LendingTree, Inc. 10-Q

Item 1. Financial Statements LENDINGTREE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, 2025 December 31, 2024 (in thousands, except par value and share amounts) ASSETS: Cash and cash equivalents $ 126,390 $ 106,594 Accounts receivable (net of allowance of $ 1,458 and $ 1,407 , respectively) 85,241 97,790 Prepaid and other current assets 41,626 34,078 Assets held for sale (Note 6) 1,221 — Total current assets 254,478 238,462 Property and equipment (net of accumulated depreciation of $ 32,450 and $ 33,375 , respectively) 40,565 42,780 Operating lease right-of-use assets 51,397 52,557 Goodwill 381,539 381,539 Intangible assets, net 41,976 43,283 Equity investments 1,700 1,700 Other non-current assets 5,448 7,353 Total assets $ 777,103 $ 767,674 LIABILITIES: Current portion of long-term debt $ 106,027 $ 124,931 Accounts payable, trade 6,043 8,360 Accrued expenses and other current liabilities 100,470 107,185 Total current liabilities 212,540 240,476 Long-term debt 387,661 344,124 Operating lease liabilities 67,726 69,238 Deferred income tax liabilities 5,280 4,884 Other non-current liabilities 153 131 Total liabilities 673,360 658,853 Commitments and contingencies (Note 12) SHAREHOLDERS' EQUITY: Preferred stock $ 0.01 par value; 5,000,000 shares authorized; none issued or outstanding — — Common stock $ 0.01 par value; 50,000,000 shares authorized; 16,889,299 and 16,746,556 shares issued, respectively, and 13,533,833 and 13,391,090 shares outstanding, respectively 169 167 Additional paid-in capital 1,261,534 1,254,239 Accumulated deficit ( 891,782 ) ( 879,407 ) Treasury stock; 3,355,466 and 3,355,466 shares, respectively ( 266,178 ) ( 266,178 ) Total shareholders' equity 103,743 108,821 Total liabilities and shareholders' equity $ 777,103 $ 767,674 The accompanying notes to consolidated financial statements are an integral part of these statements. 3 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended March 31, 2025 2024 (in thousands, except per share amounts) Revenue $ 239,728 $ 167,768 Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) 9,908 8,545 Selling and marketing expense 172,751 108,176 General and administrative expense 30,660 25,796 Product development 11,904 11,857 Depreciation 4,297 4,667 Amortization of intangibles 1,307 1,489 Restructuring and severance 798 23 Litigation settlements and contingencies 15,212 36 Total costs and expenses 246,837 160,589 Operating (loss) income ( 7,109 ) 7,179 Other income (expense), net: Interest expense, net ( 9,084 ) ( 6,638 ) Other income 1,388 1,034 (Loss) income before income taxes ( 14,805 ) 1,575 Income tax benefit (expense) 2,430 ( 559 ) Net (loss) income and comprehensive (loss) income $ ( 12,375 ) $ 1,016 Weighted average shares outstanding: Basic 13,441 13,100 Diluted 13,441 13,276 Net (loss) income per share: Basic $ ( 0.92 ) $ 0.08 Diluted $ ( 0.92 ) $ 0.08 The accompanying notes to consolidated financial statements are an integral part of these statements. 4 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) Common Stock Treasury Stock Total Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Number of Shares Amount (in thousands) Balance as of December 31, 2024 $ 108,821 16,747 $ 167 $ 1,254,239 $ ( 879,407 ) 3,355 $ ( 266,178 ) Net income and comprehensive income ( 12,375 ) — — — ( 12,375 ) — — Non-cash compensation 9,927 — — 9,927 — — — Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes ( 2,630 ) 142 2 ( 2,632 ) — — — Balance as of March 31, 2025 $ 103,743 16,889 $ 169 $ 1,261,534 $ ( 891,782 ) 3,355 $ ( 266,178 ) Common Stock Treasury Stock Total Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Number of Shares Amount (in thousands) Balance as of December 31, 2023 $ 124,132 16,397 $ 164 $ 1,227,849 $ ( 837,703 ) 3,355 $ ( 266,178 ) Net income and comprehensive loss 1,016 — — — 1,016 — — Non-cash compensation 7,789 — — 7,789 — — — Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes ( 1,422 ) 180 2 ( 1,424 ) — — — Balance as of March 31, 2024 $ 131,515 16,577 $ 166 $ 1,234,214 $ ( 836,687 ) 3,355 $ ( 266,178 ) The accompanying notes to consolidated financial statements are an integral part of these statements. 5 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2025 2024 (in thousands) Cash flows from operating activities: Net (loss) income and comprehensive (loss) income $ ( 12,375 ) $ 1,016 Adjustments to reconcile net income to net cash provided by operating activities: Loss on impairments and disposal of assets 254 368 Amortization of intangibles 1,307 1,489 Depreciation 4,297 4,667 Non-cash compensation expense 9,927 7,789 Deferred income taxes 396 128 Bad debt expense 86 ( 129 ) Amortization of debt issuance costs 473 612 Amortization of debt discount 103 6 Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities ( 227 ) ( 1,007 ) Gain on settlement of convertible debt ( 266 ) — Changes in current assets and liabilities: Accounts receivable 12,463 ( 8,235 ) Prepaid and other current assets ( 4,680 ) ( 2,034 ) Accounts payable, accrued expenses and other current liabilities ( 8,798 ) 797 Income taxes ( 3,252 ) 86 Other, net 82 155 Net cash (used in) provided by operating activities ( 210 ) 5,708 Cash flows from investing activities: Capital expenditures ( 3,414 ) ( 2,746 ) Net cash used in investing activities ( 3,414 ) ( 2,746 ) Cash flows from financing activities: Proceeds from term loan 50,000 125,000 Repayment of term loan ( 3,750 ) ( 625 ) Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of stock options ( 2,630 ) ( 1,422 ) Repurchase of 0.50 % Convertible Senior Notes ( 19,700 ) — Payment of debt issuance costs ( 500 ) ( 4,085 ) Payment of original issue discount — ( 3,125 ) Net cash provided by financing activities 23,420 115,743 Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents 19,796 118,705 Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 106,594 112,056 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 126,390 $ 230,761 The accompanying notes to consolidated financial statements are an integral part of these statements. 6 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1— ORGANIZATION Company Overview LendingTree, Inc. 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 (collectively, “LendingTree” or the “Company”). LendingTree operates what it believes to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. The Company offers consumers tools and resources, including free credit scores, that facilitate comparison-shopping for mortgage loans, home equity loans and lines of credit, auto loans, credit cards, deposit accounts, personal loans, small business loans, insurance quotes, sales of insurance policies, and other related offerings. The Company primarily seeks to match in-market consumers with multiple providers on its marketplace who can provide them with competing quotes for loans, deposit products, insurance, or other related offerings they are seeking. The Company also serves as a valued partner to lenders and other providers seeking an efficient, scalable, and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries it generates with these providers. The consolidated financial statements include the accounts of LendingTree and all its wholly-owned entities. Intercompany transactions and accounts have been eliminated. Basis of Presentation The accompanying unaudited interim consolidated financial statements as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 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 months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or any other period. The accompanying consolidated balance sheet as of December 31, 2024 was derived from audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”). The accompanying consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in the 2024 Annual Report. NOTE 2— SIGNIFICANT ACCOUNTING POLICIES Accounting Estimates Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Significant estimates underlying the accompanying consolidated financial statements include: the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; fair value of assets acquired in a business combination; litigation accruals; contract assets; various other allowances, reserves and accruals; assumptions related to the determination of stock-based compensation; and the determination of right-of-use assets and lease liabilities. The Company considered the impact of the current economic conditions, including interest rates and inflation on the assumptions and estimates used when preparing its consolidated financial statements including, but not limited to, the allowance for doubtful accounts, valuation allowances, contract asset, and the recoverability of long-lived assets, goodwill and intangible assets. 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. 7 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 March 31, 2025, 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. The Company requires certain Network Partners to maintain security deposits with the Company, which in the event of non-payment, would be applied against any accounts receivable outstanding. Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the Company's marketplace. Lenders and lead purchasers participating on the Company's marketplace can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders and lead purchasers can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans and other products from Network Partners without utilizing the Company's services, the Company's ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the Network Partners whose loans and other financial products are offered on its online marketplace, consumers may obtain offers from these Network Partners without using its service. Other than a support services office in India, the Company's operations are geographically limited to and dependent upon the economic condition of the United States. Litigation Settlements and Contingencies Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements. Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-07 which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for annual periods beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. An entity should adopt the guidance as of the beginning of the earliest period presented. The Company adopted this ASU on December 31, 2024. See Note 14—Segment Information for further information. Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09 which expands annual disclosure requirements for income taxes, primarily through disclosure about disaggregated information about an entity's effective tax rate reconciliation and information on income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The guidance will be applied on a prospective basis with the option to adopt the guidance retrospectively. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt. In November 2024, the FASB issued ASU 2024-03 which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, including adoption in interim periods. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. 8 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3— REVENUE Revenue is as follows (in thousands) : Three Months Ended March 31, 2025 2024 Home $ 37,019 $ 30,443 Personal loans 23,402 20,127 Other Consumer 32,631 31,324 Total Consumer 56,033 51,451 Insurance 146,652 85,872 Other 24 2 Total revenue $ 239,728 $ 167,768 The Company derives its revenue primarily from match fees and closing fees. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and promised services have transferred to the customer. The Company's services are generally transferred to the customer at a point in time. Revenue from Home products is primarily generated from upfront match fees paid by mortgage Network Partners that receive a loan request, and in some cases upfront fees for clicks or call transfers. Match fees and upfront fees for clicks and call transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a loan request to the customer. Revenue from Consumer products is generated by match and other upfront fees for clicks or call transfers, as well as from closing fees and approval fees. Closing fees are derived from lenders on certain auto loans, business loans and personal loans when the lender funds a loan with the consumer. Approval fees are derived from credit card issuers when the credit card consumer receives card approval from the credit card issuer. 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. The Company's contractual right to closing fees and approval fees is not contemporaneous with the satisfaction of the performance obligation to deliver a loan request or a credit card consumer to the customer. As such, the Company records a contract asset at each reporting period-end related to the estimated variable consideration on closing fees and approval fees for which the Company has satisfied the related performance obligation but are still pending the loan closing or credit card approval before the Company has a contractual right to payment. This estimate is based on the Company's historical closing rates and historical time between when a consumer request for a loan or credit card is delivered to the lender or card issuer and when the loan is closed by the lender or approved by the card issuer. Revenue from the Company's Insurance products is primarily generated from upfront match fees and upfront fees for website clicks or fees for calls. Match fees and upfront fees for clicks and call transfers are earned through the delivery of consumer requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a consumer request is delivered to the customer, provided that no significant obligations remain. 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 $ 23.4 million and $ 20.5 million at March 31, 2025 and December 31, 2024, respectively. 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 first quarter of 2025 and an increase of $ 0.3 million in the first quarter of 2024. 9 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 4— ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, current and expected economic conditions and the specific customer's current and expected ability to pay its obligation. Accounts receivable are considered past due when they are outstanding longer than the contractual payment terms. Accounts receivable are written off when management deems them uncollectible. A reconciliation of the beginning and ending balances of the allowance for doubtful accounts is as follows (in thousands) : Three Months Ended March 31, 2025 2024 Balance, beginning of the period $ 1,407 $ 2,222 Charges to earnings 86 ( 129 ) Write-off of uncollectible accounts receivable ( 51 ) ( 67 ) Recoveries collected 16 — Balance, end of the period $ 1,458 $ 2,026 NOTE 5— GOODWILL AND INTANGIBLE ASSETS The balance of goodwill, net and intangible assets, net is as follows (in thousands) : March 31, 2025 December 31, 2024 Goodwill $ 903,227 $ 903,227 Accumulated impairment losses ( 521,688 ) ( 521,688 ) Net goodwill $ 381,539 $ 381,539 Intangible assets with indefinite lives $ 10,142 $ 10,142 Intangible assets with definite lives, net 31,834 33,141 Total intangible assets, net $ 41,976 $ 43,283 Goodwill and Indefinite-Lived Intangible Assets The Company's goodwill at each of March 31, 2025 and December 31, 2024 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 monitors each of the reporting units and the impact of business or economic changes on the fair value of the reporting unit. Changes in the timing of the recovery of the mortgage business, inflation, interest rates and other changes in current expectations could cause an impairment to the Insurance, Mortgage, or Consumer reporting units. Intangible assets with indefinite lives relate to the Company's trademarks. Intangible Assets with Definite Lives Intangible assets with definite lives relate to the following (in thousands) : Cost Accumulated Amortization Net Customer lists 69,700 ( 37,866 ) 31,834 Balance at March 31, 2025 $ 69,700 $ ( 37,866 ) $ 31,834 10 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Cost Accumulated Amortization Net Customer lists $ 69,700 $ ( 36,559 ) $ 33,141 Balance at December 31, 2024 $ 69,700 $ ( 36,559 ) $ 33,141 Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of March 31, 2025, future amortization is estimated to be as follows (in thousands) : Amortization Expense Remainder of current year $ 3,883 Year ending December 31, 2026 5,092 Year ending December 31, 2027 4,948 Year ending December 31, 2028 4,539 Year ending December 31, 2029 2,767 Thereafter 10,605 Total intangible assets with definite lives, net $ 31,834 NOTE 6— ASSETS HELD FOR SALE In the first quarter of 2025, the Company approved a plan to sell its corporate aircraft. The aircraft is expected to be sold during 2025 to an unrelated third party. The carrying value of the asset group is $ 1.2 million (net of $ 1.6 million of accumulated depreciation) and is classified as a current asset held for sale in the consolidated balance sheet as of March 31, 2025. The aircraft relates to property, plant and equipment. NOTE 7— ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following (in thousands) : March 31, 2025 December 31, 2024 Accrued advertising expense $ 51,802 $ 59,381 Accrued compensation and benefits 9,426 23,504 Accrued professional fees 969 1,311 Customer deposits and escrows 7,749 7,673 Current lease liabilities 5,924 5,799 Accrued contingencies 19,071 3,868 Other 5,529 5,649 Total accrued expenses and other current liabilities $ 100,470 $ 107,185 NOTE 8— SHAREHOLDERS' EQUITY Basic and diluted income per share was determined based on the following share data (in thousands) : Three Months Ended March 31, 2025 2024 Weighted average basic common shares 13,441 13,100 Effect of stock options — 61 Effect of dilutive share awards — 115 Weighted average diluted common shares 13,441 13,276 11 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the first quarter of 2025, 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. Approximately 0.2 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the first quarter of 2025, because their inclusion would have been anti-dilutive. For the first quarter of 2025 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 an immaterial amount of restricted stock units. For the first 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 0.3 million restricted stock units. The convertible notes and the warrants issued by the Company could be converted or exercised, respectively, for the Company’s common stock, subject to certain contingencies. See Note 11—Debt for additional information. The if-converted method is used for diluted net income per share calculation of our convertible notes. Approximately 0.3 million shares related to the potentially dilutive shares of the Company's common stock associated with the 0.50 % Convertible Senior Notes due July 15, 2025 were excluded from the calculation of diluted loss per share for the first quarter of 2025 because their inclusion would have been anti-dilutive. Approximately 0.6 million shares related to the potentially dilutive shares of the Company's common stock associated with the 0.50 % Convertible Senior Notes due July 15, 2025 for the first quarter of 2024 were excluded from the calculation of diluted income per share because their inclusion would have been anti-dilutive. Shares of the Company's stock associated with the warrants issued by the Company in 2020 were excluded from the calculation of diluted loss per share for the first quarter of 2025 and for the first quarter of 2024, as they were anti-dilutive because 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 March 31, 2025. Common Stock Repurchases The Company has a plan authorized for the repurchase of LendingTree's common stock. During the first quarter of 2025 and the first quarter of 2024, the Company did no t repurchase shares of its common stock. At March 31, 2025, approximately $ 96.7 million of the previous authorizations to repurchase common stock remain available. NOTE 9— STOCK-BASED COMPENSATION Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands) : Three Months Ended March 31, 2025 2024 Cost of revenue $ ( 30 ) $ 95 Selling and marketing expense 657 1,024 General and administrative expense 8,371 5,333 Product development 869 1,337 Restructuring and severance 60 — Total non-cash compensation $ 9,927 $ 7,789 12 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Stock Options A summary of changes in outstanding stock options is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (a) (per option) (in years) (in thousands) Options outstanding at January 1, 2025 371,386 $ 226.17 Granted — — Exercised — — Forfeited — — Expired — — Options outstanding at March 31, 2025 371,386 226.17 5.35 $ — Options exercisable at March 31, 2025 329,434 $ 216.77 5.31 $ — (a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $ 50.27 on the last trading day of the quarter ended March 31, 2025 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 March 31, 2025. The intrinsic value changes based on the market value of the Company's common stock. Stock Options with Market Conditions A summary of changes in outstanding stock options with market conditions at target is as follows: Number of Options with Market Conditions Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (a) (per option) (in years) (in thousands) Options outstanding at January 1, 2025 699,312 $ 227.74 Granted — — Exercised — — Forfeited — — Expired ( 217,643 ) 300.00 Options outstanding at March 31, 2025 481,669 195.10 2.35 $ — Options exercisable at March 31, 2025 481,669 $ 195.10 2.35 $ — (a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $ 50.27 on the last trading day of the quarter ended March 31, 2025 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 March 31, 2025. The intrinsic value changes based on the market value of the Company's common stock. As of March 31, 2025, no additional performance-based nonqualified stock options with a market condition had been earned or remain available to be earned. 13 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Restricted Stock Units A summary of changes in outstanding nonvested restricted stock units (“RSUs”) is as follows: RSUs Number of Units Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2025 569,460 $ 46.37 Granted 486,090 42.18 Vested ( 207,833 ) 55.32 Forfeited ( 10,551 ) 45.01 Nonvested at March 31, 2025 837,166 $ 41.73 Restricted Stock Units with Market Conditions A summary of changes in outstanding nonvested RSUs with performance conditions is as follows: RSUs with Market Conditions Number of Units Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2025 46,000 $ 35.24 Granted (a) 100,000 34.11 Vested — — Forfeited — — Nonvested at March 31, 2025 146,000 $ 34.46 (a) During the three months ended March 31, 2025, the Company granted RSUs with market conditions that will vest if the Company's 90 trading day average closing stock prices equals or exceeds certain price hurdles ($ 60.00 , $ 75.00 and $ 90.00 ) during the performance period of March 10, 2025 to March 10, 2029. 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. For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the RSUs with market conditions was estimated using the Monte Carlo simulation model, which requires the use of various key assumptions. Three Months Ended March 31, 2025 2024 Expected term (1) 4.00 years 5.00 years Expected volatility (2) 74.09 % 68.06 % Risk-free interest rate (3) 3.91 % 4.13 % Expected dividend (4) — — (1) The expected term of RSUs with market conditions granted was calculated using the respective performance period plus any time-based vesting requirement. (2) The expected volatility rate is based on the historical volatility of the Company's common stock. (3) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date. 14 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (4) For all RSUs with market conditions granted, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate. Employee Stock Purchase Plan 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 March 31, 2025, 116,574 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. Under the terms of the ESPP, eligible employees are granted options to purchase shares of the Company's common stock at 85 % of the lesser of (1) the fair market value at time of grant or (2) the fair market value at time of exercise. The offering periods and purchase periods are typically six-month periods ending on June 30 and December 31 of each year. No shares were issued under the ESPP during the three months ended March 31, 2025. During the three months ended March 31, 2025 and 2024, the Company granted employee stock purchase rights to certain employees with a grant date fair value per share of $ 13.70 and $ 11.27 , 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: Three Months Ended March 31, 2025 2024 Expected term (1) 0.50 years 0.50 years Expected dividend (2) — — Expected volatility (3) 71 % 82 % Risk-free interest rate (4) 4.24 % 5.28 % (1) The expected term was calculated using the time period between the grant date and the purchase date. (2) No dividends are expected to be paid, resulting in a zero expected dividend rate. (3) The expected volatility rate is based on the historical volatility of the Company's common stock. (4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the employee stock purchase rights, in effect at the grant date. NOTE 10— INCOME TAXES Three Months Ended March 31, 2025 2024 (in thousands, except percentages) Income tax benefit (expense) $ 2,430 $ ( 559 ) Effective tax rate 16.4 % 35.5 % For the first quarter of 2025 and the first quarter of 2024, 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. NOTE 11— DEBT Convertible Senior Notes 2025 Notes On July 24, 2020, the Company issued $ 575.0 million aggregate principal amount of its 0.50 % Convertible Senior Notes due July 15, 2025 (the “2025 Notes”) in a private placement. The 2025 Notes bear interest at a rate of 0.50 % per year, payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2021. The 2025 Notes will mature on July 15, 15 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2025, unless earlier repurchased, redeemed or converted. The initial conversion rate of the 2025 Notes is 2.1683 shares of the Company's common stock per $1,000 principal amount of 2025 Notes (which is equivalent to an initial conversion price of approximately $ 461.19 per share). In the first quarter of 2025, the Company repurchased approximately $ 20.0 million of its 2025 Notes, through individual privately-negotiated transactions with certain holders of the 2025 Notes, for $ 19.7 million in cash plus an immaterial amount of accrued and unpaid interest. The repurchase resulted in a $ 0.3 million gain on the extinguishment of debt which is included in interest expense, net in the consolidated statement of operations and comprehensive income. During 2023 and 2024, the Company repurchased $ 459.7 million in principal amount of the 2025 Notes. The remaining balance outstanding on the 2025 Notes as of March 31, 2025 is $ 95.3 million and will mature in July 2025. Holders of the 2025 Notes were not entitled to convert the 2025 Notes during the calendar quarter ended March 31, 2025 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 December 31, 2024, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day. Under the terms of the 2025 Notes, on or after March 13, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2025 Notes, holders of the 2025 Notes may convert all or a portion of their 2025 Notes regardless of the foregoing conditions. There have been no conversions in the first quarter of 2025. In the first three months of 2025, the Company recorded interest expense on the 2025 Notes of $ 0.2 million which consisted of $ 0.1 million associated with the 0.50 % coupon rate and $ 0.1 million associated with the amortization of the debt issuance costs. In the first three months of 2024, the Company recorded interest expense on the 2025 Notes of $ 0.8 million which consisted of $ 0.4 million associated with the 0.50 % coupon rate and $ 0.4 million associated with the amortization of the debt issuance costs. As of March 31, 2025, the fair value of the 2025 Notes is estimated to be approximately $ 90.7 million using the Level 1 observable input of the last quoted market price on March 31, 2025. A summary of the gross carrying amount, debt issuance costs, and net carrying value of the 2025 Notes, all of which is recorded as a current liability in the March 31, 2025 consolidated balance sheet, are as follows (in thousands) : March 31, 2025 December 31, 2024 Gross carrying amount $ 95,307 $ 115,307 Debt issuance costs 147 331 Net carrying amount $ 95,160 $ 114,976 The Company intends to use cash on hand and future cash flows from operations for the repayment of the $ 95.3 million outstanding principal amount of its 2025 Notes. Convertible Note Hedge and Warrant Transactions 2020 Hedge and Warrants On July 24, 2020, in connection with the issuance of the 2025 Notes, the Company entered into Convertible Note Hedge (the “2020 Hedge”) and warrant transactions with respect to the Company’s common stock. The 2020 Hedge transactions cover 1.2 million shares of the Company’s common stock, the same number of shares initially underlying the 2025 Notes, and are exercisable upon any conversion of the 2025 Notes. The 2020 Hedge transactions are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of the 2025 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2025 Notes, as the case may be, in the event that the market price per share of common stock, as measured under the terms of the 2020 Hedge transactions, is greater than the strike price of the 2020 Hedge transactions, which initially corresponds to the initial conversion price of the 2025 Notes, or approximately $ 461.19 per share of common stock. The 2020 Hedge transactions will expire upon the maturity of the 2025 Notes. 16 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) On July 24, 2020, the Company sold to the counterparties, warrants (the “2020 Warrants”) to acquire 1.2 million shares of the Company's common stock at an initial strike price of $ 709.52 per share, which represents a premium of 100 % over the last reported sale price of the common stock of $ 354.76 on July 21, 2020. If the market price per share of the common stock, as measured under the terms of the 2020 Warrants, exceeds the strike price of the 2020 Warrants, the 2020 Warrants could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the 2020 Warrants in cash. As of March 31, 2025, the outstanding portion of the 2020 Hedge covers 0.2 million shares of the Company's common stock and the 2020 Warrants to acquire 0.2 million shares of the Company's common stock remain outstanding. 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 March 31, 2025, the Company had $ 243.1 million of borrowings outstanding under the 2021 Term Loan bearing interest at the SOFR option rate of 8.4 % and had no borrowings under the Revolving Facility. As of December 31, 2024, the Company had $ 243.8 million of borrowings outstanding under the 2021 Term Loan and no borrowings under the Revolving Facility. As of March 31, 2025, borrowings of $ 2.5 million under the 2021 Term Loan are recorded as current portion of long-term debt on the consolidated balance sheet. The Company was in compliance with all covenants at March 31, 2025. In the first three months of 2025, the Company recorded interest expense related to its Revolving Facility of $ 0.5 million which consisted of $ 0.3 million in unused commitment fees and $ 0.2 million associated with the amortization of the debt issuance costs. In the first three months of 2025, the Company recorded interest expense related to the 2021 Term Loan of $ 5.1 million associated with borrowings bearing interest at the SOFR option rate. In the first three months of 2024, the Company recorded interest expense related to its Revolving Facility of $ 0.4 million which consisted of $ 0.2 million in unused commitment fees and $ 0.2 million associated with the amortization of the debt issuance costs. In the first three months of 2024, the Company recorded interest expense related to the 2021 Term Loan of $5.7 million associated with borrowings bearing interest at the SOFR option rate. 2024 Term Loan On March 27, 2024, the Company entered into a $ 175.0 million first lien term loan facility (the “2024 Term Loan”), which matures on March 27, 2031. The Company drew $ 125.0 million of the 2024 Term Loan upon closing and drew the remaining $ 50.0 million delayed draw term loan on March 27, 2025. The Company incurred fees of $ 0.5 million in the first quarter of 2025 in connection with the $ 50.0 million delayed draw. As of March 31, 2025, the Company had $ 162.5 million borrowings outstanding under the 2024 Term Loan bearing interest based on the SOFR rate of 10.07 %. As of December 31, 2024, the Company had $ 115.6 million of borrowings outstanding under the 2024 Term Loan. As of March 31, 2025, borrowings of $ 8.8 million under the 2024 Term Loan are recorded as current portion of long-term debt on the consolidated balance sheet. The Company was in compliance with all covenants at March 31, 2025. In the first three months of 2025, the Company recorded interest expense related to the 2024 Term Loan of $ 3.4 million which consisted of $ 3.0 million associated with borrowings bearing interest based on the SOFR rate, $ 0.2 million associated with unused commitment fees, $ 0.1 million associated with the amortization of debt issuance costs, and $ 0.1 million associated with the accretion of the original issue discount. In the first three months of 2024, the Company recorded interest expense related to the 2024 Term Loan of $ 0.2 million which consisted of $ 0.2 million associated with borrowings bearing interest based on the SOFR rate and immaterial amounts associated with unused commitment fees, the amortization of debt issuance costs, and accretion of the original issue discount. 17 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A summary of the gross carrying amount, debt issuance costs, original issue discount, and net carrying value of the 2024 Term Loan in the March 31, 2025 consolidated balance sheet, are as follows (in thousands) : March 31, 2025 Current Portion Gross carrying amount $ 8,750 Debt issuance costs 234 Unamortized original issue discount 149 Net carrying amount $ 8,367 Long-term Portion Gross carrying amount $ 153,750 Debt issuance costs 4,173 Unamortized original issue discount 2,541 Net carrying amount $ 147,036 NOTE 12— CONTINGENCIES Overview LendingTree is involved in legal proceedings on an ongoing basis. In assessing the materiality of a legal proceeding, the Company evaluates, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require it to change its business practices in a manner that could have a material and adverse impact on the Company's business. With respect to the matters disclosed in this Note 12, 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. In the ordinary course of business, we are party to litigation involving property, contract, intellectual property and a variety of other claims. The amounts that may be incurred in such matters may be subject to insurance coverage. As of March 31, 2025 and December 31, 2024, the Company had litigation settlement accruals of $ 19.1 million and $ 3.9 million, respectively. The litigation settlement accruals relate to litigation matters that were either settled or 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. Legal Matters On or about October 29, 2019, Joseph Mantha filed a class action lawsuit against QuoteWizard.com, LLC alleging claims in violation of the Telephone Consumer Protection Act. On August 16, 2024, the U.S. District Court of Massachusetts granted the plaintiff’s motion to certify a class. A trial date has been set for November of 2025. The Company participated in a mediation in April 2025 and reached a preliminary agreement on the terms of settlement. The settlement is not final and is subject to approval by the court. An estimated liability of $ 19.0 million for this matter is included in the accompanying consolidated balance sheet as of March 31, 2025. The settlement is payable in three equal installments, with the first payment due in the fourth quarter of 2025, the second payment due in the first quarter of 2026 and the final payment due in the second quarter of 2026. NOTE 13— FAIR VALUE MEASUREMENTS Other than the convertible notes and warrants, and the equity investments, the carrying amounts of the Company's financial instruments are equal to fair value at March 31, 2025. See Note 11—Debt for additional information on the convertible notes and warrants. 18 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 14— SEGMENT INFORMATION The Company manages its business and reports its financial results through the following three operating and reportable segments: Home, Consumer, and Insurance. Characteristics which were relied upon in making the determination of the reportable segments include the nature of the products, the organization's internal structure, and the information that is regularly reviewed by the chief operating decision maker, the Company's Chief Executive Officer, for the purpose of assessing performance and allocating resources. The Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and lines of credit. The Consumer segment includes the following products: credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products. The Company ceased offering its student loan product in the first quarter of 2025. The Insurance segment consists of insurance quote products and sales of insurance policies in the agency businesses. The following tables are a reconciliation of segment profit, which is the Company's primary segment profitability measure, to income before income taxes. Segment marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses, that are directly attributable to the segments' products. This measure excludes overhead, fixed costs and personnel-related expenses. Three Months Ended March 31, 2025 Home Consumer Insurance Other Total (in thousands) Revenue $ 37,019 $ 56,033 $ 146,652 $ 24 $ 239,728 Segment marketing expense 23,873 28,896 107,942 36 160,747 Segment profit (loss) 13,146 27,137 38,710 ( 12 ) 78,981 Cost of revenue 9,908 Brand and other marketing expense 12,004 General and administrative expense 30,660 Product development 11,904 Depreciation 4,297 Amortization of intangibles 1,307 Restructuring and severance 798 Litigation settlements and contingencies 15,212 Operating loss ( 7,109 ) Interest expense, net ( 9,084 ) Other income 1,388 Loss before income taxes $ ( 14,805 ) 19 Table of Contents LENDINGTREE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Three Months Ended March 31, 2024 Home Consumer Insurance Other Total (in thousands) Revenue $ 30,443 $ 51,451 $ 85,872 $ 2 $ 167,768 Segment marketing expense 20,833 24,011 52,423 ( 21 ) 97,246 Segment profit 9,610 27,440 33,449 23 70,522 Cost of revenue 8,545 Brand and other marketing expense 10,930 General and administrative expense 25,796 Product development 11,857 Depreciation 4,667 Amortization of intangibles 1,489 Restructuring and severance 23 Litigation settlements and contingencies 36 Operating income 7,179 Interest expense, net ( 6,638 ) Other income 1,034 Income before income taxes $ 1,575 The CODM does not review information on segment assets and as such, no segment asset information is reported herein. 20 Table of Contents