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Date
Thursday, Oct. 30, 2025, at 5 p.m. ET
Call participants
- Chief Executive Officer — Scott Peyree
- Chief Financial Officer — Jason Bengel
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Takeaways
- Revenue -- $308 million for the quarter, marking the company's second-highest quarterly revenue.
- Segment revenue growth -- All three segments reported double-digit year-over-year revenue and VMD growth.
- Insurance carrier spend -- Spend from the fourth through tenth largest carriers, excluding the top three, increased nearly 60% year-over-year.
- Small business performance -- Number of loans closed for partners grew 30% compared to the prior year, and revenue increased 50% year-over-year.
- Personal loans close rates -- Double-digit growth in close rates for both prime and mid-prime debt consolidation loans.
- Home equity product revenue -- Increased 35% despite a slow housing market.
- Mortgage market context -- Existing home sales remain at about 4 million annual units, comparable to 2008/2009 levels.
- Capital allocation priority -- CFO Bengel said, "our first priority, our default is gonna be paying down debt. You know, that's a risk-free return of north of 8%. But now, because we have a covenant-light term loan, we do have the option to start thinking about buying back shares and doing selective M&A."
- Insurance segment revenue and margins -- Over $200 million of revenue, with just under $50 million of VMD in the segment, marking its second largest VMD quarter.
- Home insurance growth -- Home insurance VMD is up 80% year-over-year and comprises just under 20% of the insurance business.
- Health insurance growth -- Health insurance VMD grew 41% year-over-year.
- Legacy SEO traffic trends -- CEO Peyree said, "SEO is one of those categories. It's been very, I mean, I'll be honest. It's been very turbulent in Q3," noting significant industry-wide pressure on this channel.
- Leverage ratio -- CFO Bengel said, "our leverage has continued to come down to 2.6. It was 4.4 a year ago, and it was much higher than that even before that."
- Paid search traffic -- CEO Peyree disclosed that paid search traffic is "continuing to be very strong and growing," helping offset SEO channel volatility.
- Small lender growth strategy -- Management noted an "actively pursuing a small lender growth strategy," aiming to grow the lender network ahead of anticipated mortgage cycle inflection.
- Home equity positioning -- CEO Peyree described home equity as attractive for lenders despite lower profitability, enabling capacity build-up for future refinance demand.
Summary
LendingTree (TREE 0.59%) reported broad-based performance improvements, with management highlighting a durable revenue mix shift, especially in insurance, and significant contributions from non-top-three carrier partners. The company emphasized substantial deleveraging, which has enabled new capital allocation flexibility, prioritizing debt paydown but allowing for opportunistic buybacks and small acquisitions. Leadership cited shifts in digital acquisition channels and product-level strategies as key to both top-line growth and the evolving margin profile, and addressed business positioning for a slower mortgage cycle and preparations for an eventual refinancing upturn.
- CEO Peyree said, "our home insurance VMD is up 80% year over year. Home insurance is a hot, hot product for us. That's probably the biggest growth product we have in the company. And it is about 20%. I think it's just under 20% of our insurance business."
- CEO Peyree said, "health insurance is not a great story. It's a 41% year-over-year VMD. And it's just over 10% of our insurance business."
- CEO Peyree said, "I would not want to be a company that's highly dependent on legacy SEO traffic. I'll make that statement. I think it's fair to say the era of, you know, quote-unquote free rent on Google is coming to an end."
- CEO Peyree said, "the paid search traffic, which we are very, very good at ourselves, is continuing to be very strong and growing."
- CEO Peyree said, "we're really actively pursuing a small lender growth strategy and we're really ramping up now pretty quickly just our total network. So not just the major direct-to-consumer players, but, I mean, when we hit that inflection point, we would like to have, you know, a thousand plus clients on the network to really soak up that demand when it explodes."
Industry glossary
- VMD (Variable Marketing Dollars): Company-specific metric representing marketing-driven, variable dollar contribution from segment operations or campaigns, often linked to cost-per-action or cost-per-lead economics.
- LLM (Large Language Model): Advanced artificial intelligence systems trained on vast datasets to generate human-like text, used in search query and lead origination strategies.
- AIO (Artificial Intelligence Optimization): Industry term for deploying AI algorithms to optimize digital marketing or consumer acquisition channels, including personalization and lead targeting.
- SEO (Search Engine Optimization): Strategies to improve organic web traffic rankings through content optimization and technical website practices.
Full Conference Call Transcript
Scott Peyree: Thank you, Andrew. Thanks to everyone for joining us today as we discuss our third quarter results. First off, all of us here at LendingTree, Inc. are deeply saddened by our founder Doug Lebda's sudden passing a few weeks ago. Doug was a visionary leader who had an impact on every part of our company. He was truly passionate about creating a marketplace where consumers could find the best financial product for them at the most competitive price. He coined our long-standing and well-known marketing tagline, "When banks compete, you win." Personally, I came to know Doug as he explored buying the company I founded, QuoteWizard, back in 2018.
At that time, I appreciated his entrepreneurial spirit that we both shared, his deep passion for the business, and the strong and similar culture he had at LendingTree, Inc. compared to QuoteWizard. After LendingTree, Inc. ultimately bought my company, I was able to know him more closely, especially in the last two years I served as president and chief operating officer. I viewed him as a great boss, great business partner, and a great friend. I also came to appreciate how much he cared about all the employees at LendingTree, Inc. For example, he insisted that full-time employees receive stock as part of their compensation so they would think like owners.
He was present at all kinds of internal company events, of course, emceeing every quarterly all-hands meeting, but also showing up at small internal meetings or celebrations, always offering encouraging words and pushing all of us to achieve more. The outpouring of condolences we have received since his passing from people across the country and within our industry has been truly overwhelming. All of us at LendingTree, Inc. mourn him and keep his wife, daughters, parents, and family in our thoughts as we carry on with his legacy. I'm honored to become the second CEO in the company's history and carry the mantle of what Doug founded nearly thirty years ago.
Doug and I were aligned on driving continuous improvement in the consumer shopping experience, optimizing our business through operational excellence initiatives, which I started to implement two years ago upon being appointed the COO. We also share the belief that improvements in AI technology will greatly benefit the consumer experience when they come to LendingTree, Inc. shopping for financial products. I'm very excited as to how AgenTeq AI, LLMs, and other AI tools can transform the shopping experience of our products over the next few years.
Finally, we both agreed we needed to ensure our balance sheet was equipped not just to survive future periods of economic stress, but to thrive in them, allowing us to go on the offense when competitors are pulling back and our customers need us more than ever. Reflecting on the incredible business Doug created, it seems appropriate that in the third quarter this year, our revenue of $308 million was our second highest in the company's history, barely missing our high point when the Fed rates were essentially zero. Each of our three segments recorded double-digit year-over-year revenue and VMD growth. This is the sixth consecutive quarter we have reported revenue growth from the prior period.
The company's diversification across industries is allowing us to lean into areas of high demand, most notably from our insurance carrier partners looking for new auto customers. We have retaken a leadership position in the insurance marketplace. We will continue matching carriers with quality high-intent consumers, capturing an increasing share of those insurance companies' marketing budgets as we move into next year. It is a similar strategy we employed during the downturn in carrier demand in '23, which led us to being well-positioned with leading market share in the industry. The industry recovered and then boomed in '24.
Importantly, we began to see a strong ramp in spend outside of our top three carriers, an important indicator of the health and duration of this cycle. Specifically, in Q3, if you look at our fourth through tenth largest carriers on our network, so take out our top three carriers, those next seven spend with us increased by nearly 60% compared to a year ago. Our consumer segment is also producing fantastic results. Segment VMD grew 26% on the quarter and 11% revenue growth. Our small business team has just been spectacular and has benefited from our investment in the concierge sales strategy.
These high-touch customer service models helped us drive a 30% increase in the number of loans we closed for partners in this quarter versus last year and driving an overall 50% year-over-year increase in revenue. It has propelled growth in our high-margin bonus and revenue referral revenue streams as well. The personal loans business continues to grow nicely as lenders are steadily and cautiously widening their credit criteria for borrowers. Notably, close rates for both prime and mid-prime loans for debt consolidation grew by double digits in the quarter compared to the prior year. Record consumer credit card balances and the forecast for lower short-term interest rates should help accelerate the growth of this vertical in the next year.
The home segment is also doing quite well, despite persistent high mortgage rates in the sluggish housing market, revenue from our home equity product increased 35% in the third quarter. As lenders continue to target this product given the lack of demand for first mortgages. Existing home sales remain stuck around the 4 million annual unit level. You'd have to look back to the financial crisis period of 2008/2009 to find similarly low activity. Before we take your questions, I want to let the investor community know that we are extremely well-positioned to grow our business.
Doug created a revolutionary company, the first true online comparison shopping site, and I'm honored to lead it going forward and continue executing on its original vision. I would also like to thank all of the employees at LendingTree, Inc. for putting up such strong performance and positioning us well for continued growth in 2026. We are happy to open the line to your questions.
Operator: Thank you. At this time, we will conduct our question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Jed Kelly with Oppenheimer and Company Inc. Your line is now open.
Jed Kelly: Hey. Great. Thanks for taking my question. Just digging into the consumer segment, in the shareholder letter, you said your credit cards are getting back to your historical margins. And then if I look, it looks like consumer VMM is going to be at record annualized margins this year. So can you just talk about how we should think about all the moving puts and takes in that segment and the margin profile? And what we should look at going out into next year?
Scott Peyree: Yeah. Sure. Thanks, Jed. First off, I would probably say the consumer VMM being at the highest levels overall is largely driven by our small business. Just because our small business is generally a high-margin category, and it has grown spectacularly. You know, small business was our biggest lending business in consumer in the third quarter. And with the cost of our sales staff, our lead growth, positioning in that market, we do expect that to be continued strong growth for the indefinite future. And since it's a work, so we're very excited about that business and where it's going.
And honestly, I'd also say we have some other businesses, for proprietary reasons, I won't say specifically which ones, but we think we can move that similar concierge sales model into and we will be actively engaging that in '26 and starting to build a direct concierge sales team, which is both great for the customer consumer experience as well as the monetization of the traffic. To hit on credit cards briefly, yeah, we were, you know, the combination of rolling out Trequal and just pulling back the margins in that business has gotten really low. So there was a real focus over the past twelve to sixteen months of just like, alright.
Let's get the business back in good, healthy shape running at solid margins. And we have done that. And it's been a great, you know, it's a smaller piece of the overall consumer business, but it's much healthier today than it was a year or two ago. And I think that is positioned to get back in the top-level growth mode next year.
Jed Kelly: Okay. And then obviously, I think the other real good point about the quarter is just where the balance sheet is. So great job on your part getting it down to 2.5 times leverage. Can you just talk about where you're going to prioritize capital returns, buybacks, paying down debt, or investing in the business?
Scott Peyree: Thanks.
Jason Bengel: Yeah, Jed. This is Jason. I can take that one. Yeah, we're very happy with the completed refinancing this quarter. We think that's a great event that's gonna allow us much more flexibility going forward, like you said. You know, our leverage has continued to come down to 2.6. It was 4.4 a year ago, and it was much higher than that even before that. And so when it comes to capital allocation, I think our first priority, our default is gonna be paying down debt. You know, that's a risk-free return of north of 8%.
But now, because we have a covenant-light term loan, we do have the option to start thinking about buying back shares and doing selective M&A. So we're certainly gonna look at those things. If we do see the stock trading at an attractive price, we're certainly gonna consider it. If we do see an acquisition out there that's gonna be beneficial to us, we'll consider it. But I would say the default is generally gonna be paying down debt.
Jed Kelly: Thank you, and good luck, Scott.
Scott Peyree: Thank you.
Operator: Thank you so much. Our next question comes from the line of Ryan Tomasello with KBW. Your line is now open.
Ryan Tomasello: Hi, everyone. Thanks for taking the questions, and my sincere condolences for the loss of Doug. In your insurance business, Scott, if you can just elaborate on what gives you confidence that this cycle has legs into next year. And then just remind us the typical composition of revenue between the top and low end of the funnel. It sounds like, you know, variability in that mix is a main driver of the margin volatility. Just how you're thinking about what a reasonable trajectory is for segment margins in the insurance business from here? Thanks.
Scott Peyree: Okay. Yeah. I mean, just starting at the sustainability of the industry levels, I mean, I would just open with the insurance industry as a whole on a macro level. That remains in a very, very profitable position. These companies are, you know, after their deep downturn, they're in a very healthy position now. A healthy position to the level of where a number of companies are starting to look at rate reductions for their policies. I mean, they're that profitable. So I think we're just in a good position where all of the major clients that are spending marketing dollars with us are in very healthy positions.
So there's no reason to think that they won't continue to aggressively pursue market share in the upcoming year plus, which obviously is, you know, we're a major place to go if you're looking to increase your market share. Talking about, you know, the product lines within insurance, how it affects margins, that's a very true statement you're just making. You know, we've got clicks, leads, and calls are our main product lines in insurance. And if you, the clicks is generally by far the lowest margin product where leads and calls are much larger margin products, but they all work together.
So but what happens when you have some of our major clients that are click buyers, it drives your revenue way up, but at a lower margin profile. But what that does is buy it allows us to go out and buy and secure way more traffic that means we can sell more leads and calls at the end of the day. So your overall margin profile goes down, but you're generating so much revenue and you're selling off so many more leads and calls that your overall VMD goes up quite a bit. So that's just kind of the wave of the up and down as those click budgets may go up and down a lot.
But, you know, I would say, you we're a total VMD dollar company. We want to drive as much high-quality traffic as possible and make as much total VMD while we're doing that. And I think Q3 is very reflective of that strategy, over $200 million of revenue, but just under $50 million of VMD, our second biggest VMD quarter of all time. They are outside of Q4 last year, which was just abnormally high as we've discussed in previous earnings calls. And I think that this business, we are well-positioned, you know, especially the first six months of next year to see very strong VMD growth in the insurance segment.
Ryan Tomasello: Yes. And I'll just tack on to that. Just to Scott's point, if you look sequentially Q2 to Q3, insurance VMD went up $8 million that are largely gonna fall to EBITDA. And so that's what we're focused on, driving operating leverage, keeping expenses under control, and dropping VMD dollars to EBITDA. You know, when it comes to expenses, we're happy to invest in, you know, variable expenses that are gonna drive VMD and then focus on efficiency everywhere else just so we can, you know, really focus on driving operating leverage, you know, into 2026.
Ryan Tomasello: Thanks for that. And then consumer credit has come under more scrutiny of late. So I'm curious what the latest is you're hearing from your lending partners on appetite and credit boxes. And this is obviously with respect to your mainly, your personal loans business. Have you noticed any signs of tightening more recently, or do you think that there's still room to run on the conversion rates? Which sounds like they improved pretty nicely here in the quarter?
Scott Peyree: Yeah. I mean, I would say overall at a macro level, and I've seen the same things that you're seeing and referring to. I would say when you actually get to our clients, they're not really saying the same. You know, their credit boxes and their delinquency rates and all that are generally well within acceptable ratios for them at a high level. We've seen a few of our clients on the more deep subprime side of it pull back a little bit. So, you know, maybe there's a bit more concern when you get down towards the more deep subprime.
But, I mean, I would say for the most part at a macro level, we're seeing more expansion than contraction for credit boxes.
Ryan Tomasello: Great. Thanks for taking the questions and reiterate good luck, Scott.
Scott Peyree: Thank you. Thank you.
Operator: Thank you so much. Our next question comes from the line of Mike Grondahl with Northland.
Mike Grondahl: Yeah. Hey, guys. Condolences and prayers for Doug's family and the LendingTree, Inc. family. Two questions. One, could you talk at a high level about the SEO, the Gen AI sort of environment and how that's changing and kind of the quality of leads you're seeing overall and the conversion trends? Then secondly, I'd be curious just overall visibility in the business today vis-a-vis or as compared to a couple of the previous quarters?
Scott Peyree: Could you be a little bit more specific with your second question there?
Mike Grondahl: Yeah. Just you know, we debate from time to time revenue visibility that you guys have. Know, can you see out sixty days? Ninety days? Just sort of how you feel about your revenue visibility today versus prior quarters.
Scott Peyree: Okay. I would okay. So starting on the SEO front, along with, you know, LLM, AIO, strategy around there. You know? So, you know, OOM and AIO type traffic is going up. We like, from a conversion perspective, it's night and day when you get traffic from the LLMs or AIOs. I mean, it's literally, like, four to five times the conversion rate. And I think that's just because they've gotten so many answers at that point. You feel like these people are ready to transact by the time they come to you. So but that said, the traffic's way lower than the SEO.
And it's way lower on two levels of just obviously, if the consumer uptake of it, you know, there's still vastly more consumers going to the traditional, like, Google type search results versus the LLMs. You know? And then it's just the newness of placement within the LLMs and, you know, in this SEO strategy of getting that place in the LLM. So SEO is one of those categories. It's been very, I mean, I'll be honest. It's been very turbulent in Q3. As traffic has shifted and changed in legacy SEO. The entire financial services industry has been hit pretty hard by it. I'll I would not want to be a company that's highly dependent on legacy SEO traffic.
I'll make that statement. I think it's fair to say the era of, you know, quote-unquote free rent on Google is coming to an end. But then at the same time, the paid search traffic, which we are very, very good at ourselves, is continuing to be very strong and growing. So we're happy with that. So, yeah, it's definitely a turbulent market, and it's definitely a transitional period where there is still legacy SEO, and that is still important to be participating in, but it's also very important to be focusing on building your content and tools and data openness around LLMs and AIOs. And then getting and then moving to your second question, just about revenue outlook.
You know, I would say after, starting with insurance. After that's been so turbulent over the past few years, I would say just we're probably it's a little bit more steady and predictive now going forward as thing after that hypergrowth era. And I think it will still grow at some level, but not in the hypergrowth area. Consumer in mortgage, like, mortgage is a little trickier. Because mortgage is really about when do we get that inflection point where the refinance snowball starts to grow. Right? We were looking at some stats here and, you know, you look at about 5.75% mortgage rates.
That is about three times as many mortgage borrowers are in the money at that rate versus what the rate has been most of this year. So if you trend down to that level, that's probably where you really see the snowball start to happen. Now, you know, I'm not a soothsayer. Like, I can't tell you at what exact point we turned to that level. But when you hit that inflection point and you get to 5.75% and it keeps fading down below that, that snowball could build really fast. And revenue could blow up, and VMD could blow up really fast. There. And it will be hockey stick growth for a while.
There might even be a little bit of an upfront wave that comes through when it happens. But you just I think you kinda gotta get down to that 5.75% level for enough people to be in the money there. Consumer, I think consumer is probably the most steady or, like, we can look at just, like, our media practices growing, our media traffic. Growing our direct sales force. You know, that's just a bit more predictive on what the revenue will generate there. So I hope that answers your question.
Mike Grondahl: Yeah. No. It does. And maybe just one quick follow-up. On the mortgage side, are you seeing lenders engage more and get potentially ready for that refi environment at 5.75%? Are they moving today to be in a position to capture that?
Scott Peyree: Yeah. I think so. And I think what you see is, like, our home equity business has grown so much. I mean, equity is not near as profitable for these lenders as refi is. But the reason they're so staffed up and wanna buy some of so much of that home equity traffic, a big part of that is they wanna be ready for when the refi boom comes around and be staffed up for that. Another thing we're doing in the more control your own destiny mode, we're really actively pursuing a small lender growth strategy and we're really ramping up now pretty quickly just our total network.
So not just the major direct-to-consumer players, but, I mean, when we hit that inflection point, we would like to have, you know, a thousand plus clients on the network to really soak up that demand when it explodes.
Mike Grondahl: Great to hear. Thank you.
Scott Peyree: Yep.
Operator: Thank you so much. Our next question comes from the line of Melissa Wedel with JPMorgan. Your line is now open.
Melissa Wedel: Good morning. Thanks for taking my questions today. Most of mine have already been asked and answered. I thought it would be helpful though to follow-up on a reference earlier to potentially considering some M&A with the balance sheet flexibility that you now have. I think in the past, most of the acquisition activity that LendingTree, Inc. has done has been sort of bolt-on type acquisitions, with the exception of QuoteWizard. So if you think about that going forward, do you expect that to continue, or would you consider larger potential deals?
Scott Peyree: Yeah. I mean, at this point in our cycle, I don't think we're looking at any sort of larger, like QuoteWizard size deals, to be bluntly honest. But, I mean, yeah, if there's if you think about and you look at our network, I mean, like, one way you can look at it is what are the products and services, financial products and services we are not offering right now. And is there a small company out there that's built something good that helps round out our services that we can, like, use the power of our remarketing and email and SMS and call center to, like, to really drive a lot of growth on one of those products.
That was the type of thing we would be interested in. You look at something, hey. If someone has come up with something that is really unique on really improving the consumer shopping experience, that's probably something we would look at and be interested in. But, yeah, so that's just kind of a high level of the types of companies we look at.
Melissa Wedel: Okay. Appreciate that. And then finally, this is a small point. I think in the shareholder letter there was a reference to some homeowner type insurance policies and also health. Just wondering if you could give us an update on where those categories fall in terms of sort of contribution to revenue. Obviously, auto is gonna be the dominant one in insurance. I'm just curious where those are going to. Thanks.
Scott Peyree: Yeah. Melissa, I'm actually glad you asked because I actually made some notes because those are, you know, they kinda get hidden in the numbers, but those are really good stories for us as a company. And I take this opportunity to give a lot of credit to the teams at LendingTree, Inc. that are working on those product lines. You know, our home insurance VMD is up 80% year over year. Home insurance is a hot, hot product for us. That's probably the biggest growth product we have in the company. And it is about 20%. I think it's just under 20% of our insurance business. Health insurance is not a great story. It's a 41% year-over-year VMD.
And it's just over 10% of our insurance business. So that just hopefully gives you a high level of where those products are at.
Melissa Wedel: I appreciate that update. Thanks, Scott.
Operator: Thank you so much. As a reminder, everyone, to ask a question, please press 11 on your telephone. It will be advised that your hand is raised. To withdraw your question, please press 11 again. Alright. I am showing no further questions at this time. I would now like to turn it back to Scott Peyree for closing remarks.
Scott Peyree: Thank you, operator, and thank you, everyone, for your questions today. I look forward to speaking with you all on follow-up calls and in person and investor conferences in the near future. Have a great day.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.