LendingTree (TREE) Q1 2026 Earnings Transcript

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DATE

Thursday, April 30, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Scott Peyree
• Chief Financial Officer — Jason Bengel
• Director of Investor Relations — Andrew Wessel

TAKEAWAYS

• Revenue -- Increased 37%, reaching a record quarterly level, primarily driven by exceptional insurance performance and solid consumer demand.
• Adjusted EBITDA -- Grew 71%, representing the company's highest level in several years.
• Net Leverage -- Declined to 2.1 times from 3.4 times, reflecting strengthened financial position.
• Credit Rating -- S&P upgraded the company to B+ with a stable outlook.
• Insurance Segment Revenue and Profit -- Achieved new records, with insurance declared "now the largest marketplace for consumers" across auto, home, and health products.
• Insurance Marketplace Dynamics -- Growing carrier demand, including budget increases and re-engagements, resulted in further network expansion.
• Insurance Variable Marketing Dollars (VMD) -- Set a new quarterly record, surpassing the previous $48 million by approximately $10 million (about 20%).
• Health Insurance Growth -- Saw a significant increase in consumer volume attributed to the end of COVID-era health insurance subsidies in the first quarter.
• Consumer Segment Revenue -- Rose 49%, with small business lending as the leading contributor.
• Consumer Segment Demand Trends -- Noted a drop in personal loan and small business loan demand beginning late in the quarter, tied to "elevated refunds," lower consumer sentiment, and higher gas prices.
• Small Business Lending Conditions -- "Credit is still available, but [lenders] are typically offering lower loan amounts at higher interest rates."
• Updated Guidance -- Management described their guidance as "very, very muted seasonality" and "conservative," assuming possible further credit tightening.
• Home Segment Performance -- Revenue and profit remain depressed due to high mortgage rates, but "dedicated marketing investment" is expected to drive improvement in the next quarter.
• Homepage Redesign -- Launched three weeks prior, the homepage produced "pleasantly surprising" conversion improvements, with plans underway to update additional product pages.
• Organic Traffic Economics -- Management said, "Every five-point increase in organic revenue mix represents about $40 million of incremental segment profit and roughly 400 basis points of uplift in our variable marketing margin."
• Artificial Intelligence (AI) Initiatives -- Multiple AI deployments were rolled out, including an internal agent for search marketing and voice tools in call centers, targeting conversion and cost efficiency.
• Three-Year Adjusted EBITDA Growth Rate -- Management reported a compound annual growth rate of 26% at the midpoint of the updated 2026 outlook.

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RISKS

• Consumer Demand Decline -- Management observed a notable drop in consumer and small business loan demand, attributing it to "consumer sentiment at all-time lows," high gas prices, and temporary factors like elevated tax refunds.
• Small Business Loan Sizing and Appetite -- Lenders offered "lower loan amounts at higher interest rates" while merchants showed diminished loan appetite, producing "a decrease in close rate" and lower revenue per lead.
• Muted Outlook in Consumer -- The guide incorporates "very, very muted seasonality" and anticipates the "possibility of further credit tightening," highlighting uncertainty in consumer segment recovery.
• Home Segment Pressure -- Persistently high mortgage rates keep the home segment at cyclical revenue and profit lows, with competitive marketing conditions pushing the company to prioritize traffic quality over margin protection.

SUMMARY

LendingTree (NASDAQ:TREE) delivered record quarterly revenue and adjusted EBITDA growth, propelled by new highs in insurance segment profitability and robust expansion in the consumer segment. Net leverage improved significantly, reinforcing the company's balance sheet, while S&P recognized the operational gains with a ratings upgrade. Management emphasized its diversified model with record insurance marketplace activity and projected ongoing growth from organic traffic and AI-driven operational enhancements. Strategic investments in digital experience, particularly a new homepage and AI integration, are expected to further enable unit economics and long-term growth potential.

• Management reported enhanced pricing power and increasing demand diversity from insurance carriers, offsetting softer conditions in home and consumer lending verticals.
• Segment dynamics remain mixed, as home and select consumer markets face persistent macroeconomic headwinds, whereas insurance continues to benefit from industry stabilization and secular adoption of digital platforms.
• The company detailed specific AI deployments, underscoring automation and personalized engagement as incremental levers for efficiency and competitive positioning across marketing and sales functions.
• Organic channel mix growth is highlighted as a material profit driver, with clear disclosed uplift potential linked to strategic focus areas.

INDUSTRY GLOSSARY

• VMD (Variable Marketing Dollars): Insurance segment metric referencing the flexible marketing investment spend captured through transactions, important for understanding sales efficiency and market depth on the platform.

Full Conference Call Transcript

Andrew Wessel: Thank you, Kelly, and hello to everyone joining us on the call to discuss our first quarter 2026 financial results. With us today are Scott Peyree, our President and CEO, and Jason Bengel, our CFO. This afternoon, we posted a detailed letter to shareholders on our Investor Relations website. We have also posted a new investor presentation that we would encourage everyone to look at on our website. For the purposes of today's discussion, we will assume that listeners have gone through those materials and will focus on Q&A. Before I hand over the call to Scott for his remarks, I will remind everyone that during this call, we may discuss LendingTree, Inc.'s expectations for future performance.

Any forward-looking statements that we make are subject to risks and uncertainties, and actual results could differ materially from the views expressed today. Many, but not all, of the risks we face are described in our periodic reports filed with the SEC. We will also discuss a variety of non-GAAP measures on the call, and I refer you to today's press release and shareholder letter, both available on our website, for comparable GAAP definitions and full reconciliations of non-GAAP measures to GAAP. And with that, Scott, please go ahead.

Scott Peyree: Thanks, Andrew, and I appreciate everyone joining us on the call today. I am going to start with some highlights from our first quarter results and then spend a few minutes on how we are executing on our strategy before opening up the line for questions. We have posted an updated presentation on our Investor Relations site that goes deeper on some of the remarks I have today. We had an exceptional start to the year. Adjusted EBITDA grew 71% year over year on a 37% increase in revenue, driven by a very strong performance in our insurance segment and a healthy contribution from consumer.

We had a record revenue quarter, and it was the highest quarterly adjusted EBITDA we have had in years. Just as importantly, we continue to strengthen our financial position. Net leverage declined to 2.1 times from 3.4 times a year ago, and we are pleased to receive a credit upgrade from S&P to B+ with a stable outlook. Stepping back, what these results reinforce is the strength of our model. We operate a high-margin, asset-light marketplace with a scalable cost structure, and we are demonstrating meaningful operating leverage as we grow. That combination—strong growth and expanding margin—is core to our investment proposition. Turning to our segments, insurance continues to lead the way.

Revenue and segment profit both achieved new records in the quarter, growing [inaudible], respectively, year over year. We are now the largest marketplace for consumers to shop for their insurance needs, be that auto, home, health, or other products. Our scale with our largest carriers, combined with growing demand from midsize insurers competing for market share, provides our network with unparalleled depth and breadth. That translates into better outcomes for consumers and optimizes our monetization. Looking ahead, we expect price decreases in auto insurance across select states to further stimulate shopping activity and competition amongst carriers, which should support continued momentum.

It is becoming clearer and clearer that the P&C industry has entered into a period of strong health and stability. In consumer, we delivered another quarter of healthy growth led by small business lending; revenue increased 49% year over year. As the quarter progressed, we did begin to see some softening in consumer demand for loans. We believe this is tied to broader macro dynamics, including elevated refunds earlier in the year and, more recently, a decline in consumer sentiment, which reached historically low levels in April. We are seeing similar patterns from small business borrowers as well. We are mindful of these near-term headwinds, but we remain confident in the long-term growth opportunity in consumer.

As broader macro uncertainty begins to normalize, we expect demand to recover and credit supply to be ample. In the meantime, we continue to invest in our small business concierge capabilities, which remain a key differentiator in driving conversion and customer satisfaction. Home remains pressured by elevated mortgage rates. We continue to believe that the current level of revenue and profit are cyclical lows, and we have meaningful upside as rates normalize and transaction volumes recover. After making a dedicated marketing investment during the first quarter, we expect revenue growth will continue and margins should expand in Q2. Unlike most of our competitors that over-index to specific verticals, we lead with our diverse platform.

Each of our operating segments has unique macroeconomic drivers. Insurance cycles tend to be uncorrelated with changes in interest rates and benefit from a long-term secular shift toward digital acquisition. Our consumer segment is most closely tied to credit availability, while home is most highly tied to rates and interest rates in terms of the mortgage cycles. This diversification enables us to navigate varying market and economic cycles while still offering a clear path to growth. At the midpoint of our updated 2026 outlook, adjusted EBITDA is running at a three-year compound annual growth rate of 26%. We believe this growth profile, combined with our advantaged margin structure and capital efficiency, are uniquely valuable components of our business model.

Now I would like to provide an update on execution against our strategy. As a reminder, our North Star is to be the number one destination to shop for financial products. Everything we do is anchored in that objective, which is focused on four pillars: accelerating the core business, improving the consumer experience, expanding our product offerings, and rebuilding our brand. At the heart of this strategy is a simple idea. If we deliver a better experience and build stronger brand awareness, we increase organic traffic, improve conversion, and drive better unit economics across the platform. On the consumer side, a compelling brand promise brings users into our ecosystem.

We deliver an easy and memorable experience that helps them accomplish what they came to do, which improves satisfaction, repeat usage, and referrals. That increases lifetime value while reducing customer acquisition costs. On the partner side, more high-intent traffic leads to more monetization opportunities. As partners see better outcomes, they deepen integrations, increase spend, and compete more aggressively within our marketplace, which further improves pricing and selection for our consumers. One of the clearest opportunities that we see is shifting more of our traffic mix toward organic channels. Every five-point increase in organic revenue mix represents about $40 million of incremental segment profit and roughly 400 basis points of uplift in our variable marketing margin.

This is the economic opportunity we are actively investing into through improvements in consumer experience that drive repeat visits and brand initiatives that increase unaided awareness. AI is a critical enabler across all of these efforts. We understand investor focus on AI and its potential impact to our business. Our view is very clear: AI is a tailwind, not a disruptor. AI is changing how consumers discover information, but it is not changing how financial products are ultimately purchased. These are complex, highly regulated transactions that require trust, compliance, identity verification, and deep integration with providers. In that context, marketplaces like ours become even more important. AI can guide consumers; it cannot complete the transaction.

It cannot underwrite a loan, bind an insurance policy, or securely handle sensitive financial data across multiple providers. That is where our platform plays a critical role. We are leaning into this shift. We are using AI to improve every stage of the consumer journey, from personalized engagement and financial guidance to smarter matching and more efficient application handoff. At the same time, we are deploying AI internally to drive efficiency across marketing, sales, and operations. During the quarter, we launched an internally developed AI agent for our search marketing teams that provides real-time optimization insights. Based on early success, we are expanding this capability across additional channels and into our sales organization.

We are also continuing to see strong results from AI-powered voice tools in our call centers and are extending those capabilities into outbound and SMS engagement as well. Taken together, these initiatives are improving conversion, reducing costs, and reinforcing our role as the transaction layer in the financial ecosystem. To wrap up, we believe our investment proposition is compelling. We are a high-margin, asset-light marketplace with proven operating leverage. We have multiple growth engines with embedded upside across insurance, consumer, and home. We have a strengthened balance sheet that provides flexibility and resilience. And we are leveraging AI to enhance our platform.

We are encouraged by our strong results to start the year and remain confident in both our strategy and our ability to execute. While we are mindful of near-term macro headwinds, we believe we are well positioned to deliver durable growth and increased profitability over time. With that, I will pause here and open the line for questions.

Operator: Thank you. At this time, we will conduct the 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. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ryan Tomasello from KBW. Your line is now open.

Ryan Tomasello: Hi, everyone. Congrats on the strong start to the year. I guess just to maybe start on the slowdown that you are highlighting in consumer loan demand—not all that surprising given the geopolitical backdrop—but I just wanted to put a finer point around that. Is it also being accompanied by tightening credit boxes at your partners? And is there any way to quantify the impact that you are baking into the guidance incorporating this new backdrop? Thank you.

Scott Peyree: Yes, I mean, maybe I will have Jason talk to the exact quantifying, which is kind of hard during these wild geopolitical times we are in right now. But I would say, just on the credit availability side, we have not seen as much impact on credit availability, especially, for example, in the personal loan business. It has more been around consumer shopping behavior. With consumer sentiment at all-time lows, gas prices at all-time highs, and a bunch of consumers getting tax refunds in the February–March time frame, we just saw demand drop off for personal loans for many of those reasons.

We have seen it start to increase again in April, which is good, but it is still below what we would expect seasonal shopping behavior to be in Q2 at this point in time. But it is definitely off of the March lows. When the war started in March and gas prices went way up, that was a shock to the system in that month specifically. Now, on the small business lending side, I would say we are seeing a little bit of both—fewer small merchants looking for loans and smaller loan sizes than normal. On the lender side, credit is still available, but they are typically offering lower loan amounts at higher interest rates.

When you have a cautious merchant to begin with, and then they are not getting the exact loan they want and at a higher interest rate, the sense we are getting is they are just not as urgently looking for money right now because of macro geopolitical stuff that is going on. I still think this is a short-term thing that will go away. Once consumer sentiment comes back up and, hopefully, things settle down geopolitically, I think we will be right back off to the races.

Jason Bengel: Just with respect to the guide, like Scott said, January and February were very strong, but then March and April, we did see headwinds. With SMB, like Scott said, we did see a decline in appetite from both merchants and lenders. That resulted in a decrease in close rate, which has the effect of decreasing our RPLs. So coming out of Q1, we did see a downward trend. Normally, what we expect to see is Q2 and Q3 as the strongest in consumer—that is typical seasonality—but where consumer sentiment is now, at record lows, and with elevated gas prices, what we are assuming in the guide is conservative.

We are assuming very, very muted seasonality, with the possibility of further credit tightening out there. We are being very conservative. We are not hearing anything from our partners that would indicate tightening, but we are assuming much more muted seasonality than we otherwise would.

Ryan Tomasello: Great, thanks for all that color. And then, turning to insurance, can you elaborate on what you are seeing for run-rate trends there and your expectations for the balance of the year? In particular, last quarter you called out some nice stats around the diversification of the carrier spend on the platform and the growth you were seeing from the partners on the marketplace. Any updated stats there would be helpful. Thanks.

Jason Bengel: Yes, we had great performance in Q1. Our prior record in Q4 was $48 million of VMD. You can see we beat that by a large margin—up about $10 million, or roughly 20%. We did see that normalize a bit coming out of Q1, which we expected. But going forward, we still expect to be materially ahead of that prior record. This really goes to the benefit of having a diversified product portfolio. Where we are seeing some headwinds in consumer that we hope will abate, insurance’s backdrop is still very strong. Insurance carrier profitability is very high, and competition seems to be increasing at a rapid pace.

So Q1 will normalize a bit, but we still expect very strong levels.

Scott Peyree: And just to add, carrier demand remains extremely strong. Even toward the end of the quarter heading into Q2, a carrier that had not worked with us in a long time came back on the network spending a decent amount of money. Another carrier that historically spends a small amount increased their budget pretty dramatically. Another carrier that typically just buys one of our products—lead, click, or call—expanded and started buying another product to access a higher overall quantity of our consumers. It is a very healthy, competitive marketplace in insurance right now, which improves consumer choice and helps drive further shopping.

Another thing I would throw in is that health insurance was a very pleasant surprise for us in Q1. We attribute a lot of that to COVID-era health insurance subsidies coming to an end in Q1, which drove a surprising number of consumers to shop for health insurance through our network. Heading in, as Jason said, we dramatically outperformed our forecast and expectations for Q1. Q2 we are not expecting to be at those same levels, and some of that is typical seasonality—consumer shopping behavior for insurance products comes down a bit in Q2. Big picture, it is a very healthy marketplace, and we continue to expect insurance to grow year over year for the indefinite future.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Mike Grondahl from Northland Capital Markets. Your line is now open.

Analyst: Hey, guys. This is Owen on for Mike. In the home segment, you mentioned investing more aggressively in higher-quality traffic despite elevated mortgage rates and competitive marketing conditions. How should we think about the balance between protecting margins versus investing through this weaker housing backdrop? And then lastly for me, the homepage redesign results you disclosed were pretty impressive. How early are these results, and where do you still see the biggest opportunities to improve funnel conversion and personalization across the marketplace?

Scott Peyree: Yes, this really speaks to the advantage of having a diversified product set. Consumer demand for home loan products is at historically low levels for obvious reasons—interest rates are a lot higher than they were a few years ago—so everyone in the industry is fighting over a smaller number of consumers shopping. The advantage of us being diversified into insurance and consumer lending, which are doing very well, means we can invest and fight extra hard for that high-quality traffic. Bottom line, we are continuing to grow our lender network.

One of our strategic focuses is to really grow our small and medium-sized brokers in the mortgage world, and that means being able to deliver as much high-quality consumer volume as we can. They are out there, and we tested into a few areas that now give us a clear idea heading into Q2 and beyond about what it is going to take to win in those areas. Long term, some of them are sustainable—that is why you are seeing revenue continue to go up with margins going up—and for some we had to step back. But we now have a lot of knowledge on what it will take to grow.

We need to be prepared with a big distribution and client network when the mortgage industry turns around, so we can have revenue grow rapidly. On the homepage, we are extremely excited. The new homepage launched not even a month ago—about three weeks—and it was important for us, as part of the brand rebuild process, to redo the homepage and our messaging, moving away from an SEO/lead-gen-oriented homepage to a true branded homepage with our value proposition and useful information and data for consumers. We were not necessarily expecting metrics to increase when we rolled it out, but we were pleasantly surprised by the improvement in performance, and that is sustaining.

Now, after the homepage, we are revamping all of our specific product pages. In our research in the LLM world, this is a better approach that will help us win organic traffic long term and create a stickier consumer experience—delivering valuable information versus immediately pushing through a funnel. We are very excited with how well that has performed, and as we look to proactively do some brand advertising in the second half of the year, it is exciting to see how this messaging on the homepage has landed so well with consumers.

Operator: Thank you. I am seeing no further questions at this time. I would like to turn it back to Scott Peyree for closing remarks.

Scott Peyree: Alright. That was pretty short and sweet. Thank you, everyone, for joining. Just to reiterate, we are very excited about the results of the first quarter and all the strategic areas we are focusing on, and how that is going to help this company continue to grow at a high rate over the next few years. With that, have a good day, everyone.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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