What happened
Shares of LendingTree (TREE +0.12%) were falling today as the online loan marketplace posted disappointing results in its second-quarter earnings report, missing top-line estimates and slashing its full-year revenue guidance.
As a result, the stock was down 18.8% as of 11:02 a.m. ET.
NASDAQ: TREE
Key Data Points
So what
LendingTree, which provides an online platform to allow borrowers to easily search for, compare, and obtain loans, said that revenue in the quarter fell 30% to $182.5 million, missing estimates at $193.6 million.
Performance was weak across the business with revenue from its home, personal loans, small business, credit card, and insurance segments all down significantly.
LendingTree has adjusted its cost structure to adapt to a decline in demand from its lending partners and tightening credit standards. It implemented multiple rounds of layoffs, including letting go of 13% of its workforce at the end of March.
As a result, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell just 7% from $28.6 million to $26.7 million, while adjusted earnings per share jumped from $0.58 to $1.14, beating estimates at $0.30.
CEO Doug Lebda said: "Customer demand for new loans and insurance continues to outpace the appetite for new customers at our partners. We believe this imbalance will prove temporary and are encouraged by signals the Fed is nearing the end of its tightening campaign as the pace of inflation has slowed considerably."
Now what
Despite that optimism, the company reduced its full-year revenue guidance from $760 million-$800 million to $680 million-$700 million and now sees adjusted EBITDA of $70 million to $80 million, down from a prior range of $80 million to $90 million.
For the third quarter, it also forecast a sequential decline in revenue, calling for $155 million to $170 million. Not surprisingly, those numbers were also well below analyst estimates.
Given the headwinds in the lending environment and the guidance cut, it's not surprising to see the stock down sharply today.
