxes and the significant items giving rise to the deferred assets and liabilities are shown in Note 12-Income Taxes in the notes to the consolidated financial statements included elsewhere in this report and reflect management's assessment of actual future taxes to be paid on items reflected in the consolidated financial statements, giving consideration to both timing and the probability of realization. Actual income taxes could vary from these estimates due to future changes in income tax law, state income tax apportionment or the outcome of any review of our tax returns by the IRS and/or state tax authorities, as well as actual operating results that may vary significantly from anticipated results.
We also recognize liabilities for uncertain tax positions based on the two-step process prescribed by the accounting guidance for uncertainty in income taxes. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. This measurement step is inherently difficult and requires subjective estimations of such amounts to determine the probability of various possible outcomes. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.
A valuation allowance is provided on deferred tax assets if it is determined that it is "more likely than not"that the deferred tax asset will not be realized.
During 2025, we recorded tax benefit of $149.5 million to reduce the valuation allowance we established in 2022 against our net deferred tax assets. Management determined upon review of the deferred tax assets for recoverability that sufficient positive evidence existed to conclude a substantial portion of the valuation allowance was no longer needed. Based on sustained profitability, improved forecasts of future taxable income, and the reversal of existing temporary differences, we concluded that it is more likely than not that we will be able to utilize the deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. We maintain a valuation allowance of $18.0 million primarily related to certain states for which we estimate the net operating losses will expire prior to being utilized and other deferred tax assets related to equity investments for which it is not more likely than not that the deferred tax assets will be realized. Should there be a change in the valuation allowance in the future, the income tax provision would increase or decrease in the period in which the allowance is changed.
At December 31, 2025, 2024 and 2023, we maintained a valuation allowance of $18.0 million, $167.5 million and $162.5 million, respectively, against our net deferred tax assets.
Stock-Based Compensation
The forms of stock-based awards granted to our employees are principally restricted stock units ("RSUs"), RSUs with performance conditions, stock options, and employee stock purchases related to the Employee Stock Purchase Plan ("Employee Stock Purchase Rights"). Further, stock options with market conditions, restricted stock awards ("RSAs") with performance conditions and RSAs with market conditions have been granted to our current or former Chief Executive Officer. The value of RSUs is measured at their grant dates as the fair value of common stock and amortized ratably as non-cash compensation expense over the vesting term. The value of stock options issued and Employee Stock Purchase Rights are generally estimated using a Black-Scholes option pricing model. The value of performance-based grants is measured at their grant dates and recognized as non-cash compensation expense, considering the probability of the targets being achieved. Performance-based grants with a market condition are generally valued using a Monte Carlo simulation model. If an award is modified, we determine if the modification requires a new calculation of fair value or change in the vesting term of the award. See Note 11-Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report for additional information on assumptions and inputs to the fair value determination of stock-based awards.
Evaluation of Goodwill Impairment
We test goodwill annually for impairment as of October 1, or more frequently upon the occurrence of certain events or substantive changes in circumstances. As part of our annual impairment testing of goodwill, we may elect to assess qualitative factors as a basis for determining whether it is necessary to perform the traditional quantitative impairment testing. If our assessment of these qualitative factors indicates that it is not more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset is less than its carrying value, then no further testing is required. Otherwise, the goodwill reporting unit must be quantitatively tested for impairment.
Performing the quantitative test for goodwill impairment that compares the reporting unit fair value with its carrying value using a discounted cash flow and market analysis requires the exercise of significant judgments, including judgments about appropriate discount rates, revenue growth rates, marketing spend, direct operating expenses, the amount and timing of expected future cash flows, and market multiples. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.
During the third quarter of 2023, our market capitalization declined significantly compared to the second quarter of 2023. The closing stock price on September 29, 2023 was $15.50 reflecting a market capitalization below our book value. In addition, the effects of the challenging interest rate environment, low for-sale home inventories and the rise in home prices in the Home reporting unit and consumer price inflation negatively impacting carrier underwriting in the Insurance reporting unit continue to provide revenue headwinds. Based on these factors, we concluded that a triggering event had occurred and an interim quantitative impairment test was performed as of September 30, 2023. Upon completing the quantitative goodwill impairment test, we concluded that the carrying value of the Insurance reporting unit exceeded its fair value which resulted in a goodwill impairment charge of $38.6 million. The fair value of the Home and Consumer reporting units exceeded their carrying amounts, indicating no goodwill impairment. The fair values of each reporting unit were determined using a combination of the income approach and the market approach valuation methodologies.
We will continue to monitor each of the reporting units and the impact of business or economic changes on the fair value of the reporting unit. Changes in the timing of the recovery of the mortgage business, inflation, interest rates and other changes in current expectations could cause an impairment to the Insurance, Mortgage or Consumer reporting units.
The value of goodwill subject to assessment for impairment at December 31, 2025 is $381.5 million.
Recoverability of Long-Lived Assets
We review the carrying value of all long-lived assets, primarily property and equipment, definite-lived intangible assets and operating lease right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may be impaired. Impairment is considered to have occurred whenever the carrying value of a long-lived asset cannot be recovered from cash flows that are expected to result from the use and eventual disposition of the asset. This recoverability test requires us to make assumptions and judgments related to factors used in a calculation of undiscounted cash flows, including, but not limited to, management's expectations for future operations and projected cash flows. The key assumptions used in this calculation include Adjusted EBITDA, the remaining useful lives of the primary cash flow generating asset in the asset group and, to a lesser extent, the deduction of capital expenditures and taxes paid in cash to arrive at net cash flows.
Capitalized implementation costs incurred in a hosting arrangement that is a service contract are also allocated to and included within long-lived asset groups tested for recoverability.
The combined value of long-lived assets and capitalized implementation costs incurred in a hosting arrangement that is a service contract subject to assessment for impairment is $98.0 million at December 31, 2025.
Equity Investments
Our equity investments do not have a readily determinable fair value and, upon acquisition, we elected the measurement alternative to value these investments. Accordingly, the equity investments will be carried at cost less impairment, if any, and subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar investments. Additionally, if a qualitative assessment identifies impairment indicators, then the equity investments must be evaluated for impairment and written down to its fair value, if it is determined that the fair value is less than the carrying value. Any gains or losses are included within other (expense) income in the consolidated statement of operations and comprehensive income.
We incurred impairment charges of $1.2 million, $58.4 million and $114.5 million on our investments in equity securities during 2025, 2024 and 2023, respectively. See Note 7-Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional information. The carrying value of our equity investments at December 31, 2025 is $0.5 million.
New Accounting Pronouncements
See Note 2-Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this report for a description of recent accounting pronouncements.
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