What changed in this filing

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Item 1. Financial Statements

2024-11-04 compared with 2024-07-29 · 187 added, 146 removed, 556 unchanged (37% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2024 December 31,

43 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

Amortization of intangibles 1,466 1,981 4,422 6,012

Goodwill impairment — 38,600 — 38,600

Restructuring and severance 273 1,955 498 9,967

4 unchanged sentences

Interest (expense) income, net ( 10,060 ) ( 7,097 ) ( 17,899 ) 10,992

Other income 1,052 439 2,086 2,273

Income before income taxes 9,438 112 11,013 13,964

Income tax expense ( 1,686 ) ( 227 ) ( 2,245 ) ( 622 )

Net income (loss) and comprehensive income (loss) $ 7,752 $ ( 115 ) $ 8,768 $ 13,342

Other expense ( 57,391 ) ( 110,910 ) ( 55,305 ) ( 108,637 )

Loss before income taxes ( 57,531 ) ( 151,999 ) ( 46,518 ) ( 138,035 )

Income tax (expense) benefit ( 447 ) 3,534 ( 2,692 ) 2,912

Net loss and comprehensive loss $ ( 57,978 ) $ ( 148,465 ) $ ( 49,210 ) $ ( 135,123 )

Weighted average shares outstanding:

1 unchanged sentence

Diluted 13,349 12,993 13,236 12,919

Net income (loss) per share:

Net loss per share:

Basic $ ( 4.34 ) $ ( 11.43 ) $ ( 3.72 ) $ ( 10.46 )

15 unchanged sentences

Balance as of March 31, 2024 $ 131,515 16,577 $ 166 $ 1,234,214 $ ( 836,687 ) 3,355 $ ( 266,178 )

Net loss and comprehensive loss 7,752 — — — 7,752 — —

Net income and comprehensive income 7,752 — — — 7,752 — —

Non-cash compensation 7,437 — — 7,437 — — —

1 unchanged sentence

Balance as of June 30, 2024 $ 145,820 $ 16,695 $ 167 $ 1,240,766 $ ( 828,935 ) 3,355 $ ( 266,178 )

Net loss and comprehensive loss ( 57,978 ) — — — ( 57,978 ) — —

Non-cash compensation 6,859 — — 6,859 — — —

Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes and cancellations ( 445 ) 21 — ( 445 ) — — —

Balance as of September 30, 2024 $ 94,256 16,716 $ 167 $ 1,247,180 $ ( 886,913 ) 3,355 $ ( 266,178 )

Common Stock Treasury Stock

5 unchanged sentences

Balance as of December 31, 2022 $ 207,940 16,167 $ 162 $ 1,189,255 $ ( 715,299 ) 3,355 $ ( 266,178 )

Net loss and comprehensive loss 13,457 — — — 13,457 — —

Net income and comprehensive income 13,457 — — — 13,457 — —

Non-cash compensation 11,274 — — 11,274 — — —

6 unchanged sentences

Balance as of June 30, 2023 $ 241,715 16,324 $ 163 $ 1,209,687 $ ( 701,957 ) 3,355 $ ( 266,178 )

Net loss and comprehensive loss ( 148,465 ) — — — ( 148,465 ) — —

Non-cash compensation 9,854 — — 9,854 — — —

Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes ( 485 ) 33 1 ( 486 ) — — —

Balance as of September 30, 2023 $ 102,619 16,357 $ 164 $ 1,219,055 $ ( 850,422 ) 3,355 $ ( 266,178 )

The accompanying notes to consolidated financial statements are an integral part of these statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

Cash flows from operating activities:

Net income and comprehensive income $ 8,768 $ 13,342

Adjustments to reconcile net income to net cash provided by operating activities:

Net loss and comprehensive loss $ ( 49,210 ) $ ( 135,123 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Loss on impairments and disposal of assets 787 5,255

5 unchanged sentences

Amortization of debt issuance costs 1,691 3,473

Write-off of previously-capitalized debt issuance costs — 2,373

Amortization of debt discount 224 —

1 unchanged sentence

Gain on settlement of convertible debt ( 9,035 ) ( 34,308 )

Loss on impairment of investments — 1,440

Loss on impairment of equity investments 58,376 114,504

Loss on impairment of goodwill — 38,600

Changes in current assets and liabilities:

16 unchanged sentences

Payment of original issue discount ( 3,125 ) —

Other financing activities ( 277 ) —

Net cash used in financing activities ( 52,894 ) ( 160,150 )

17 unchanged sentences

Basis of Presentation

The accompanying unaudited interim consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S.

The accompanying unaudited interim consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

In the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company's financial position for the periods presented.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or any other period.

The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or any other period.

The accompanying consolidated balance sheet as of December 31, 2023 was derived from audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”).

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These assumptions and estimates may change as new events occur and additional information is obtained.

If economic conditions worsen, such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity.

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

economic conditions worsen, such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity.

Certain Risks and Concentrations

LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and fraud.

Financial instruments, which potentially subject the Company to concentration of credit risk at June 30, 2024, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet.

Financial instruments, which potentially subject the Company to concentration of credit risk at September 30, 2024, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet.

Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit.

24 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

19 unchanged sentences

Subscription fees were recognized over the period a consumer was receiving services.

As of the second quarter of 2023, the Company discontinued providing its credit services product to consumers and no longer receives upfront and subscription fees.

As of the second quarter of 2023, the Company discontinued providing its credit services product to consumers and no longer receives upfront or subscription fees.

The Company recognizes revenue on closing fees and approval fees at the point when a loan request or a credit card consumer is delivered to the customer.

6 unchanged sentences

The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a consumer request to the customer.

The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $ 16.7 million and $ 13.7 million at June 30, 2024 and December 31, 2023, respectively.

The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $ 18.6 million and $ 13.7 million at September 30, 2024 and December 31, 2023, respectively.

LENDINGTREE, INC.

2 unchanged sentences

As the contract liability was in the Ovation business that closed during 2023, there was no contract liability at December 31, 2023.

During the second quarter and first six months of 2023, the Company recognized revenue of $ 0.1 million and $ 0.9 million, respectively, that was included in the contract liability balance at December 31, 2022.

During the first nine months of 2023, the Company recognized revenue of $ 0.9 million, that was included in the contract liability balance at December 31, 2022.

Revenue recognized in any reporting period includes estimated variable consideration for which the Company has satisfied the related performance obligations but are still pending the occurrence or non-occurrence of a future event outside the Company's control (such as lenders providing loans to consumers or credit card approvals of consumers) before the Company has a contractual right to payment.

The Company recognizes increases or decreases to such revenue from prior periods.

There was an increase of $ 0.2 million in the second quarter of 2024, and there was a decrease of $ 0.9 million in the second quarter of 2023.

There was an increase of $ 0.2 million in the third quarter of 2024, and there was a decrease of $ 0.1 million in the third quarter of 2023.

NOTE 4— CASH AND RESTRICTED CASH

Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands) :

September 30,

2024 December 31,

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Write-off of uncollectible accounts receivable ( 33 ) ( 102 ) ( 269 ) ( 2,075 )

Recoveries collected — 33 — 33

Assets held for sale

Balance, end of the period $ 2,375 $ 2,449 $ 2,375 $ 2,449

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6— GOODWILL AND INTANGIBLE ASSETS

The balance of goodwill, net and intangible assets, net is as follows (in thousands) :

September 30,

2024 December 31,

5 unchanged sentences

Total intangible assets, net $ 46,198 $ 50,620

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Goodwill and Indefinite-Lived Intangible Assets

The Company's goodwill at each of June 30, 2024 and December 31, 2023 consisted of $ 59.3 million associated with the Home segment, $ 166.1 million associated with the Consumer segment, and $ 156.1 million associated with the Insurance segment.

The Company's goodwill at each of September 30, 2024 and December 31, 2023 consisted of $ 59.3 million associated with the Home segment, $ 166.1 million associated with the Consumer segment, and $ 156.1 million associated with the Insurance segment.

During the third quarter of 2023, the Company concluded that a triggering event had occurred related to its goodwill and an interim quantitative impairment test was performed as of September 30, 2023.

12 unchanged sentences

Customer lists 76,100 ( 40,044 ) 36,056

Balance at June 30, 2024 $ 76,100 $ ( 38,577 ) $ 37,523

Balance at September 30, 2024 $ 76,100 $ ( 40,044 ) $ 36,056

Cost Accumulated

3 unchanged sentences

Balance at December 31, 2023 $ 77,400 $ ( 36,922 ) $ 40,478

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of June 30, 2024, future amortization is estimated to be as follows (in thousands) :

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of September 30, 2024, future amortization is estimated to be as follows (in thousands) :

Amortization Expense

6 unchanged sentences

Total intangible assets with definite lives, net $ 36,056

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7— EQUITY INVESTMENT

The equity investments do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its investments.

The Company's equity investments do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its investments.

Accordingly, the equity investments will be carried at cost less impairment, if any, and subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar investments.

1 unchanged sentence

Any gains or losses are included within other income (expense) in the consolidated statements of operations and comprehensive income.

In the second quarter of 2023, the Company recorded an impairment charge of $ 1.4 million on one of its investments in equity securities.

In the third quarter of 2024, the Company was informed that Stash executed a term sheet for additional funding.

As a result, the Company determined there was an impairment indicator related to its Stash investment.

The Company determined the fair value by predominately modeling its value of the investment based on the new funding terms.

Based on the valuation of the Stash investment, the Company determined the estimated fair value was below the carrying value of the investment and recorded an impairment charge of $ 43.4 million.

In the third quarter of 2024, the Company determined there was an impairment indicator related to its EarnUp investment and recorded an impairment charge of $ 15.0 million.

In the third quarter of 2023, the Company determined there was an impairment indicator related to its Stash investment and performed a valuation of the investment.

Based on the valuation, the Company determined the estimated fair value was below the carrying value of the investment and recorded an impairment charge of $ 113.1 million.

In the second quarter of 2023, the Company recorded an impairment charge of $ 1.4 million on one of its investments in equity securities.

NOTE 8— ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands) :

September 30,

2024 December 31,

6 unchanged sentences

Total accrued expenses and other current liabilities $ 97,128 $ 70,544

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9— SHAREHOLDERS' EQUITY

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

3 unchanged sentences

Weighted average diluted common shares 13,349 12,993 13,236 12,919

For the second quarter of 2024, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.1 million restricted stock units.

For the first six months of 2024, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.1 million restricted stock units.

For the second quarter of 2023, the Company was in a net loss position and, as a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been anti-dilutive.

For the third quarter and first nine months of 2024, the Company was in a net loss position and, as a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been anti-dilutive.

Accordingly, the weighted average basic shares outstanding was used to compute loss per share.

For the second quarter of 2023, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.2 million shares of common stock and 0.6 million restricted stock units.

For the first six months

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of 2023, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.5 million restricted stock units.

Approximately 0.2 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2024, because their inclusion would have been anti-dilutive.

For the third quarter of 2024, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 0.9 million shares of common stock and 0.1 million restricted stock units.

For the first nine months of 2024, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 0.9 million shares of common stock and 0.1 million restricted stock units.

For the third quarter and first nine months of 2023, the Company was in a net loss position and, as a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been anti-dilutive.

Accordingly, the weighted average basic shares outstanding was used to compute loss per share.

An immaterial amount of shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2023 because their inclusion would have been anti-dilutive.

For the third quarter of 2023, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.2 million shares of common stock and 0.5 million restricted stock units.

For the first nine months of 2023, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.2 million shares of common stock and 0.5 million restricted stock units.

The convertible notes and the warrants issued by the Company could be converted into the Company’s common stock, subject to certain contingencies.

See Note 12 — Debt for additional information.

Approximately 0.6 million shares in the second quarter and first six months of 2024, and approximately 0.8 million and 1.2 million shares in the second quarter and first six months of 2023, respectively, associated with the 0.50 % Convertible Senior Notes due July 15, 2025 were excluded from the calculation of diluted income (loss) per share because their inclusion would have been anti-dilutive.

Shares of the Company's common stock associated with the warrants issued by the Company in 2020 were excluded from the calculation of diluted income (loss) per share for the second quarter and first six months of 2024 and the second quarter and first six months of 2023 as they were anti-dilutive since the strike price of the warrants was greater than the average market price of the Company's common stock during the relevant periods.

Approximately 0.3 million and 0.6 million shares in the third quarter and first nine months of 2024, and approximately 0.8 million and 1.2 million shares in the third quarter and first nine months of 2023, respectively, associated with the 0.50 % Convertible Senior Notes due July 15, 2025 were excluded from the calculation of diluted income (loss) per share because their inclusion would have been anti-dilutive.

Shares of the Company's common stock associated with the warrants issued by the Company in 2020 were excluded from the calculation of diluted income (loss) per share for the third quarter and first nine months of 2024 and the third quarter and first nine months of 2023 as they were anti-dilutive since the strike price of the warrants was greater than the average market price of the Company's common stock during the relevant periods.

Equity Distribution Agreement

In July 2024, the Company entered into an Equity Distribution Agreement in connection with the establishment of an ATM Equity Program (as defined in the 2024 Term Loan (as defined herein) agreement) under which the Company may sell up to an aggregate of $ 50.0 million of shares of the Company's common stock.

No sales were made under the Equity Distribution Agreement during the three months ended September 30, 2024.

Common Stock Repurchases

The Company has a plan authorized for the repurchase of LendingTree's common stock.

During the first six months of 2024 and 2023, the Company did no t repurchase shares of its common stock.

At June 30, 2024, approximately $ 96.7 million of the previous authorizations to repurchase common stock remain available.

During the first nine months of 2024 and 2023, the Company did no t repurchase shares of its common stock.

At September 30, 2024, approximately $ 96.7 million of the previous authorizations to repurchase common stock remain available.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10— STOCK-BASED COMPENSATION

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

15 unchanged sentences

Expired ( 98,876 ) 193.70

Options outstanding at June 30, 2024 457,465 220.05 5.15 $ —

Options exercisable at June 30, 2024 368,235 $ 214.00 4.75 $ —

(a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $ 41.59 on the last trading day of the quarter ended June 30, 2024 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

option holder exercised these options on June 30, 2024.

Options outstanding at September 30, 2024 375,946 225.04 5.79 $ 151

Options exercisable at September 30, 2024 289,625 $ 217.78 5.58 $ 151

(a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $ 58.03 on the last trading day of the quarter ended September 30, 2024 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on September 30, 2024.

The intrinsic value changes based on the market value of the Company's common stock.

9 unchanged sentences

Expired ( 19,126 ) 275.82

Options outstanding at June 30, 2024 699,312 227.74 4.14 $ —

Options exercisable at June 30, 2024 481,669 $ 195.10 3.10 $ —

Options outstanding at September 30, 2024 699,312 227.74 3.89 $ —

Options exercisable at September 30, 2024 481,669 $ 195.10 2.85 $ —

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The intrinsic value changes based on the market value of the Company's common stock.

As of June 30, 2024, a maximum of 363,464 shares may be earned for achieving superior performance up to 167 % of the remaining unvested target number of shares.

As of June 30, 2024, no additional performance-based nonqualified stock options with a market condition had been earned.

As of September 30, 2024, a maximum of 363,464 shares may be earned for achieving superior performance up to 167 % of the remaining unvested target number of shares.

As of September 30, 2024, no additional performance-based nonqualified stock options with a market condition had been earned.

Restricted Stock Units

5 unchanged sentences

Forfeited ( 80,258 ) 45.20

Nonvested at June 30, 2024 618,055 $ 48.36

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Nonvested at September 30, 2024 576,419 $ 46.76

Restricted Stock Units with Market Conditions

A summary of changes in outstanding nonvested RSUs with performance conditions is as follows:

RSUs with Market Conditions

RSUs with Market Conditions (a)

Number of Units Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited — —

Nonvested at June 30, 2024 57,500 $ 35.35

(a) During the six months ended June 30, 2024, the Company granted RSUs with market conditions that will vest if the Company's 45 trading day average closing stock prices equals or exceeds certain price hurdles ($ 41.17 , $ 52.94 and $ 64.70 ) during the performance period of March 1, 2024 to March 1, 2028.

Nonvested at September 30, 2024 46,000 $ 35.24

(a) During the nine months ended September 30, 2024, the Company granted RSUs with market conditions that will vest if the Company's 45 trading day average closing stock prices equals or exceeds certain price hurdles ($ 41.17 , $ 52.94 and $ 64.70 ) during the performance period of March 1, 2024 to March 1, 2028.

Upon achievement of each price hurdle, one-half of the awards will vest immediately, and the other half of the awards will vest on the first anniversary of the achievement date.

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Expected dividend (4)

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(1) The expected term of RSUs with market conditions granted was calculated using a four-year performance period plus one year to account for the time-based vesting requirement.

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In 2021, the Company implemented an employee stock purchase plan (“ESPP”), under which a total of 262,731 shares of the Company's common stock were reserved for issuance.

As of June 30, 2024, 134,412 shares of common stock were available for issuance under the ESPP.

As of September 30, 2024, 134,412 shares of common stock were available for issuance under the ESPP.

The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code.

1 unchanged sentence

The offering periods and purchase periods are typically six-month periods ending on June 30 and December 31 of each year.

During the six months ended June 30, 2024, 27,852 shares were issued under the ESPP.

During the six months ended June 30, 2024 and 2023, the Company granted employee stock purchase rights to certain employees with a grant date fair value per share of $ 11.27 and $ 8.19 , respectively, calculated using the Black-Scholes option pricing model.

During the nine months ended September 30, 2024, 27,852 shares were issued under the ESPP.

During the nine months ended September 30, 2024 and 2023, the Company granted employee stock purchase rights to certain employees with a grant date fair value per share of $ 12.68 and $ 8.53 , respectively, calculated using the Black-Scholes option pricing model.

For purposes of determining stock-based compensation expense, the grant date fair value per share estimated using the Black-Scholes option pricing model required the use of the following key assumptions:

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended

Nine Months Ended

September 30,

Expected term (1)

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5.28 - 5.33 %

4.76 - 5.50 %

(1) The expected term was calculated using the time period between the grant date and the purchase date.

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands, except percentages)

Income tax expense $ ( 1,686 ) $ ( 227 ) $ ( 2,245 ) $ ( 622 )

Income tax (expense) benefit $ ( 447 ) $ 3,534 $ ( 2,692 ) $ 2,912

Effective tax rate ( 0.8 ) % 2.3 % ( 5.8 ) % 2.1 %

For the second quarter and first six months of 2024, and the second quarter and first six months of 2023 the effective tax rate varied from the federal statutory rate of 21 % primarily due to the change in the valuation allowance, net of the current period change in tax effected net indefinite-lived intangibles.

For the third quarter and first nine months of 2024, and the third quarter and first nine months of 2023 the effective tax rate varied from the federal statutory rate of 21 % primarily due to the change in the valuation allowance, net of the current period change in tax effected net indefinite-lived intangibles.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12— DEBT

5 unchanged sentences

In the second quarter of 2024, the Company repurchased approximately $ 161.3 million in principal amount of the 2025 Notes for $ 151.7 million plus accrued and unpaid interest of approximately $ 0.3 million.

As a result of the repurchase, the Company recognized a gain on the extinguishment of $ 9.6 million and a loss on the write-off of unamortized debt issuance costs of $ 1.0 million, both of which are included in interest income/expense, net in the consolidated statements of operations and comprehensive income.

As a result of the repurchase, the Company recognized a gain on the extinguishment of $ 9.6 million and a loss on the write-off of unamortized debt issuance costs of $ 1.0 million, both of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.

In the third quarter of 2024, the Company repurchased approximately $ 7.6 million in principal amount of the 2025 Notes for $ 7.2 million.

As a result of the repurchase, the Company recognized a gain on the extinguishment of $ 0.5 million and an immaterial loss on the write-off of unamortized debt issuance costs, both of which are included in interest income/expense, net in the consolidated statements of operations and comprehensive income.

In the first quarter of 2023, the Company repurchased approximately $ 190.6 million in principal amount of its 2025 Notes, through individual privately-negotiated transactions with certain holders of the 2025 Notes, for $ 156.3 million in cash plus accrued and unpaid interest of approximately $ 0.1 million.

In the fourth quarter of 2023, the Company repurchased approximately $ 100.2 million in principal amount of its 2025 Notes, through privately-negotiated transactions with certain holders of the 2025 Notes, for $ 81.2 million in cash plus accrued and unpaid interest of approximately $ 0.2 million.

During the year ended December 31, 2023, the Company recognized a gain on the extinguishment of debt of $ 53.3 million, a loss on the

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

write-off of unamortized debt issuance costs of $ 3.2 million and incurred debt repayment costs of $ 1.6 million, all of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.

Holders of the 2025 Notes were not entitled to convert the 2025 Notes during the calendar quarter ended June 30, 2024 as the last reported sale price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on March 31, 2024, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day.

In the first six months of 2024, the Company recorded interest expense on the 2025 Notes of $ 1.3 million which consisted of $ 0.6 million associated with the 0.50 % coupon rate and $ 0.7 million associated with the amortization of the debt issuance costs.

In the first six months of 2023, the Company recorded interest expense on the 2025 Notes of $ 2.3 million which consisted of $ 1.1 million associated with the 0.50 % coupon rate and $ 1.2 million associated with the amortization of the debt issuance costs.

As of June 30, 2024, the fair value of the 2025 Notes was estimated to be approximately $ 113.7 million using the Level 1 observable input of the last quoted market price on June 30, 2024.

A summary of the gross carrying amount, debt issuance costs, and net carrying value of the 2025 Notes, all of which was recorded as a non-current liability in the June 30, 2024 consolidated balance sheet, are as follows (in thousands) :

During the year ended December 31, 2023, the Company recognized a gain on the extinguishment of debt of $ 53.3 million, a loss on the write-off of unamortized debt issuance costs of $ 3.2 million and incurred debt repayment costs of $ 1.6 million, all of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.

Holders of the 2025 Notes were not entitled to convert the 2025 Notes during the calendar quarter ended September 30, 2024 as the last reported sale price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on June 30, 2024, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day.

In the first nine months of 2024, the Company recorded interest expense on the 2025 Notes of $ 1.6 million which consisted of $ 0.8 million associated with the 0.50 % coupon rate and $ 0.8 million associated with the amortization of the debt issuance costs.

In the first nine months of 2023, the Company recorded interest expense on the 2025 Notes of $ 3.3 million which consisted of $ 1.6 million associated with the 0.50 % coupon rate and $ 1.7 million associated with the amortization of the debt issuance costs.

As of September 30, 2024, the fair value of the 2025 Notes was estimated to be approximately $ 109.0 million using the Level 1 observable input of the last quoted market price on September 30, 2024.

A summary of the gross carrying amount, debt issuance costs, and net carrying value of the 2025 Notes, all of which was recorded as a current liability in the September 30, 2024 consolidated balance sheet, are as follows (in thousands) :

September 30,

2024 December 31,

2 unchanged sentences

Net carrying amount $ 114,823 $ 281,867

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Convertible Note Hedge and Warrant Transactions

8 unchanged sentences

Subsequent to such termination, the outstanding portion of the 2020 Hedge covers 0.3 million shares of the Company's common stock and 2020 Warrants to acquire 0.3 million shares of the Company's common stock remain outstanding.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2021 Credit Facility

On September 15, 2021, the Company entered into a credit agreement (the “Credit Agreement”), consisting of a $ 200.0 million revolving credit facility (the “Revolving Facility”), which matures on September 15, 2026, and a $ 250.0 million delayed draw term loan facility (the “2021 Term Loan” and together with the Revolving Facility, the “Credit Facility”), which matures on September 15, 2028.

As of June 30, 2024, the Company had $ 245.6 million of borrowings outstanding under the 2021 Term Loan bearing interest at the SOFR option rate of 9.2 % and had no borrowings under the Revolving Facility.

As of September 30, 2024, the Company had $ 244.4 million of borrowings outstanding under the 2021 Term Loan bearing interest at the SOFR option rate of 9.0 % and had no borrowings under the Revolving Facility.

As of December 31, 2023, the Company had $ 246.9 million of borrowings outstanding under the 2021 Term Loan and no borrowings under the Revolving Facility.

As of June 30, 2024, borrowings of $ 3.1 million under the 2021 Term Loan are recorded as current portion of long-term debt on the consolidated balance sheet.

At each of June 30, 2024 and December 31, 2023, the Company had outstanding one letter of credit issued in the amount of $ 0.2 million.

The Company was in compliance with all covenants at June 30, 2024.

In the first six months of 2024, the Company recorded interest expense related to its Revolving Facility of $ 0.9 million which consisted of $ 0.4 million in unused commitment fees and $ 0.5 million associated with the amortization of the debt issuance costs.

In the first six months of 2024, the Company recorded interest expense related to the 2021 Term Loan of $ 11.4 million associated with borrowings bearing interest at the SOFR rate.

In the first six months of 2023, the Company recorded interest expense related to its Revolving Facility of $ 0.7 million which consisted of $ 0.2 million in unused commitment fees and $ 0.5 million associated with the amortization of the debt issuance costs.

In the first six months of 2023, the Company recorded interest expense related to the 2021 Term Loan of $ 10.7 million associated with borrowings bearing interest at the LIBO rate.

As of September 30, 2024, borrowings of $ 2.5 million under the 2021 Term Loan are recorded as current portion of long-term debt on the consolidated balance sheet.

At December 31, 2023, the Company had outstanding one letter of credit issued in the amount of $ 0.2 million.

The Company was in compliance with all covenants at September 30, 2024.

In the first nine months of 2024, the Company recorded interest expense related to its Revolving Facility of $ 1.3 million which consisted of $ 0.6 million in unused commitment fees and $ 0.7 million associated with the amortization of the debt issuance costs.

In the first nine months of 2024, the Company recorded interest expense related to the 2021 Term Loan of $ 17.3 million associated with borrowings bearing interest at the SOFR rate.

In the first nine months of 2023, the Company recorded interest expense related to its Revolving Facility of $ 1.1 million which consisted of $ 0.4 million in unused commitment fees and $ 0.7 million associated with the amortization of the debt issuance costs.

In the first nine months of 2023, the Company recorded interest expense related to the 2021 Term Loan of $ 16.4 million associated with borrowings bearing interest at the LIBO rate during the first six months of 2023 and the SOFR option rate in the third quarter of 2023.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2024 Term Loan

1 unchanged sentence

The Company drew $ 125.0 million of the 2024 Term Loan upon closing while the remaining $ 50.0 million will be available as a delayed draw term loan until March 27, 2025.

The proceeds of the 2024 Term Loan made on March 27, 2024 will be used to pay fees and expenses incurred in connection with the closing of the 2024 Term Loan and delayed draw term loan, and will be used for working capital and general corporate purposes, which may include repayment of the 2025 Notes.

As of June 30, 2024, the Company had $ 121.9 million borrowings outstanding under the 2024 Term Loan bearing interest at the SOFR rate of 11.1 %.

As of June 30, 2024, borrowings of $ 12.5 million under the 2024 Term Loan are recorded as current portion of long-term debt on the consolidated balance sheet.

The proceeds of the 2024 Term Loan made on March 27, 2024 were used to pay fees and expenses incurred in connection with the closing of the 2024 Term Loan and delayed draw term loan, and will be used for working capital and general corporate purposes, which may include repayment of the 2025 Notes.

As of September 30, 2024, the Company had $ 118.8 million borrowings outstanding under the 2024 Term Loan bearing interest at the SOFR rate of 10.6 %.

As of September 30, 2024, borrowings of $ 9.4 million under the 2024 Term Loan are recorded as current portion of long-term debt on the consolidated balance sheet.

The 2024 Term Loan is pre-payable at par, after 12 months of call protection (during which time prepayment would be at 101 % of par), or with respect to prepayments made with respect to a change of control, at 101 % of par, and carries a seven-year term.

1 unchanged sentence

The 2024 Term Loan has certain financial covenants which are tested on a quarterly basis.

The covenants include a requirement for the Company to have a minimum cash balance of $ 40.0 million and a minimum Consolidated EBITDA (as such term is defined in the 2024 Term Loan agreement dated as of March 27, 2024) based on the applicable quarter.

The Company was in compliance with all covenants at June 30, 2024.

The covenants include a requirement for the Company to maintain a minimum cash balance of $ 40.0 million as of the last day of any fiscal quarter (or subject to certain conditions an average cash balance of $ 40.0 million based on the average cash balance as of the last day of each week during a fiscal quarter) and a minimum Consolidated EBITDA (as such term is defined in the 2024 Term Loan agreement dated as of March 27, 2024) based on the applicable quarter.

The Company was in compliance with all covenants at September 30, 2024.

In addition, the 2024 Term Loan contains mandatory prepayment events, affirmative and negative covenants and events of default customary for a transaction of this type.

The covenants, among other things, restrict additional indebtedness, liens, mergers or certain fundamental changes, asset dispositions, dividends and other restricted payments, transactions with affiliates, loans and investments and other matters customarily restricted in agreements of this type, all subject to certain exceptions.

In addition, the Company is required to file an ATM Shelf Registration (as defined in the 2024 Term Loan agreement) with the SEC.

In the event of a default in the minimum Consolidated EBITDA covenant, the Company is required to utilize the ATM Equity Program (as defined in the 2024 Term Loan agreement) to sell common stock and use the proceeds to cure the event of default in the minimum Consolidated EBITDA covenant.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In addition, the Company filed an ATM Shelf Registration (as defined in the 2024 Term Loan agreement) with the SEC in the third quarter of 2024.

In the event of a default in the minimum Consolidated EBITDA (as defined in the 2024 Term Loan agreement) covenant, the Company is required to utilize the ATM Equity Program (as defined in the 2024 Term Loan agreement) to sell common stock and use the proceeds to cure the event of default in the minimum Consolidated EBITDA covenant.

Additionally, the Company may use the ATM Equity Program to maintain the $ 40.0 million minimum cash balance requirement in the 2024 Term Loan.

The Company is required to make mandatory prepayments of the outstanding principal amount of loans under the 2024 Term Loan with the net cash proceeds from certain disposition of assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.

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As security for its obligations under the facility, the Company granted a security interest to substantially all of the Company’s assets and the assets of its material subsidiaries, subject to certain exceptions.

With respect to the 2024 Term Loan, the Company incurred financing costs of $ 7.3 million upon closing consisting of $ 4.2 million of debt issuance costs and $ 3.1 million of original issue discount which are being amortized to interest expense over the life of the 2024 Term Loan.

With respect to the 2024 Term Loan, the Company incurred financing costs of $ 7.4 million upon closing consisting of $ 2.8 million of debt issuance costs and $ 3.1 million of original issue discount associated with the initial $ 125.0 million borrowing which are being amortized to interest expense over the life of the 2024 Term Loan and $ 1.5 million of debt issuance costs associated with the $ 50.0 million delayed draw term loan which are being deferred until the funds are drawn.

Additionally, the Company is required to pay an unused commitment fee quarterly in arrears in an amount equal to 1.50 % per annum on the amount of the undrawn portion of the delayed draw term loan commitments under the 2024 Term Loan.

In the first six months of 2024, the Company recorded interest expense related to the 2024 Term Loan of $ 4.2 million which consisted of $ 3.7 million associated with borrowings bearing interest at the SOFR rate, $ 0.2 million associated with unused commitment fees, $ 0.2 million associated with the amortization of debt issuance costs, and $ 0.1 million associated with the accretion of the original issue discount.

A summary of the gross carrying amount, debt issuance costs, original issue discount, and net carrying value of the 2024 Term Loan in the June 30, 2024 consolidated balance sheet, are as follows (in thousands):

In the first nine months of 2024, the Company recorded interest expense related to the 2024 Term Loan of $ 8.0 million which consisted of $ 7.2 million associated with borrowings bearing interest at the SOFR rate, $ 0.4 million associated with

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

unused commitment fees, $ 0.2 million associated with the amortization of debt issuance costs, and $ 0.2 million associated with the accretion of the original issue discount.

A summary of the gross carrying amount, debt issuance costs, original issue discount, and net carrying value of the 2024 Term Loan in the September 30, 2024 consolidated balance sheet, are as follows (in thousands):

September 30,

Current Portion

12 unchanged sentences

With respect to the matters disclosed in this Note 13, unless otherwise indicated, the Company is unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies.

As of June 30, 2024 and December 31, 2023, the Company had litigation settlement accruals of $ 0.6 million and $ 0.6 million, respectively.

The litigation settlement accruals relate to litigation matters that were either settled or a firm offer for settlement was extended, thereby establishing an accrual amount that is both probable and reasonably estimable.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of September 30, 2024 and December 31, 2023, the Company had litigation settlement accruals of $ 4.3 million and $ 0.6 million, respectively.

The litigation settlement accruals relate to litigation matters that were either settled, a firm offer for settlement was extended or an estimated settlement range has been determined, thereby establishing an accrual amount that is both probable and reasonably estimable.

NOTE 14— FAIR VALUE MEASUREMENTS

Other than the convertible notes and warrants, as well as the equity interests, the carrying amounts of the Company's financial instruments are equal to fair value at June 30, 2024.

Other than the convertible notes and warrants, as well as the equity interests, the carrying amounts of the Company's financial instruments are equal to fair value at September 30, 2024.

See Note 12—Debt for additional information on the convertible notes and warrants.

9 unchanged sentences

The Insurance segment consists of insurance quote products and sales of insurance policies in the agency businesses.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables are a reconciliation of segment profit, which is the Company's primary segment profitability measure, to income before income taxes.

1 unchanged sentence

This measure excludes overhead, fixed costs and personnel-related expenses.

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Home Consumer Insurance Other Total

13 unchanged sentences

Interest expense, net ( 10,060 )

Other income 1,052

Income before income taxes $ 9,438

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Three Months Ended June 30, 2023

Other expense ( 57,391 )

Loss before income taxes $ ( 57,531 )

Three Months Ended September 30, 2023

Home Consumer Insurance Other Total

9 unchanged sentences

Amortization of intangibles 1,981

Goodwill impairment 38,600

Restructuring and severance 1,955

Litigation settlements and contingencies ( 150 )

Operating income 6,613

Operating loss ( 33,992 )

Interest expense, net ( 7,097 )

Other income 439

Income before income taxes $ 112

Six Months Ended June 30, 2024

Other expense ( 110,910 )

Loss before income taxes $ ( 151,999 )

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Nine Months Ended September 30, 2024

Home Consumer Insurance Other Total

13 unchanged sentences

Interest expense, net ( 17,899 )

Other income 2,086

Income before income taxes $ 11,013

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended June 30, 2023

Other expense ( 55,305 )

Loss before income taxes $ ( 46,518 )

Nine Months Ended September 30, 2023

Home Consumer Insurance Other Total

9 unchanged sentences

Amortization of intangibles 6,012

Goodwill impairment 38,600

Restructuring and severance 9,967

2 unchanged sentences

Interest income, net 10,992

Other income 2,273

Income before income taxes $ 13,964

Other expense ( 108,637 )

Loss before income taxes $ ( 138,035 )

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 16— RESTRUCTURING ACTIVITIES

During September 2023, the Company completed workforce reductions of 14 employees.

The Company incurred approximately $ 0.9 million in severance charges in connection with the workforce reductions, consisting of cash expenditures for employee separation costs of approximately $ 0.7 million in the third quarter of 2023 and non-cash charges for the accelerated vesting of certain equity awards of approximately $ 0.2 million through the fourth quarter of 2023.

The cash payments are expected to be substantially completed by the third quarter of 2024.

The Company incurred approximately $ 0.9 million in severance charges in connection with the workforce reductions, consisting of cash expenditures for employee separation costs of approximately $ 0.7 million in the third quarter of 2023 and non-cash charges due to the accelerated vesting of certain equity awards of approximately $ 0.2 million through the fourth quarter of 2023.

The cash payments were completed by the third quarter of 2024.

On April 6, 2023, the Company made the decision to close the Ovation credit services business ( the "Ovation Closure".) The Ovation Closure included the elimination of approximately 197 employees, or 18 % of the Company's workforce.

6 unchanged sentences

The Company incurred restructuring expense of $ 4.3 million in the first quarter of 2023 and an additional $ 1.0 million of restructuring expense in the second quarter of 2023 related to the Reduction Plan.

The Reduction Plan, including cash payments, is expected to be substantially completed by the end of the third quarter of 2024.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Reduction Plan, including cash payments, was completed by the end of the third quarter of 2024.

Accrued Balance at December 31, 2023

Income Statement Impact Payments Accrued Balance at June 30, 2024

Income Statement Impact Payments Accrued Balance at September 30, 2024

Q3 2023 action

5 unchanged sentences

$ 709 $ 12 $ ( 721 ) $ —

NOTE 17— SUBSEQUENT EVENTS

In July 2024, the Company repurchased approximately $ 7.6 million in principal amount of its 2025 Notes, through individual privately-negotiated transactions with certain holders of the 2025 Notes, for $ 7.2 million in cash.

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-Q

Item 1. Financial Statements