What changed in this filing

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Item 1. Business

2021-03-01 compared with 2020-02-27 · 51 added, 40 removed, 171 unchanged (35% of the section changed)

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("LendingTree", the "Company", "we" or "us") operates 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.

Through multiple branded marketplaces, LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of approximately 800 partners (which we refer to as "Network Partners") in one simple search, and choose the option that best fits their financial needs.

Through multiple branded marketplaces, LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 800 partners (which we refer to as "Network Partners") in one simple search, and choose the option that best fits their financial needs.

Services include mortgage loans, mortgage refinances, home equity loans and lines of credit, reverse mortgage loans, auto loans, credit cards, deposit accounts, personal loans, student loans, small business loans, insurance quotes and other related offerings.

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In certain instances outside our mortgage and insurance business, we charge other kinds of fees, such as closed loan or closed sale fees.

In addition to our primary consumer request data referral business, we also match consumers with Network Partners via website clicks and calls for which Network Partners pay either front-end or back-end fees.

In addition to our primary consumer request data referral business, we also match consumers with Network Partners by offering consumers the ability to click from our website to a Network Partner’s website or by calls for which Network Partners pay either front-end or back-end fees.

We are continually working to improve the consumer experience.

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We believe that consumers with existing LendingTree-branded associations will be more likely to utilize our other service offerings than those of other providers whose brands consumers may not recognize.

In June 2014, we re-launched My LendingTree, a platform that offers a personalized comparison-shopping experience, by providing free credit scores and credit score analysis.

This platform enables us to observe consumers' credit profiles and then identify and alert them to loans and other offerings on our marketplace that may be more favorable than the terms they have at a given point in time.

Our My LendingTree platform offers a personalized comparison-shopping experience, by providing free credit scores and credit score analysis.

This platform enables us to monitor consumers' credit profiles and then identify and alert them to loans and other offerings on our marketplace that may be more favorable than the terms they have at a given point in time.

This is designed to provide consumers with measurable savings opportunities over their lifetimes.

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Recent Business Acquisitions

On February 28, 2020, we acquired an equity interest in Stash Financial, Inc.

Stash is a consumer investing and banking platform.

Stash brings together banking, investing, and financial services education into one seamless experience offering a full suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back® rewards program.

On January 10, 2019, we acquired Value Holding Inc., the parent company of ValuePenguin Inc.

("ValuePenguin"), a personal finance website that offers consumers objective analysis on a variety of financial topics from insurance to credit cards.

Combining ValuePenguin’s high-quality content and search engine optimization capability with proprietary technology and insurance carrier network from QuoteWizard.com, LLC ("QuoteWizard") (discussed below) enables us to provide immense value to carriers and agents.

This strategic acquisition positions us to achieve further scale in the insurance space as well as the broader financial services industry.

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(“Ovation”), a leading provider of credit services with a strong customer service reputation.

Ovation utilizes a proprietary software application that facilitates the credit repair process and is integrated directly with certain credit bureaus while educating consumers on credit improvement via ongoing outreach with Ovation case advisors.

Ovation utilizes a proprietary software application that facilitates the credit repair process and is integrated directly with certain credit reporting agencies while educating consumers on credit improvement via ongoing outreach with Ovation case advisors.

The proprietary software application offers consumers a simple, streamlined process to identify, dispute, and correct inaccuracies within their credit reports.

Ovation's experienced management team, strong credit bureau relationships and customized software platform enable us to help more consumers achieve their original financial goals through the LendingTree platform.

On September 19, 2017, we acquired certain assets of Snap Capital LLC ("SnapCap").

SnapCap is a tech-enabled online platform, which connects business owners with lenders offering small business loans, lines of credit and merchant cash advance products through a concierge-based sales approach.

SnapCap's high-touch, high-conversion sales approach with our brand and performance marketing expertise has enabled growth in our small business offering.

On June 20, 2017, we acquired the membership interests of Camino Del Avion (Delaware), LLC, which does business under the name MagnifyMoney.

MagnifyMoney is a leading consumer-facing media property that offers editorial content, expert commentary, tools and resources to help consumers compare financial products and make informed financial decisions.

The MagnifyMoney team brings the expertise and infrastructure to expand content creation and distribution across all of our consumer facing brands, improving our presence and efficacy in acquisition channels such as search engine optimization.

On June 14, 2017, we acquired substantially all of the assets of Deposits Online, LLC, which does business under the name DepositAccounts.com (“DepositAccounts”).

DepositAccounts is a leading consumer-facing media property in the depository industry and is one of the most comprehensive sources of depository deals and analysis on the Internet, covering all major deposit product categories through editorial content, programmatic rate tables and user-generated content.

This acquisition represented our first offering to address the asset side of the consumer balance sheet.

On November 16, 2016, we acquired Iron Horse Holdings, LLC, which does business under the name CompareCards.

CompareCards is a leading online source for side-by-side credit card comparison shopping.

CompareCards provides consumers with one centralized location for pertinent credit card information needed to find the best card for their needs.

CompareCards’ unique marketing platform and strong relationships with card issuers combined with LendingTree’s scale and organizational support have delivered substantial growth in our credit card business.

Ovation's experienced management team, strong credit reporting agency relationships and customized software platform enable us to help more consumers achieve their financial goals through the LendingTree platform.

These acquisitions continue our diversification strategy.

Economic Conditions

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus ("COVID-19").

The pandemic has significantly impacted the economic conditions in the U.S., as federal, state and local governments react to the public health crisis, creating significant uncertainties in the U.S.

The downstream impact of various lockdown orders and related economic pullback are affecting our business and marketplace participants to varying degrees.

We are continuously monitoring the impacts of the current economic conditions related to the COVID-19 pandemic and the effect on our business, financial condition and results of operations.

Of our three reportable segments, the Consumer segment has been most impacted as unsecured credit and the flow of capital in certain areas of the market have contracted.

The impact to our Home and Insurance segments was much less substantial and these segments recovered by the end of 2020.

While forecasting the timeline of full recovery for the Consumer segment remains challenging, the momentum of recovery has increased in each quarter subsequent to the onset of the COVID-19 pandemic.

We are encouraged by the progress made, and continue to view the Consumer segment with optimism over the medium to long term.

Most of our selling and marketing expenses are variable costs that we adjust dynamically in relation to revenue opportunities to profitably meet demand.

Thus, as our revenue was negatively impacted during the recession, our marketing expenses generally decreased in line with revenue.

Segment Reporting

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Home, Consumer and Insurance.

We changed our reportable segments in the fourth quarter of 2019, and prior period results have been reclassified to conform with this change in reportable segments.

Our Home segment includes the following products:

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Revenue within the Other category includes revenue from the resale of online advertising space to third parties and revenue from home improvement referrals.

We ceased offering home improvement referrals during the first quarter of 2019 and ceased reselling online advertising space during the first quarter of 2020.

Segment revenue is as follows (in thousands) :

For the Year Ended December 31,

2020 2019 2018

Home $ 320,992 $ 277,935 $ 319,176

Consumer 253,198 515,037 395,615

Insurance 333,765 284,792 31,369

Other 2,035 28,839 18,705

Total revenue $ 909,990 $ 1,106,603 $ 764,865

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Revenues from our Consumer products are generally derived from upfront match fees paid on delivery of a consumer request, click or call and closed loan fees.

For our credit card product, we send click traffic to issuers and are paid per card approval.

For our credit card product, we send click traffic to issuers and are generally paid per card approval.

Revenues from our Insurance products are primarily derived from upfront match fees, and upfront fees for website clicks or fees for calls, earned through the delivery of consumer requests.

For the year ended December 31, 2019 , one Network Partner, Progressive Casualty Insurance, accounted for 12% of total consolidated revenue, all of which was recorded within our Insurance segment.

For the years ended December 31, 2020 and 2019, one Network Partner, Progressive Casualty Insurance, accounted for 15% and 12%, respectively, of total consolidated revenue, all of which was recorded within our Insurance segment.

For the year ended December 31, 2018, no Network Partners accounted for more than 10% of total consolidated revenue.

For the year ended December 31, 2017 , another Network Partner, Quicken Loans, accounted for 11% of total consolidated revenue, which was recorded within our Home and Consumer segments.

We partner with lenders throughout the United States to provide full geographic lending coverage and to offer a complete suite of loan offerings on our marketplace.

To participate on our marketplace, lenders are required to enter into contracts with us that state the terms and conditions for such participation, although these contracts generally may be terminated for convenience by either party.

We perform certain due diligence procedures on prospective new lenders, including screening against a national anti-fraud database maintained by the Mortgage Asset Research Institute, which helps manage our risk exposure.

We perform certain due diligence procedures on prospective new lenders, including screening

against a national anti-fraud database maintained by the Mortgage Asset Research Institute, which helps manage our risk exposure.

The data is utilized to determine whether a lender and its principals are eligible to participate on our marketplace and have not been convicted of and/or penalized for fraudulent activity.

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We also offer consumers other mortgage products such as:

An alternative "short-form" matching process, which provides them with lender contact information rather than conditional offers from Network Partners.

A "rate table" loan marketplace, where consumers can enter their loan and credit profile and dynamically view real-time rates from lenders without entering their contact information.

• An alternative matching process, which provides them with lender contact information rather than conditional offers from Network Partners.

• A "rate table" loan marketplace, where consumers can enter their loan and credit profile and dynamically view real-time rates or other relevant information from lenders without entering their contact information.

Other Home lending products on our online marketplace include the following:

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• Credit cards, which include offerings from most major card issuers.

During the fourth quarter of 2016, we purchased CompareCards, a leader in the online credit card comparison industry, enhancing this product.

• Personal loans, which are unsecured obligations generally carrying shorter terms and smaller loan amounts than home mortgages.

• Small business loans, which include a broad array of financing types, including but not limited to loans secured by working capital, equipment, real estate and other forms of financing, provided to small and medium-sized businesses.

During the third quarter of 2017, we purchased SnapCap, an online platform with a concierge-based approach to connecting business owners with sources of credit, enhancing this product.

• Student loans, which includes both new loans to finance an education and related expenses, as well as refinancing of existing loans.

During the second quarter of 2016, we purchased SimpleTuition, a leading online marketing platform for student loans, and during the third quarter of 2018, we purchased Student Loan Hero, a personal finance website dedicated to helping student loan borrowers manage their student debt, enhancing this product.

During the third quarter of 2018, we purchased Student Loan Hero, a personal finance website dedicated to helping student loan borrowers manage their student debt, enhancing this product.

Non-lending Consumer products also includes information, tools and access to the following:

• Deposit accounts, through which consumers can access depository deals and analysis covering all major deposit product categories.

On June 14, 2017, we acquired DepositAccounts.com, a leading consumer-facing media property in the depository industry and is one of the most comprehensive sources of depository deals and analysis on the Internet, covering all major deposit product categories through editorial content, programmatic rate tables and user-generated content.

• Credit repair, through which consumers can obtain assistance improving their credit profiles, in order to expand and improve loan and other financial product opportunities available to them.

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Insurance Segment

Our Insurance segment includes information, tools and access to insurance quote products, including home and automobile, through which consumers are matched with insurance lead aggregators to obtain insurance offers.

Our Insurance segment includes information, tools and access to insurance quote products, including automobile, home, health and Medicare, through which consumers are matched with insurance lead aggregators to obtain insurance offers.

We enhanced our insurance products by acquiring QuoteWizard, one of the largest insurance comparison marketplaces in the growing online insurance advertising market, in the fourth quarter of 2018.

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Other products not included in the Home, Consumer and Insurance segments includes:

Home improvement services, through which consumers have the opportunity to research and find home improvement professional services.

• Home improvement services, through which consumers had the opportunity to research and find home improvement professional services.

Effective in the first quarter of 2019, we no longer offer home improvement services.

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Home sales (and purchase mortgages) typically rise during the spring and summer months and decline during the fall and winter months, while refinancing and home equity activity is principally driven by mortgage interest rates as well as real estate values.

However, in certain historical periods additional factors affecting the mortgage and real estate markets, such as the 2008-2009 financial crisis and related recession have impacted customary seasonal trends.

However, in certain historical periods additional factors affecting the mortgage and real estate markets, such as the 2008-2009 financial crisis and related recession as well as the economic conditions related to the COVID-19 pandemic, have impacted customary seasonal trends.

We anticipate revenue in our newer products, primarily within the Consumer segment, to be cyclical as well;

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LendingTree, Inc.

is currently the parent of LendingTree, LLC and several companies owned by LendingTree, LLC.

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 were originally incorporated in the state of Delaware in June 1996 and commenced nationwide operations in July 1998.

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As a result, we are subject to a variety of federal and state laws and regulations, including:

The Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Housing Act, the Real Estate Settlement Procedures Act (“RESPA”), and similar state laws, all of which place certain restrictions on the manner in which consumer loans are marketed and originated, and some of which impose restrictions on the amount and nature of fees that may be charged to lenders and real estate professionals for providing or obtaining consumer loan requests;

• The Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, Fair and Accurate Credit Transactions Act of 2003 ("FACTA"), the Fair Housing Act, the Real Estate Settlement Procedures Act (“RESPA”), and similar state laws, all of which place certain restrictions on the manner in which consumer loans are marketed and originated, and some of which impose restrictions on the amount and nature of fees that may be charged to lenders and real estate professionals for providing or obtaining consumer loan requests;

• The Dodd-Frank Wall Street Reform and Consumer Protection Act, which imposes, among other things, limitations on fees charged by mortgage lenders, and requirements related to mortgage disclosures;

Federal and State licensing laws such as the Secure and Fair Enforcement of Mortgage Licensing Act of 2008 (the "SAFE Act");

Federal and state laws, which impose restrictions on activities conducted through telephone, mail, email, mobile device or the Internet, including the Telemarketing Sales Rule ("TSR"), the Telephone Consumer Protection Act ("TCPA"), the CAN-SPAM Act and the Federal Trade Commission Act;

• Federal and State licensing laws;

• Federal and state laws, which impose restrictions on activities conducted through telephone, mail, email, mobile device or the Internet, including the Telemarketing Sales Rule ("TSR"), the Telephone Consumer Protection Act ("TCPA"), the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM") and the Federal Trade Commission Act;

• Federal and state laws relating to offering of credit repair services to consumers, including such laws that impose restrictions on the usage and storage of consumer credit information such as the Credit Repair Organizations Act ("CROA") and the Fair Credit Reporting Act;

Federal and state laws and regulations relating to data privacy and security, such as the California Consumer Privacy Act ("CCPA"), which impact how we collect, use, store, share and otherwise process personal information of consumers and other individuals.

• Federal and state laws and regulations relating to data privacy and security, such as the Gramm-Leach-Bliley Act (“GLBA”) and the California Consumer Privacy Act ("CCPA"), which impact how we collect, use, store, share and otherwise process personal information of consumers and other individuals.

Intellectual Property

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In addition, we reserve and register domain names when and where we deem appropriate.

As of December 31, 2019, we own over 1,500 registered domain names.

As of December 31, 2020, we own approximately 1,600 registered domain names.

We also have agreements with third parties that provide for the licensing of patented, copyrighted and other proprietary technology used in our business.

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See "Risk Factors" for a more comprehensive description of risks related to our intellectual property.

Human Capital Resources

We are committed to investing in our employees, and nurturing an entrepreneurial and dynamic work environment.

We achieve this through dedication to our core principles which include:

building truly outstanding products, being open and candid, acting with urgency and creativity, taking charge, setting goals and being accountable, and committing to excellence.

Employees are stockholders of the Company, allowing them to take charge and have a direct impact on company choices.

We provide individual, career and leadership development opportunities to strengthen skills.

We have implemented strong policies and practices to foster a safe and inclusive workplace allowing employees to develop and reach their full potential, and although our employees hold many values in common, our leadership team actively works to attract, develop, and retain talent from a range of backgrounds and experiences in order to benefit from diverse perspectives.

The Company and our employees are committed to helping our communities thrive through a variety of Company-sponsored annual and ongoing community outreach efforts.

As of December 31, 2020, we had 1,303 employees, of which approximately 1,289 are full-time and 14 are temporary or part-time.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business