What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-01 compared with 2025-05-05 · 140 added, 135 removed, 252 unchanged (52% of the section changed)

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We operate what we believe to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions.

Our online consumer platform provides consumers with access to product offerings from our Network Partners, including 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.

In addition, we offer consumers tools and resources, including free credit scores, that facilitate comparison shopping for loans, deposit products, insurance, and other offerings.

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“Risk Factors” of our 2024 Annual Report for additional information.

During the first quarter of 2025, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending partners.

In our Home segment, mortgage rates have remained relatively consistent in the first quarter of 2025 compared to the fourth quarter of 2024 and the first quarter of 2024, but nearly doubled compared to the first quarter of 2022.

During 2025, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending partners.

In our Home segment, mortgage rates have remained relatively consistent in the second quarter of 2025 compared to the fourth quarter of 2024 and second quarter of 2024, but significantly increased compared to the second quarter of 2022.

The increased mortgage rates continue to cause reduced refinance volumes and continue to put pressure on purchase activity.

In our Insurance segment, demand from our carrier partners remain at relatively elevated levels and we continue to be optimistic about 2025.

In our Insurance segment, demand from our carrier partners remain at relatively elevated levels and we continue to be optimistic about the remainder of 2025.

Segment Reporting

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Consumer demand, in turn, affects lender demand for mortgage leads from third-party sources, as well as our own ability to attract online consumers to our website.

Typically, when interest rates decline, we see increased consumer demand for mortgage refinancings, which in turn leads to increased traffic to our website and decreased selling and marketing efforts associated with that traffic.

Typically, when interest rates decline, we see increased consumer demand for mortgage refinancing, which in turn leads to increased traffic to our website and decreased selling and marketing efforts associated with that traffic.

At the same time, lender demand for leads from third-party sources typically decreases, as there are more consumers in the marketplace seeking refinancings and, accordingly, lenders receive more organic mortgage lead volume.

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We dynamically adjust selling and marketing expenditures in all interest rate environments to optimize our results against these variables.

According to Freddie Mac, the monthly average 30-year mortgage interest rates decreased from 6.72% in December 2024 to 6.65% in March 2025.

On a quarterly basis, 30-year mortgage interest rates increased in the first quarter of 2025 to an average 6.82%, from 6.65% in the fourth quarter of 2024.

The quarterly average was up slightly in the first quarter of 2025 compared to 6.75% in the first quarter of 2024.

According to Freddie Mac, the monthly average 30-year mortgage interest rates increased from a monthly average of 6.72% in December 2024 to a monthly average of 6.82% in June 2025.

On a quarterly basis, 30-year mortgage interest rates in the second quarter of 2025 averaged 6.79%, compared to 6.99% in the second quarter of 2024 and 6.65% in the fourth quarter of 2024.

Typically, as mortgage interest rates rise, there are fewer consumers in the marketplace seeking refinancings and, accordingly, the mix of mortgage origination dollars will move toward purchase mortgages.

According to Mortgage Bankers Association (“MBA”) data, total refinance origination dollars decreased to 29% of total mortgage origination dollars in the first quarter of 2025 compared to 38% in the fourth quarter of 2024 and increased from 23% in the first quarter of 2024.

In the first quarter of 2025, total refinance origination dollars decreased 41% from the fourth quarter of 2024 and increased 30% from the first quarter of 2024.

Industry-wide mortgage origination dollars in the first quarter of 2025 decreased 22% from the fourth quarter of 2024, but increased 2% from first quarter of 2024.

According to Mortgage Bankers Association (“MBA”) data, total refinance origination dollars decreased to 33% of total mortgage origination dollars in the second quarter of 2025 compared to 38% in the fourth quarter of 2024 and increased when compared to 22% in the second quarter of 2024.

In the second quarter of 2025, total refinance origination dollars decreased 4% from the fourth quarter of 2024 and increased 96% from the second quarter of 2024.

Industry-wide mortgage origination dollars in the second quarter of 2025 increased 11% from the fourth quarter of 2024 and increased 28% from second quarter of 2024.

According to MBA projections, the mix of mortgage origination dollars is expected to continue to be weighted towards purchase mortgages with the refinance share representing approximately 33% for 2025 compared to 28% in 2024.

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Conversely, a weaker real estate market will typically lead to an increase in lender demand, as there are fewer consumers in the marketplace seeking mortgages.

According to Fannie Mae data, existing home sales increased 1% in the first quarter of 2025 compared to the fourth quarter of 2024, and increased 1% compared to the first quarter of 2024.

According to Fannie Mae data, existing home sales decreased approximately 3% in the second quarter of 2025 compared to the fourth quarter of 2024, and increased approximately 1% compared to the second quarter of 2024.

Fannie Mae predicts an overall increase in existing-home sales of approximately 3% in 2025 compared to 2024.

We consider certain metrics related to LendingTree Spring ("Spring") set forth below to help us evaluate our business and growth trends and assess operational efficiencies.

We consider certain metrics related to LendingTree Spring TM ("Spring") set forth below to help us evaluate our business and growth trends and assess operational efficiencies.

We believe our Spring platform drives repeat user engagement resulting in lower acquisition costs and increases consumer lifetime value.

The calculation of the metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts or investors.

We added 0.8 million new users in the first quarter of 2025, bringing cumulative sign-ups to 32.1 million at March 31, 2025.

We added 0.5 million net new users in the second quarter of 2025, bringing cumulative active users to 32.6 million as of June 30, 2025.

We calculate the number of Spring users at a period end as the number of users that had an active account at any point during the quarter that includes the period end date.

Users that deactivated their accounts prior to the most recent quarter are no longer considered in the user base at the end of the most recent quarter.

We attribute approximately $3.7 million of revenue, or 2% of total revenue, in the first quarter of 2025 to registered Spring users who initiated their transaction from the Spring platform.

During the first quarter of 2025, approximately 0.2 million Spring users initiated a transaction from the Spring platform that contributed to revenue.

Debt Activity

In March 2025, we drew $50.0 million on our 2024 Term Loan (as defined below) delayed draw facility and incurred fees of $0.5 million associated with the borrowing.

Additionally, we repurchased $20.0 million in principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 ("2025 Notes"), through individual privately-negotiated transactions with certain holders of such notes, for approximately $19.7 million in cash plus accrued and unpaid interest.

Results of Operations for the Three Months ended March 31, 2025 and 2024

We attribute approximately $4.9 million of revenue, or 2% of total revenue, in the second quarter of 2025 to registered Spring users who initiated their transaction from the Spring platform.

During the second quarter of 2025, approximately 0.3 million Spring users initiated a transaction from the Spring platform that contributed to revenue.

Convertible Note Maturity

On July 15, 2025 we repaid the $95.3 million outstanding principal amount of our 0.50% Convertible Senior Notes ("2025 Notes") upon maturity in cash plus $0.2 million of accrued interest.

Upon this repayment, the 2025 Notes were extinguished and repaid in full and the Company has no further obligations with respect to the 2025 Notes.

Results of Operations for the Three and Six Months ended June 30, 2025 and 2024

Our discussion within Revenue provides the details of consolidated revenue by segment and significant products.

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In Segment Profit, we provide a discussion of the business within each segment, addressing both Company and market impacts on the profitability of each segment in addition to a discussion of segment margin.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Change 2025 2024 $

(Dollars in thousands)

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Total costs and expenses 229,192 200,553 28,639 14 % 476,029 361,142 114,887 32 %

Operating (loss) income (7,109) 7,179 (14,288) (199) %

Operating income 20,924 9,587 11,337 118 % 13,815 16,766 (2,951) (18) %

Other income (expense), net:

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Other income 248 1,052 (804) (76) % 1,636 2,086 (450) (22) %

(Loss) income before income taxes (14,805) 1,575 (16,380) (1,040) %

Income tax benefit (expense) 2,430 (559) (2,989) (535) %

Net (loss) income and comprehensive (loss) income $ (12,375) $ 1,016 $ (13,391) (1,318) %

Revenue increased in the first quarter of 2025 compared to the first quarter of 2024 due to increases in our Insurance, Home and Consumer segments.

Revenue from our Insurance segment increased $60.8 million, or 71%, to $146.7 million in the first quarter of 2025 from $85.9 million in the first quarter of 2024.

The increase in revenue was due to a 41% increase in revenue earned per consumer, representing $34.8 million of the increase and a 22% increase in volume, representing $26.0 million of the increase.

We measure volume for insurance product as the number of consumer request forms and in certain cases of re-engagement with a consumer, the number of subsequent consumer engagements through our platform.

Our Home segment includes the following products:

Income (loss) before income taxes 10,770 9,438 1,332 14 % (4,035) 11,013 (15,048) (137) %

Income tax (expense) benefit (1,908) (1,686) 222 13 % 522 (2,245) (2,767) (123) %

Net income (loss) and comprehensive income (loss) $ 8,862 $ 7,752 $ 1,110 14 % $ (3,513) $ 8,768 $ (12,281) (140) %

Revenue increased in the second quarter and first six months of 2025 compared to the second quarter and first six months of 2024 due to increases in our Insurance, Home and Consumers segments.

Revenue from our Insurance segment increased $25.1 million, or 21%, to $147.2 million in the second quarter of 2025 from $122.1 million in the second quarter of 2024.

The increase in revenue was due to a 19% increase in volume, representing $23.2 million of the increase, and a 2% increase in revenue earned per consumer, representing $1.9 million of the increase.

Revenue from our Insurance segment increased $85.9 million, or 41%, to $293.8 million in the first six months of 2025 from $207.9 million in the first six months of 2024.

The increase in revenue was due to a 20% increase in volume, representing $49.5 million of the increase, and a 17% increase in revenue earned per consumer, representing $36.4 million of the increase.

We measure volume for our insurance product as the number of consumer request forms and, in certain cases re-engagement with a consumer, the number of such subsequent consumer engagements through our platform.

Our Home se gment includes the following products:

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

Revenue from our Home segment increased $6.6 million, or 22%, in the first quarter of 2025 from the first quarter of 2024 due to increases in revenue from our home equity loans and mortgage products.

Revenue from our home equity loans and lines of credit product increased $5.0 million, or 24%, to $25.8 million in the first quarter of 2025 from $20.8 million in the first quarter of 2024.

The increase in revenue was due to a 50% increase in volume,

representing an increase of $8.6 million, partially offset by a 17% decrease in revenue earner per consumer, representing a decrease of $3.6 million.

We measure volume for our home equity loans and lines of credit as the number of consumers completing request forms.

Revenue from our mortgage products increased $1.6 million, or 16%, to $11.2 million in the first quarter of 2025 from $9.6 million in the first quarter of 2024.

The increase in revenue was due to our refinance mortgage product which increased $1.6 million in the first quarter of 2025 compared to the first quarter of 2024 due to increases in the number of consumers completing request forms and an increase in revenue earned per consumer.

While we experienced a slight increase in mortgage revenue, increased mortgage rates continue to cause reduced refinance volumes and continue to put pressure on purchase activity.

We measure volume for our mortgage products as the number of consumers completing request forms.

Revenue from our Home segment increased $8.3 million, or 26%, in the second quarter of 2025 from the second quarter of 2024 and increased $14.8 million, or 24%, in the first six months of 2025 from the first six months of 2024 primarily due to increases in revenue from our home equity loans.

Revenue from our home equity loans product increased $8.3 million, or 38%, to $30.3 million in the second quarter of 2025 from $22.0 million in the second quarter of 2024.

The increase in revenue was due to a 65% increase in volume, representing $11.9 million of the increase, partially offset by a 16% decrease in revenue earned per consumer, representing a $3.6 million decrease.

Revenue from our home equity loans product increased $13.3 million, or 31%, to $56.1 million in the first six months of 2025 from $42.8 million in the first six months of 2024.

The increase in revenue was due to a 57% increase in volume, representing $20.4 million of the increase, partially offset by a 16% decrease in revenue earned per consumer, representing a $7.1 million decrease.

We measure volume for our home equity loans and lines of credit products as the number of consumers completing request forms.

Our Consumer segment includes the following products:

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Many of our Consumer segment products are not individually significant to revenue.

Revenue from our Consumer segment increased $4.6 million, or 9%, in the first quarter of 2025 from the first quarter of 2024 primarily due to increases in our personal loans and small business loans products, partially offset by decreases in our credit cards and other credit products.

Revenue from our personal loans product increased $3.3 million, or 16%, to $23.4 million in the first quarter of 2025 from $20.1 million in the first quarter of 2024.

The increase in revenue was due to a 36% increase in volume, representing $6.2 million of an increase, partially offset by a 14% decrease in revenue earned per consumer, representing $2.9 million of a decrease.

Revenue from our Consumer segment increased $6.6 million, or 12%, in the second quarter of 2025 from the second quarter of 2024 primarily due to increases in our small business loans and personal loans products, partially offset by decreases in credit cards and other credit products.

Revenue from our Consumer segment increased $11.2 million, or 10%, in the first six months of 2025 from the first six months of 2024 primarily due to increases in our small business loans and personal loans products, partially offset by decreases in credit cards and other credit products.

Revenue from our personal loans product increased $3.7 million, or 14%, to $30.6 million in the second quarter of 2025 from $26.9 million in the second quarter of 2024.

The increase in revenue was due to an 18% increase in volume, representing an increase of $4.6 million, partially offset by a 3% decrease in revenue earned per consumer, representing a $0.9 million decrease.

Revenue from our personal loans product increased $7.0 million, or 15%, to $54.0 million in the first six months of 2025 from $47.1 million in the first six months of 2024.

The increase in revenue was due to a 25% increase in volume, representing $10.8 million of the increase, partially offset by an 8% decrease in revenue earned per consumer, representing $3.8 million of a decrease.

We measure volume for our personal loans product as the number of unique consumers completing request forms.

For the periods presented, no other products in our Consumer segment represented more than 10% of revenue;

For the current periods, no other products in our Consumer segment represented more than 10% of revenue;

however, certain other Consumer products experienced notable changes.

Revenue from small business increased $6.4 million, or 48%, in the first quarter of 2025 compared to the first quarter of 2024 due increases in the number of consumers completing request forms and in revenue earned per consumer.

Revenue from credit cards decreased $3.7 million, or 48%, in the first quarter of 2025 compared to the first quarter of 2024 primarily due to decreases in the number of consumer clicks and revenue earned per click.

Revenue from other credit products decreased $1.2 million, or 31%, in the first quarter of 2025 compared to the first quarter of 2024 due to a decrease in revenue earned per consumer.

Revenue from our small business loans product increased $7.3 million, or 61%, in the second quarter of 2025 compared to the second quarter of 2024, and increased $13.7 million, or 54% in the first six months of 2025 compared to the first six months of 2024 due to increases in the number of consumers completing request forms and in revenue earned per consumer.

Revenue from our credit cards product decreased $2.3 million, or 41%, in the second quarter of 2025 compared to the second quarter of 2024, and decreased $6.0 million, or 45%, in the first six months of 2025 compared to the first six months of 2024 due to decreases in the number of consumer clicks and revenue earned per click.

Revenue from our other credit products decreased $1.7 million, or 29%, in the second quarter of 2025 compared to the second quarter of 2024, and decreased $2.9 million, or 30%, in the first six months of 2025 compared to the first six months of 2024 primarily due to a decrease in revenue earned per consumer.

Cost of revenue

Cost of revenue consists primarily of costs associated with compensation and other employee-related costs (including stock-based compensation) relating to internally-operated customer call centers, third-party customer call center fees, credit scoring fees, credit card fees, website network hosting, and server fees.

Cost of revenue increased in the first quarter of 2025 from the first quarter of 2024 by $1.4 million, primarily due to an increase in compensation and benefits of $0.9 million.

Cost of revenue as a percentage of revenue decreased to 4% in the first quarter of 2025 compared to 5% in the first quarter of 2024.

Cost of revenue increased $1.6 million in the second quarter of 2025 from the second quarter of 2024 primarily due to an increase in compensation and benefits of $1.3 million.

Cost of revenue increased $3.0 million in the first six months of 2025 from the first six months of 2024 primarily due to an increase in compensation and benefits of $2.2 million.

Cost of revenue as a percentage of revenue was 4% in the second quarter and first six months of 2025 which is consistent to the second quarter and the first six months of 2024.

Selling and marketing expense

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Advertising production costs are expensed in the period the related ad is first run.

Selling and marketing expense increased in the first quarter of 2025 compared to the first quarter 2024 by $64.6 million primarily due to the changes in advertising and promotional expense discussed below.

Additionally, compensation and benefits increased $0.9 million in the first quarter of 2025 compared to the first quarter 2024.

Selling and marketing expense increased in the second quarter of 2025 compared to the second quarter 2024 by $28.4 million, and increased $92.9 million in the first six months of 2025 compared to the first six months of 2024 primarily due to the changes in advertising and promotional expense discussed below.

Additionally, compensation and benefits increased $1.1 million in the second quarter of 2025 compared to the second quarter of 2024, and increased $2.0 million in the first six months of 2025 compared to the first six months of 2024.

Advertising and promotional expense is the largest component of selling and marketing expense, and is comprised of the following:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Change 2025 2024 $

(Dollars in thousands)

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This relationship exists for our Home, Consumer, and Insurance segments.

We adjusted our advertising expenditures in the first quarter of 2025 compared to the first quarter of 2024 in response to changes in Network Partner demand on our marketplace.

We adjusted our advertising expenditures in the second quarter and first six months of 2025 compared to the second quarter and first six months of 2024 in response to changes in Network Partner demand on our marketplace.

We will continue to adjust selling and marketing expenditures dynamically in response to anticipated revenue opportunities.

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General and administrative expense consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in finance, legal, tax, corporate information technology, human resources and executive management functions, as well as facilities and infrastructure costs and fees for professional services.

General and administrative expense increased $4.9 million in the first quarter of 2025 compared to the first quarter of 2024.

Compensation and benefits increased in the first quarter of 2025 compared to the first quarter of 2024 by $4.8 million, primarily due to an increase in non-cash compensation of $3.0 million.

For additional information, see Note—9-Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report.

Non-cash compensation expense is excluded from Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), as discussed below.

General and administrative expense as a percentage of revenue in the first quarter of 2025 was 13% compared to 15% for the first quarter of 2024.

General and administrative expense decreased $2.1 million in the second quarter of 2025 from the second quarter of 2024 primarily due decreases of $0.8 million professional fees and $0.4 million in loss on asset disposals.

General and administrative expense increased $2.8 million in the first six months of 2025 from the first six months of 2024 primarily due to an increase in compensation and benefits of $4.5 million, partially offset by a decrease in professional fees of $0.8 million and a decrease in loss on asset disposals of $0.5 million.

General and administrative expense as a percentage of revenue decreased to 10% in the second quarter of 2025 compared to 13% in the second quarter of 2024, and decreased to 11% in the first six months of 2025 compared to 14% in the first six months of 2024.

Product development

Product development expense consists primarily of compensation and other employee-related costs (including stock-based compensation) and third-party labor costs that are not capitalized, for employees and consultants engaged in the design, development, testing and enhancement of technology.

Product development expense remained consistent in the first quarter of 2025 compared to the first quarter of 2024 as we continued to invest in internal development of new and enhanced features, functionality and business opportunities that we believe will enable us to better and more fully serve consumers and Network Partners.

Product development expense increased $1.1 million in the second quarter of 2025 compared to the second quarter of 2024 as we continued to invest in internal development of new and enhanced features, functionality and business opportunities that we believe will enable us to better and more fully serve consumers and Network Partners.

Litigation Settlements and Contingencies

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Interest expense, net

In March 2024 and March 2025, we drew $125.0 million and $50.0 million, respectively, on the 2024 Term Loan and incurred $3.4 million of interest expense in the first quarter of 2025 as a result of the 2024 Term Loan.

In March 2024 and March 2025, we drew $125.0 million and $50.0 million, respectively, on the 2024 Term Loan resulting in an increase of $0.4 million and $3.6 million of interest expense in the second quarter and first six months of 2025, respectively, compared to the second quarter and the first six months of 2024.

In the first quarter of 2025, we repurchased approximately $20.0 million in principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 (the "2025 Notes") for $19.7 million plus accrued and unpaid interest.

As a result of the repurchase, we recognized a gain on the extinguishment of $0.3 million, which is included in interest expense, net in the consolidated statement of operations and comprehensive income.

As a result of the repurchase, we recognized a gain on the extinguishment of $0.3 million in the first six months of 2025, which is included in interest expense, net in the consolidated statement of operations and comprehensive income.

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

As a result of the repurchase, we 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.

See Note 12—Debt for additional information.

Other income primarily consists of dividend income.

Income tax benefit (expense)

For the first quarter of 2025 and 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.

Income tax expense

For the second quarter and first six months of 2025 and 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 and current tax expense on taxable income.

In the third quarter of 2025, we will adopt the One Big Beautiful Bill Act, which includes provisions impacting various aspects of the Company's tax obligations, including research and development expensing and 163(j) of the Internal Revenue Code limitation changes.

The impact of these changes on our financial statements is being evaluated and will be disclosed in future filings.

Segment Profit

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Change 2025 2024 $

(Dollars in thousands)

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34 80 (46) (58) % 70 59 11 19 %

Segment profit (12) 23 (35) (152) %

Other (12) (78) 66 85 % (24) (55) 31 56 %

Revenue 250,116 210,140 39,976 19 % 489,844 377,908 111,936 30 %

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See Note 15—Segment Information in the notes to the consolidated financial statements for additional information on segments and a reconciliation of segment profit to pre-tax income.

Revenue in the Home segment increased 22% to $37.0 in the first quarter of 2025 and segment profit increased 37% to $13.1 million in the first quarter of 2025 compared to the first quarter of 2024.

Segment margin increased to 36% in the first quarter of 2025 compared to 32% in the first quarter of 2024, primarily due to a change in product mix.

Home equity revenue of $25.8 million in the first quarter of 2025 increased $5.0 million from $20.8 million in the first quarter of 2024.

Our outlook for home equity remains positive.

According to TransUnion, at the end of 2024 total tappable home equity in the U.S.

was $20.9 trillion, up 3% compared to 2023 and an increase of 63% since the end of 2017.

The historically high level of home equity drove 10% loan origination growth in the fourth quarter of 2024 compared to the fourth quarter of 2023, as measured by number of new accounts.

Within Home, our core mortgage business generated revenue of $11.2 million in the first quarter of 2025, up 16% from the first quarter of 2024.

Our refinance product within our mortgage business matches consumers in the market looking to refinance their existing mortgages with our network lenders.

Our purchase product within our mortgage business matches consumers in the market looking to buy a new home with our network lenders.

The environment for the purchase mortgage market is beginning to improve.

According to the National Association of Realtors, inventory of existing homes for sale in the U.S.

increased to 1.33 million units, or 20%, in March of 2025 compared to March of 2024, and has grown by a double-digit percentage each month dating back to March of 2024.

Annual home price growth has slowed to 3% most recently, following several years of double-digit annual growth that began during the summer of 2020.

Persistently higher mortgage rates and increased economic uncertainty stemming from U.S.

policy are currently having an offsetting impact on the inventory and price benefits.

Our mortgage business is directly impacted by the mortgage market in which we participate.

Revenue in our Consumer segment increased 9% to $56.0 million in the first quarter of 2025 from the first quarter of 2024, and segment profit decreased 1% to $27.1 million in the first quarter of 2025 from the first quarter of 2024.

Segment margin was 48% in the first quarter of 2025 compared to 53% in the first quarter of 2024 primarily due to decline in revenue earned per consumer on certain products as well as a change in mix shift in the product revenue.

Underwriting criteria for lenders on our network was broadly stable in the first quarter, as a positive employment environment and lower pace of inflation compared to more recent periods presents an attractive underwriting environment for many loan types.

Personal loans revenue of $23.4 million in the first quarter of 2025 increased 16% from the first quarter of 2024 as consumers completing request forms increased 34%.

In March last year we saw appetite from many personal loan originators begin to firm following a prolonged period of historically high consumer price inflation.

We responded by leaning into targeted marketing spend for the product to capitalize on the improving fundamentals, which we credit for the recent consistent growth in the business.

We remain optimistic that the combination of record consumer credit card debt outstanding and a stable underwriting backdrop will drive forward growth.

Small business revenue increased 48% in the first quarter of 2025 from the first quarter of 2024 due to increases in the number of consumers completing request forms and in revenue earned per consumer.

Home segment revenue increased 26% to $40.4 million in the second quarter of 2025 from the second quarter of 2024 and segment profit increased 41% to $13.1 million in the second quarter of 2025 from the second quarter of 2024.

Segment margin increased to 32% in the second quarter of 2025 compared to 29% in the second quarter of 2024, primarily due to a change in product mix.

Home equity revenue of $30.3 million in the second quarter of 2025 increased $8.3 million from $22.0 million in the second quarter of 2024.

Volume of home equity consumers completing request forms increased 65% in the second quarter of

2025 compared to the second quarter of 2024, however, a 7% decline in revenue earned per consumer partially offset this volume growth.

The home equity product remains the primary focus for consumers and our lender partners as mortgage rates remained persistently high during the quarter.

Within Home, our core mortgage business generated revenue of $10.1 million in the second quarter of 2025, which is consistent with the second quarter of 2024.

Consumer demand for our core mortgage loans remains near trough levels.

A shortage of in-the-money refinance borrowers persists given the current higher level of mortgage rates, and historically low existing home sales are suppressing consumer demand for purchase loans.

We believe financial market expectations for continued decreases in interest rates may benefit the mortgage and home equity lending environment and our Home segment.

Our Consumer segment revenue increased 12% to $62.5 million in the second quarter of 2025 from the second quarter of 2024, and segment profit increased 19% to $32.1 million in the second quarter of 2025 from the second quarter of 2024 primarily due to the increase in revenue.

Segment margin was 51% in the second quarter of 2025 compared to 48% in the second quarter of 2024 primarily due to a change in mix shift in the product revenue.

Personal loans revenue of $30.6 million in the second quarter of 2025 increased 14% from the second quarter of 2024 primarily due to increases in the number of consumers completing request forms.

Some of our prime and mid-prime lender partners have begun to increase credit availability to a broader segment of our consumer traffic.

We continue to iterate and enhance our matching algorithms that aim to better align lenders and consumers, resulting in higher conversion rates and closed loans at positive unit economics.

We are continually testing and improving our matching platform to ensure both our lending partners and consumers are being paired at the optimum rate, maximizing close rates for our partners while also helping customers obtain the best priced loans they qualify for.

Small business revenue increased 61% in the second quarter of 2025 from the second quarter of 2024, due to increases in the number of consumers completing request forms and in revenue earned per consumer.

The investment to grow our concierge sales team has strengthened our renewal and lender bonus revenue streams.

Improved unit economics from this investment has allowed us to increase our marketing spend to capture more high-intent small business owners searching for new loans.

We forecast the small business product will generate record revenue in 2025.

See the section titled "Revenue" above for additional discussion of product revenues within the Consumer segment.

Insurance revenue increased 71% to $146.7 million in the first quarter of 2025 from the first quarter of 2024 and segment profit increased 16% to $38.7 million in the first quarter of 2025 from the first quarter of 2024.

Carrier demand for new auto insurance customers has been strong, with volume increasing 22% in the first quarter of 2025 compared to the first quarter of 2024, as two years of compounded premium rate increases combined with declines in the price of used vehicles and replacement parts has created a favorable underwriting environment.

Our Insurance segment was negatively impacted in the first quarter of 2025 by the implementation of changes to our consumer experience to comply with the FCC's one-to-one consent rule.

However, following a Federal appeals court opinion that struck down the rule at the end of January of 2025, we were able to revert to our previous experience.

Our Insurance segment margin decreased to 26% in the first quarter of 2025 compared to 39% in the first quarter of 2024.

In the first quarter of 2024, we were able to exit from our highest cost marketing channels and continue to meet the decreased level of demand.

Throughout 2024, we re-entered those marketing channels to fill the increase in carrier demand, which has resulted in lower segment profit margin.

We expect the Insurance segment will return to a more normalized growth pattern in 2025 following a historic year of performance last year.

As the pace of growth moderates, we are focused on optimizing our marketing mix and growing channels outside of internet search.

Our goal is to retain the same level of quality, high-intent consumer traffic while seeking to lower our overall marketing cost to improve margin in this business.

We are focused on growing the number and types of lenders on our small business network, including in the government SBA loan market.

See the section titled "Revenue" above for additional discussion of declines in product revenues within the Consumer segment.

Insurance revenue increased 21% to $147.2 million in the second quarter of 2025 from the second quarter of 2024 and segment profit increased 10% to $40.0 million in the second quarter of 2025 from the second quarter of 2024.

Carrier demand for new auto insurance customers has been strong, with volume increasing 19% in the second quarter of 2025 compared to the second quarter of 2024, as carriers are broadly experiencing strong underwriting results following multiple quarters of premium increases and stable loss cost trends.

Higher consumer rates remains the primary driver of increased consumer shopping traffic to our websites.

Demand from our carrier partners remain at relatively elevated levels and we continue to be optimistic about the remainder of 2025.

Segment margin declined to 27% in the second quarter of 2025 from 30% in the second quarter of 2024 as continued strong demand requires the use of our highest cost marketing channels.

Variable Marketing Expense and Variable Marketing Margin

We report variable marketing expense and variable marketing margin as supplemental measures to accounting principles generally accepted in the United States of America ("GAAP").

These related measures are the primary metrics by which we measure the effectiveness of our marketing efforts.

We report variable marketing expense and variable marketing margin as supplemental measures to accounting principles generally accepted in the United States of America ("GAAP".) These related measures are the primary metrics by which we measure the effectiveness of our marketing efforts.

Variable marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing, and related expenses, and excludes overhead, fixed costs, and personnel-related expenses.

Variable marketing margin is a measure of the efficiency of our operating model, measuring revenue after subtracting variable marketing expense.

Our operating model is highly sensitive to the amount and efficiency of variable marketing expenditures, and our proprietary systems are able to make rapidly changing decisions concerning the deployment of variable marketing expenditures (primarily but not exclusively online and mobile advertising placement) based on proprietary and sophisticated analytics.

Our operating model is highly sensitive to the amount and efficiency of variable marketing expenditures, and our proprietary systems are able to make rapidly changing decisions

concerning the deployment of variable marketing expenditures (primarily but not exclusively online and mobile advertising placement) based on proprietary and sophisticated analytics.

We believe that investors should have access to the same set of tools that we use in analyzing our results.

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in thousands)

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in thousands)

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Variable marketing expense $ 166,468 $ 139,247 $ 328,469 $ 237,568

The following is a reconciliation of net (loss) income, the most directly comparable GAAP measure, to variable marketing margin:

The following is a reconciliation of net income (loss), the most directly comparable GAAP measure, to variable marketing margin:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in thousands)

Net (loss) income $ (12,375) $ 1,016

Net income (loss) $ 8,862 $ 7,752 $ (3,513) $ 8,768

Adjustments to reconcile to variable marketing margin:

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Non-variable selling and marketing expense (1)

10,285 9,140 21,035 18,995

General and administrative expense 25,034 27,118 55,694 52,914

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Other income (248) (1,052) (1,636) (2,086)

Income tax (benefit) expense (2,430) 559

Income tax expense (benefit) 1,908 1,686 (522) 2,245

Variable marketing margin $ 83,648 $ 70,893 $ 161,375 $ 140,340

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At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives.

The following table is a reconciliation of net (loss) income, the most directly comparable GAAP measure, to Adjusted EBITDA.

The following table is a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA.

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in thousands)

Net (loss) income $ (12,375) $ 1,016

Net income (loss) $ 8,862 $ 7,752 $ (3,513) $ 8,768

Adjustments to reconcile to Adjusted EBITDA:

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Loss on impairments and disposal of assets — 413 254 781

Loss on impairment of equity investments 1,225 — 1,225 —

Non-cash compensation expense 4,967 7,437 14,834 15,226

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Dividend income (1,474) (1,225) (2,862) (2,259)

Income tax (benefit) expense (2,430) 559

Income tax expense (benefit) 1,908 1,686 (522) 2,245

Adjusted EBITDA $ 31,793 $ 23,527 $ 56,419 $ 45,078

Financial Position, Liquidity and Capital Resources

As of March 31, 2025, we had $126.4 million of cash and cash equivalents, compared to $106.6 million of cash and cash equivalents as of December 31, 2024.

Financial Condition, Liquidity and Capital Resources

As of June 30, 2025, we had $149.1 million of cash and cash equivalents, compared to $106.6 million of cash and cash equivalents as of December 31, 2024.

In the first quarter of 2025, we repurchased approximately $20.0 million in principal amount of our 2025 notes for $19.7 million resulting in a gain on the extinguishment of $0.3 million which is included in interest expense, net in the consolidated statement of operations and comprehensive income.

In March 2025, we drew the remaining $50.0 million of the 2024 Term Loan delayed draw.

We expect our cash and cash equivalents and cash flows from operations to be sufficient to fund our operating needs for the next twelve months and beyond.

We expect our cash and cash equivalents, cash flows from operations to be sufficient to fund our operating needs for the next twelve months and beyond.

We will continue to monitor the impact of the current economic conditions, including interest rates and inflation on our liquidity and capital resources.

As of March 31, 2025, we have $95.3 million outstanding on the 2025 Notes.

We intend to use cash on hand and future cash flows from operations for the repayment of the 2025 Notes, due July 15, 2025.

For more information, see Note 11—Debt, in the notes to the consolidated financial statements included elsewhere in this report.

As of June 30, 2025, we had $95.3 million outstanding on the 2025 Notes.

On July 15, 2025, the outstanding 2025 Notes were fully repaid using cash on hand.

Equity Distribution Agreement

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

No sales were made under the Equity Distribution Agreement during 2024 or in the first quarter of 2025.

No sales were made under the Equity Distribution Agreement during 2024 or in the first six months of 2025.

Credit Facilities

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The proceeds of the Revolving Facility can be used to finance working capital, for general corporate purposes and any other purpose not prohibited by the Credit Agreement.

We borrowed $250.0 million under the delayed draw term loan on May 31, 2022 and used $170.2 million of the proceeds to settle the Company’s 0.625% Convertible Senior Notes due June 1, 2022, including interest.

We borrowed $250.0 million under the delayed draw term loan on May 31, 2022 and used $170.2 million of the proceeds to settle our 0.625% Convertible Senior Notes due June 1, 2022, including interest.

The remaining proceeds of $79.8 million may be used for general corporate purposes and any other purposes not prohibited by the Credit Agreement.

As of May 2, 2025, we have outstanding $243.1 million under the 2021 Term Loan.

As of March 31, 2025, we have $20.0 million available for borrowing under the Revolving Facility.

As of July 31, 2025, we have outstanding $242.5 million under the 2021 Term Loan and the remaining borrowing capacity under the Revolving Facility is $200.0 million.

As of June 30, 2025, we had $45.9 million available for borrowing under the Revolving Credit Facility.

As of July 31, 2025, following the repayment of the 2025 Notes, we have $20.0 million available for borrowing under the Revolving Facility.

On March 27, 2024, we entered a first lien term loan facility (the “2024 Term Loan”), consisting of $175.0 million which matures on March 27, 2031.

We drew $125.0 million of the 2024 Term Loan upon closing and drew the remaining $50.0 million on March 27, 2025.

The proceeds of the 2024 Term Loan can be used for working capital and general corporate purposes, which may include repayment of our 2025 Notes.

The proceeds of the 2024 Term Loan 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, including the repayment of our 2025 Notes on July 15, 2025.

The funding had a $3.1 million original issue discount and associated debt issuance costs of $4.3 million.

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

As of May 2, 2025, the Company had $162.5 million borrowings outstanding under the 2024 Term Loan.

See Note 11—Debt for additional information.

As of July 31, 2025, we had $160.3 million borrowings outstanding under the 2024 Term Loan.

See Note 12—Debt, in Part I.

Item 1 Financial Statements, for additional information.

Our cash flows are as follows:

Three Months Ended

Six Months Ended

(in thousands)

Net cash (used in) provided by operating activities $ (210) $ 5,708

Net cash provided by operating activities $ 27,743 $ 765

Net cash used in investing activities (6,158) (5,474)

Net cash provided by financing activities 23,420 115,743

Net cash provided by (used in) financing activities 20,952 (40,578)

Cash Flows from Operating Activities

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Our primary uses of cash from our operating activities include advertising and promotional payments.

In addition, our uses of cash from operating activities include compensation and other employee-related costs, other general corporate expenditures, litigation settlements and contingencies, and income taxes.

Net cash (used in) provided by operating activities decreased in the first three months of 2025 from the first three months of 2024 primarily due to unfavorable changes in accounts payable, accrued expenses and other current liabilities, prepaid expenses and other current assets, and income taxes, partially offset by favorable changes in accounts receivable.

In addition, our uses of cash from operating

activities include compensation and other employee-related costs, other general corporate expenditures, litigation settlements and contingencies, and income taxes.

Net cash provided by operating activities increased in the first six months of 2025 from the first six months of 2024 primarily due to favorable changes in accounts receivable and accounts payable, accrued expenses and other current liabilities, partially offset by unfavorable changes in prepaid expenses and other current assets, and income taxes.

Cash Flows from Investing Activities

Net cash used in investing activities in the first three months of 2025 and 2024 of $3.4 million and $2.7 million, respectively, consisted of capital expenditures primarily related to internally developed software.

Net cash used in investing activities in the first six months of 2025 and 2024 consisted of capital expenditures primarily related to internally developed software.

Cash Flows from Financing Activities

Net cash provided by financing activities in the first three months of 2025 of $23.4 million consisted primarily of the $49.5 million net proceeds from the 2024 Term Loan delayed draw partially offset by repurchases of our 2025 Notes for $19.7 million, term loan repayments of $3.8 million and $2.6 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options.

Net cash provided by financing activities in the first three months of 2024 of $115.7 million consisted primarily of the $117.8 million net proceeds for the 2024 Term Loan partially offset by $1.4 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options.

New Accounting Pronouncements

For information regarding new accounting pronouncements, See Note 2 — Significant Accounting Policies, in Part I, Item 1 consolidated financial statements of this Quarterly Report on Form 10-Q.

Net cash provided by financing activities in the first six months of 2025 of $21.0 million consisted primarily of $49.5 million net proceeds from the 2024 Term Loan, partially offset by the repurchase of the 2025 Notes for $19.7 million, term loan repayments of $6.6 million and $2.3 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options.

Net cash used in financing activities in the first six months of 2024 of $40.6 million consisted primarily of the repurchase of the 2025 Notes for $151.7 million, term loan repayments of $4.4 million and $2.3 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options offset by $117.8 million net proceeds from the 2024 Term Loan.

New Accounting Pronouncements and Critical Accounting Estimates

For information regarding new accounting pronouncements and critical accounting estimates, see Note 2 — Significant Accounting Policies, in Part I, Item 1 Financial Statements .

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 2. Management’s Discussion and Analysis