What changed in this filing

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Item 1. Business

2024-02-29 compared with 2023-02-28 · 33 added, 57 removed, 157 unchanged (36% 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 over 600 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 approximately 500 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, auto loans, credit cards, deposit accounts, personal loans, student loans, small business loans, insurance quotes, sales of insurance policies and other related offerings.

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Additionally, we work with our Network Partners, including providing training and other resources, to improve the consumer experience throughout the process.

Further, we have been building and improving our MyLendingTree platform, which provides a relationship-based consumer experience, rather than just a transaction-based experience.

Further, we have been building and improving our Spring platform (previously MyLendingTree), which provides a relationship-based consumer experience, rather than just a transaction-based experience.

Evolution and Future Growth of Our Business

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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.

Our MyLendingTree 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 lifetime.

Our Spring platform (previously called MyLendingTree) offers a personalized comparison-shopping experience, financial health advice and credit simulations by providing free access to credit scores and credit score analysis.

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

Customers can track the progress of their financial health over time based on actions they have taken, and see recommended credit score improvement actions, loans or other products offered by LendingTree.

By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of revenue.

We intend to capitalize on our expertise in performance marketing, product development and technology by leveraging the widespread recognition of the LendingTree brand.

We believe the consumer and small business financial services industry is still in the early stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established.

We believe the consumer and small business financial services industry is in the middle stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established.

We believe that, like retail and travel, financial services consumers will continue to move towards online shopping and transactions in response to which suppliers will increasingly shift their product offerings and advertising budgets toward the online channel.

We believe the strength of our brands and of our Network Partners places us in a strong position to continue to benefit from this market shift.

Recent Business Acquisitions & Investments

In January 2022, we acquired an equity interest in EarnUp Inc.

EarnUp is a consumer-first payment platform that intelligently automates loan payment scheduling and helps consumers better manage their money and improve their financial well-being.

In February 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 investment retirement accounts (“IRAs”), custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back® rewards program.

These investments 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 significantly impacted the economic conditions in the U.S., as federal, state and local governments reacted to the public health crisis, creating significant uncertainties in the U.S.

The downstream impact of various lockdown orders and related economic pullback affected 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, our Consumer segment was impacted the most as unsecured credit and the flow of capital in certain areas of the market contracted.

The impact to our Home and Insurance segments was much less substantial.

We believe our three reportable segments have generally recovered from the impacts of the pandemic.

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.

During 2022, the challenging interest rate environment and persistent inflationary pressures have presented additional challenges for many of our mortgage lending and insurance partners.

We have seen the most significant impact in our Home segment as mortgage rates have nearly doubled in 2022, causing a sharp decline in refinance volumes and more recent pressure on purchase activity.

Although our Insurance segment continues to rebound from the trough in the fourth quarter of 2021, the recovery has been slower than expected as demand from our carrier partners remains volatile as premium increases continue to chase inflation.

We continue to monitor the current global economic environment, specifically inflationary pressures and interest rates, and any resulting impacts on our financial position and results of operations.

During 2022, the challenging interest rate environment and persistent inflationary pressures presented challenges for many of our mortgage lending and insurance partners.

We saw the most significant impact in our Home segment as mortgage rates nearly doubled in 2022, causing a sharp decline in refinance volumes and pressure on purchase activity.

Although our Insurance segment rebounded from the trough in the fourth quarter of 2021, the recovery was slower than expected as demand from our carrier partners remained volatile as they continued to attempt to implement premium increases to offset the effect of inflation on claims.

In addition, the auto and home insurance industry was impacted in 2022 by persistent industry headwinds, supply chain issues, rising accident severity and frequency, and hurricane losses.

During 2023, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending and insurance partners.

In our Home segment, mortgage rates hit multi-decade highs of nearly 8% in October, then proceeded to drop below 7% by December, ending the year at 6.6%.

The continued high mortgage rates in 2023 and home affordability issues continued to cause declines in refinance volumes and purchase activity.

In our Insurance segment, demand from our carrier partners remained volatile for much of the year as they continued to deal with persistent industry headwinds.

In the last months of 2023, we began to see advertising budgets from our carrier partners increase and we are optimistic about the prospect for continued increases into 2024.

Segment Reporting

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Our Home segment includes the following products:

purchase mortgage, refinance mortgage, home equity loans and lines of credit, and real estate.

purchase mortgage, refinance mortgage, and home equity loans and lines of credit.

Our Consumer segment includes the following products:

credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products such as credit repair and debt settlement.

credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products such as debt settlement.

We ceased offering reverse mortgage loans on our marketplace in the fourth quarter of 2022.

We ceased offering credit repair products at the end of the second quarter of 2023 when we shut-down our Ovation business.

Our Insurance segment consists of insurance quote products and insurance policies in our agency businesses.

Revenue within the “other” category below includes revenue from the resale of online advertising space to third parties.

We ceased reselling online advertising space during the first quarter of 2020.

Segment revenue is as follows (in thousands) :

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Total revenue $ 672,502 $ 984,992 $ 1,098,499

LendingTree does not charge consumers for the use of our services, except for credit repair services.

LendingTree does not charge consumers for the use of our services.

Revenues from our Home products are mostly derived from upfront match fees paid by Network Partners that receive a consumer request, and in some cases upfront fees for clicks or call transfers.

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For the years ended December 31, 2023, 2022 and 2021 no Network Partners accounted for more than 10% of total consolidated revenue.

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

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.

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Consumers complete a single request form with information regarding the type of mortgage loan product they are seeking, loan preferences and other data.

Consumers also consent to a soft inquiry regarding their credit.

Consumers also consent to a soft inquiry regarding their credit and to have lenders contact them.

(2) Consumer Request Form Matching and Transmission.

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All matched Network Partners and any conditional offers are presented to the consumer upon completion of the consumer request form.

Consumers can return to the site and view their offer(s) at any time by logging in to their MyLendingTree profile.

Consumers can return to the site and view their offer(s) at any time by logging in to their Spring profile.

Additionally, matched lenders and offers are also sent to the email address associated with the consumer request.

We also offer consumers other mortgage products such as:

• 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.

We also offer matches to providers of other Home lending products on our online marketplace include the following:

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We ceased offering matches to providers of reverse mortgage loans in the fourth quarter of 2022.

In addition, we offer real estate brokerage services, through which consumers are matched with local realtors who can assist them in their home purchase or sale efforts.

We generate revenue from real estate brokerage services through match fees paid to us by real estate brokers participating in our online marketplace.

Consumer Segment

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• 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.

Our Ovation business is a leading provider of credit services with a strong customer service reputation.

We ceased offering credit repair products at the end of the second quarter of 2023 when we shut-down our Ovation business.

• Debt relief services, through which consumers can obtain assistance negotiating existing loans.

We refer to the various purchasers of leads from our other marketplaces as lead purchasers.

We generate revenue from the deposit account product from a consumer clicking from our website through to a financial institution's website.

We generate revenue from credit repair and debt relief services through subscription fees from consumers that enroll in our credit repair product, or a fee for a customer referral to a service provider partner or through a fee at the time a consumer enrolls in a program with one of our Network Partners.

We generate revenue from the deposit account product when a consumer clicks from our website through to a financial institution's website.

We generate revenue from debt relief services through a fee for a customer referral to a service provider partner or through a fee at the time a consumer enrolls in a program with one of our Network Partners.

Insurance Segment

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, as well as insurance policies in our agency businesses.

Our QuoteWizard business is one of the largest insurance comparison

marketplaces in the growing online insurance advertising market.

Our QuoteWizard business is one of the largest insurance comparison marketplaces in the growing online insurance advertising market.

ValuePenguin, a personal finance website that offers consumers objective analysis on a variety of financial topics from insurance to credit cards, is also part of our Insurance segment.

Other Products

Other products not included in the Home, Consumer and Insurance segments included revenue earned through resale of online advertising space to third parties is also classified in other products.

Effective in the first quarter of 2020, we no longer resell online advertising space.

We intend to continue adding new offerings for consumers, small businesses and Network Partners on our online marketplace, in order to grow and diversify our sources of revenue.

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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 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;

however, we have limited historical data to predict the nature and magnitude of this cyclicality.

Based on industry data, we anticipate that as our personal loan product matures we will experience less consumer demand during the fourth and first quarters of each year.

However, in certain historical periods additional factors affecting the mortgage and real estate markets, such as the current high interest rate economic period, 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.

Our personal loan product experiences less consumer demand during the fourth and first quarters of each year.

We also anticipate less consumer demand for credit cards in the fourth quarter of each year, and we anticipate higher consumer demand for deposit accounts in the first quarter of each year.

The majority of consumer demand for in-school student loan products occurs in the third quarter coinciding with collegiate enrollment in late summer.

Other factors affecting our businesses include macro factors such as credit availability in the market, interest rates, the strength of the economy and employment.

Other factors affecting our businesses include macro factors such as credit availability in the market, interest rates, inflation, the strength of the economy and employment.

Our businesses compete with other online marketing companies, including online intermediaries that operate network-type arrangements.

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• 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, including the Gramm-Leach-Bliley Act (“GLBA”), which may impact how we collect, use, store, share and otherwise process personal information of consumers and other individuals.

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As of December 31, 2023, we owned one (1) issued U.S.

patent related to the system and method for collecting financial information over a global communications network, which expires in 2032.

We also own one provisional U.S.

patent related to systems and methods for optimizing software development and testing which expires in January 2024, at which time a non-provisional patent application will be filed.

patent related to the system and method for collecting financial information over a global communications network, that expires in 2032.

We also owned one (1)

provisional U.S.

patent related to systems and methods for optimizing software development and testing that expired on January 30, 2024.

Many of our services are offered under proprietary trademarks and service marks.

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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.

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.

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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