What: Shares of LendingTree (NASDAQ:TREE) are surging, rising by 18% as of 11:15 a.m. EST Thursday on the back of a better-than-expected earnings report.

So what: The online lending marketplace announced that it earned adjusted net income of $34.9 million in the fourth quarter, a 265% improvement over the sequential quarter, and a 512% improvement over the same quarter last year. That amounted to $2.69 in adjusted net income per share. This earnings measure is adjusted primarily for non-cash (stock-based) compensation.

The company also raised its guidance for the full year 2016. The table below shows the company's new guidance compared to prior guidance.


FY 2016 Guidance

Prior 2016 Guidance


$370-$380 million

$315-$320 million

Variable marketing margin

$129-$134 million

$108-$112 million

Adjusted EBITDA

$62-$65 million

$50-$52 million

Source: Company 8-K filing.

Non-mortgage products remain its most important revenue and earnings driver. The company disclosed that non-mortgage lending products generated $31.4 million in revenue in the fourth quarter, a remarkable 193% increase over the same period a year ago.

Now what: LendingTree is storming ahead with capital allocation plans that include continued repurchases of its stock. It disclosed that it deployed about $40 million repurchasing shares from a $50 million authorization approved on Jan. 14, 2016. Its board of directors approved another $40 million in repurchases.

LendingTree's CEO, Doug Lebda, noted that the company not only saw "year-over-year growth in every lending category, but several new offerings have proven to be significant revenue drivers." He added that "these results are proof that the LendingTree brand can be leveraged to successfully expand into new financial categories while growing our existing products."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.