What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-09 compared with 2025-03-07 · 121 added, 184 removed, 351 unchanged (46% 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 tools and resources, including free credit scores, that facilitate comparison shopping for loans, deposit products, insurance, and other offerings.

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We also serve 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 we generate with these Network Partners.

Our Spring platform offers a personalized comparison-shopping experience, financial health advice and credit simulations by providing free credit scores and credit score analysis.

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

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

We are focused on developing new product offerings and enhancements to improve the experience of consumers and Network Partners as they interact with us.

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

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

During 2023, the challenging interest rate environment and inflationary pressures presented challenges for many of our mortgage, consumer and insurance partners.

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

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In the last months of 2023, we began to see advertising budgets from our carrier partners increase.

During 2024, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending partners.

During 2024, the challenging interest rate environment and inflationary pressures continued to present challenges for many of our mortgage lending partners.

In our Home segment, mortgage rates remained relatively consistent in 2024, with the annual average mortgage rate in 2024 of 6.7% compared to 6.8% in 2023.

However, these rates are more than doubled compared to the low annual average mortgage rates seen in 2021.

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

Additionally, the restrictive lending conditions continue to

pressure our Consumer segment.

In our Insurance segment, demand from our carrier partners increased significantly in 2024 and we are optimistic about maintaining the strong performance in the Insurance segment as we head into 2025.

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

Additionally, the restrictive lending conditions continued to pressure our Consumer segment.

In our Insurance segment, demand from our carrier partners increased significantly in 2024.

During 2025, we continue to see high interest rates, inflationary pressures and low existing home sales negatively impacting our mortgage lending partners.

In our Home segment, mortgage rates remained relatively consistent in 2025, with the annual average mortgage rate in 2025 of 6.6% compared to 6.7% in 2024, but remain significantly increased compared to the low rates seen in 2021.

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.

Our Consumer segment has benefited from the recent Federal Reserve rate decreases, and our lenders are generally broadening in credit appetite.

Insurance segment, carriers are broadly experiencing strong automotive underwriting results following multiple quarters of premium increases and stable loss cost trends.

We are optimistic about maintaining the strong performance in the Insurance segment as we head into 2026.

Segment Reporting

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According to Freddie Mac, 30-year mortgage interest rates increased significantly during 2022, from a monthly average of 3.45% in January 2022, ending at a monthly average of 6.36% in December 2022.

During 2023, 30-year mortgage interest rates steadily increased from a monthly average of 6.27% in January 2023 to a high of 7.62% in October 2023 prior to decreasing at the end of the year, ending at a monthly average of 6.82% in December 2023.

During 2024, 30-year mortgage interest rates remained relatively consistent, starting the year at a monthly average of 6.64% in January 2024 and ending at a monthly average of 6.72% in December 2024, with monthly high of 7.06% in May and a monthly low of 6.18% in September 2024.

On a full-year basis, 30-year mortgage interest rates decreased to an average of 6.72% in 2024 compared to 6.80% in 2023, and increased from 5.33% in 2022.

During 2023, 30-year mortgage interest rates reached a high of 7.62% in October.

During 2024, 30-year mortgage interest rates remained relatively consistent, starting the year at a monthly average of 6.64% in January 2024 and ending at a monthly average of 6.72% in December 2024.

During 2025, 30-year mortgage interest rates started the year at a monthly average of 6.96% in January 2025 and ended at a monthly average rate of 6.19% in December 2025.

On a full-year basis, 30-year mortgage interest rates have been in a narrow range with an average of 6.60% in 2025, 6.72% in 2024, and 6.80% in 2023.

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 of total mortgage origination dollars decreased to 15% in 2023 from 30% of total 2022 mortgage origination dollars from refinance due to the increase in average mortgage rates.

Total refinance original dollars increased to 28% of total mortgage origination dollars in 2024 due to the decrease in average mortgage interest rates.

Total refinance origination dollars decreased by 68% in 2023 over 2022 and increased 124% in 2024 over 2023.

Industry-wide mortgage origination dollars decreased by 37% in 2023 over 2022 and increased 22% in 2024 over 2023.

According to Mortgage Bankers Association (“MBA”) data, total refinance origination dollars of total mortgage origination dollars increased to 34% in 2025 from 21% in 2024 and 15% in 2023 due to the slight easing in average mortgage rates.

Total refinance origination dollars increased by 99% in 2025 over 2024 and increased 59% in 2024 over 2023.

Industry-wide mortgage origination dollars increased by 22% in 2025 over 2024 and increased 16% in 2024 over 2023.

Looking forward, the MBA is projecting 30-year mortgage interest rates to decrease slightly in 2026 to an average of 6.1%.

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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, in 2022, existing home sales decreased by 17% compared to 2021 due to increased interest rates and limited inventory of homes.

This trend continued into 2023 with existing home sales decreasing 19% compared to 2022 and decreased a further 1% in 2024 from 2023.

According to Fannie Mae data, existing home sales decreased 19% in 2023 compared to 2022 and decreased a further 1% in 2024 from 2023.

Existing home sales were flat in 2025.

Fannie Mae expects a 7% increase in existing home sales in 2026 compared to 2025.

LendingTree Spring

We consider certain metrics related to 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 continued to grow our user base and added 3.1 million new users in 2024, bringing cumulative active users to 31.3 million as of December 31, 2024.

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 $23.1 million of revenue, or 3% of total revenue, for the year ended December 31, 2024 to registered Spring users who initiated their transaction from the Spring platform.

During 2024, approximately 0.9 million Spring users initiated a transaction from the Spring platform that contributed to revenue.

Convertible Senior Notes and Hedge and Warrant Transactions

On July 24, 2020, we issued $575.0 million aggregate principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 (the "2025 Notes") and, in connection therewith, entered into Convertible Note Hedge and Warrant transactions with respect to our common stock.

On May 31, 2017, we issued $300.0 million aggregate principal amount of our 0.625% Convertible Senior Notes due June 1, 2022 and, in connection therewith, entered into Convertible Note Hedge and Warrant transactions with respect to our common stock.

On July 24, 2020, a portion of the net proceeds from the issuance of the 2025 Notes was used to repurchase approximately $130.3 million principal amount of the 2022 Notes.

A portion of the call spread transactions associated with the 2022 Notes was also terminated on July 24, 2020 in notional amounts corresponding to the principal amount of the 2022 Notes repurchased.

On May 31, 2022, we drew $250.0 million on the Term Loan Facility.

A portion of this was used to pay the outstanding balance of $169.7 million and interest on our 0.625% Convertible Senior Notes that matured on June 1, 2022.

The remaining call spread transactions associated with the 2022 Notes terminated in 2022.

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

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

In 2024, we recognized a gain on the extinguishment of debt of $10.1 million and a loss on the write-off of unamortized debt issuance costs of $1.1 million, both of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.

In the first quarter of 2023, we repurchased approximately $190.6 million in principal amount of our 2025 Notes, through separate transactions with certain holders of the 2025 Notes, for $156.3 million plus accrued and unpaid interest of approximately $0.1 million.

In the fourth quarter of 2023, we repurchased approximately $100.2 million in principal amount of our 2025 Notes, through separate transactions with certain holders of the 2025 Notes, for $81.2 million plus accrued and unpaid interest of approximately $0.2 million.

In 2023, we recognized a gain on the extinguishment of debt of $53.3 million, a loss on the write-off of unamortized debt issuance costs of $3.2 million and incurred debt repayment costs of $1.6 million, all of which are included in interest income/expense, net in the consolidated statement of operations and comprehensive income.

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 we have no further obligations with respect to the 2025 Notes.

New Credit Facility and Refinancing

On August 21, 2025, we entered into a $475.0 million first lien term loan facility (the "2025 Facility") consisting of a $75 million revolving credit facility (the "2025 Revolving Facility") and a $400.0 million term loan facility (the "2025 Term Loan"), both with maturities of August 21, 2030.

Proceeds from the 2025 Facility were used to refinance the Credit Agreement (as defined herein) and 2024 Term Loan (as defined herein) and for working capital and general corporate purposes.

For more information, see Note 13—Debt, in the notes to the consolidated financial statements included elsewhere in this report.

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As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction.

Part of this Reduction Plan included the shut down of our LendingTree customer call center as well as our Medicare insurance agency operations within QuoteWizard.

Part of this Reduction Plan included the shutdown of our LendingTree customer call center as well as our Medicare insurance agency operations within QuoteWizard.

We estimate the Reduction Plan reduced annual compensation expense by approximately $14 million, comprised of $2 million in cost of revenue, $4 million in selling and marketing expense, $3 million in general and administrative expense, and $5 million in product development.

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Additionally, we incurred $2.1 million in severance charges in 2023 in connection with cash expenditures for employee separation costs.

We acquired Ovation in 2018 to better serve those customers who come to

LendingTree and receive suboptimal offers of credit.

We acquired Ovation in 2018 to better serve those customers who come to LendingTree and receive suboptimal offers of credit.

The business grew for a number of years before running into challenges in the wake of COVID-19, and more recently the industry has faced increased regulatory pressure.

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Amortization of intangibles 5,190 5,889 (699) (12) %

Goodwill impairment — 38,600 (38,600) (100) %

Restructuring and severance 1,633 508 1,125 221 %

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Total costs and expenses 1,052,511 855,592 196,919 23 %

Operating income (loss) 44,627 (40,611) 85,238 210 %

Operating income 64,813 44,627 20,186 45 %

Other (expense) income, net:

Interest (expense) income, net (46,787) (27,849) 18,938 68 %

Other (expense) income (54,162) (105,993) 51,831 49 %

Loss before income taxes (37,384) (124,919) 87,535 70 %

Income tax (expense) benefit (4,320) 2,515 (6,835) (272) %

Net loss and comprehensive loss $ (41,704) $ (122,404) $ 80,700 66 %

Revenue increased in 2024 compared to 2023 due to an increase in our Insurance segment, partially offset by decreases in our Home and Consumer segments.

Other income (expense) 2,998 (54,162) (57,160) (106) %

Income (loss) before income taxes 21,024 (37,384) 58,408 156 %

Income tax benefit (expense) 130,284 (4,320) (134,604) (3,116) %

Net income (loss) and comprehensive income (loss) $ 151,308 $ (41,704) $ 193,012 463 %

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

Revenue from our Insurance segment increased $163.2 million, or 30%, to $711.9 million in 2025 from $548.7 million in 2024.

The increase in revenue was due to a 63% increase in revenue earned per consumer, representing $156.8 million of the increase and a 35% increase in volume representing $142.3 million of the increase.

The increase in revenue was due to a 22% increase volume, representing $127.0 million of the increase and a 7% increase in revenue earned per consumer, representing $36.2 million of the increase.

We measure volume for our 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 Consumer segment includes the following products:

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

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

Revenue from our Consumer segment decreased $56.5 million in 2024 from 2023, or 20%, primarily due to decreases in our credit cards, other credit products and deposits, partially offset by an increase in small business loans.

We are in the process of exiting the student loans business and plan to be substantially completed by the end of the first quarter of 2025.

credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products.

Many of our Consumer segment products are not individually

significant to revenue.

Revenue from our Consumer segment increased $30.9 million in 2025 from 2024, or 14%, primarily due to increases in small business and personal loans, partially offset by a decrease in credit cards.

Revenue from our personal loans product increased $13.0 million, or 13%, to $114.4 million in 2025 from $101.4 million in 2024.

The increase in revenue was due to a 22% increase in volume, representing $18.2 million an increase, partially offset by a 17% decrease in revenue earned per consumer, representing $16.9 million of a decrease.

The increase in revenue was primarily due to a 14% increase in volume, representing $13.9 million of an increase.

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

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however, certain other Consumer products experienced notable changes.

R evenue from our small business loans product increased $33.7 million, or 60%, in 2025 compared to 2024, due to increases in the number of consumers completing request forms and revenue earned per consumer.

Revenue from our credit cards product decreased $10.3 million, or 43% in 2025 compared to 2024 primarily due to a decrease in revenue earned per click and volume .

We measure volume for our credit cards product as the number of consumers clicking through to a card issuer.

Revenue from our credit products decreased $12.4 million, or 40%, in 2024 compared to 2023 primarily due to the closure of our Ovation credit services business at the end of the second quarter of 2023.

Revenue from our deposits product decreased $6.5 million in 2024 compared to 2023, primarily due to a d ecrease in volume and revenue earned per consumer.

Partially offsetting these declines, r evenue from our small business loans product increased $4.0 million, or 8%, in 2024 compared to 2023, due to an increase in revenue earned per consumer partially offset by a decline in the number of consumers completing request forms.

Our Home segment includes the following products:

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

Revenue from our Home segment decreased $14.9 million, or 10%, in 2024 from 2023 primarily due to a decrease in revenue from our mortgage products partially offset by an increase in revenue from our home equity loans product.

Revenue from our mortgage products decreased $17.3 million, or 29%, to $41.4 million in 2024 from $58.7 million in 2023.

The decrease in revenue was due to a 25% decline in volume, representing $13.6 million of the decrease, and a 6% decrease in revenue earned per consumer, representing $3.7 million of the decrease.

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

Revenue from our purchase mortgage product decreased $11.0 million in 2024 compared to 2023 primarily due to decreases in the number of consumers completing request forms and a decrease in revenue earned per consumer.

Revenue from our refinance mortgage product decreased $6.3 million in 2024 compared to 2023, primarily due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer, as interest rates were generally flat compared to 2023.

Revenue from our Home segment increased $22.9 million, or 18%, in 2025 from 2024 primarily due to to an increase in revenue from our home equity loans product.

Revenue from our home equity loans and lines of credit product increased $22.3 million, or 26%, to $109.8 million in 2025 from $87.5 million in 2024.

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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 decreased in 2024 compared to 2023 primarily due to a decrease in compensation and benefits of $2.7 million.

The decrease is primarily due to the Reduction Plan at the end of the first quarter of 2023, including shutting down the LendingTree customer call center, and the closure of our Ovation credit services business at the end of the second quarter of 2023.

Cost of revenue as a percentage of revenue decreased to 4% in 2024 compared to 6% in 2023.

Cost of revenue increased in 2025 compared to 2024 primarily due to an increase in compensation and benefits of $5.6 million.

Cost of revenue as a percentage of revenue remained consistent at 4% in 2025 and in 2024.

Selling and marketing expense

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Selling and marketing expense increased in 2025 compared to 2024 primarily due to the $174.8 million increase in advertising and promotional expense discussed below.

Additionally, compensation and benefits decreased $2.0 million in 2024 compared to 2023.

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

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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 decreased in 2024 compared to 2023, primarily due to a decrease in compensation and benefits of $3.7 million, a decrease in loss on assets of $2.9 million, a decrease in facilities expense of $2.5 million and a decrease in bad debt expense of $1.6 million.

Non-cash compensation expense, included in total compensation and benefits noted above, within general and administrative expense decreased in 2024 compared to 2023.

General and administrative expense increased in 2025 compared to 2024, primarily due to an increase in compensation and benefits of $9.0 million.

Non-cash compensation expense, included in total compensation and benefits noted above, within general and administrative expense increased in 2025 compared to 2024 primarily due to the acceleration of non-cash compensation expense of $5.8 million on certain equity awards associated with our previous Founder and Chief Executive Officer.

For additional information, see Note—11-Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report.

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General and administrative expense as a percentage of revenue decreased to 10% in 2025 from 12% in 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 decreased in 2024 compared to 2023 primarily due to the Reduction Plan at the end of the first quarter of 2023.

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.

Amortization of Intangibles

The decrease in amortization of intangibles in 2024 compared to 2023 was due to certain intangible assets associated with our recent business acquisitions becoming fully amortized.

Goodwill Impairment

We incurred a goodwill impairment charge of $38.6 million in 2023 in our Insurance reporting unit.

See Note 7 - Goodwill and Intangible Assets for additional information .

Restructuring and severance

During September 2023, we completed workforce reductions of 14 employees.

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

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

In April 2023, we made the decision to close the Ovation credit services business ( the "Ovation Closure").

The Ovation Closure included the elimination of approximately 197 employees, or 18%, of the Company's workforce.

As a result of the Ovation Closure, we incurred $2.1 million in restructuring expense in connection with cash expenditures for employee separation costs.

The cash payments for the Ovation Closure were completed in the first quarter of 2024.

On March 24, 2023, we committed to the Reduction Plan to reduce operating costs.

The Reduction Plan included the elimination of approximately 162 employees, or 13%, of the Company’s workforce.

As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction, consisting of cash expenditures for employee separation costs of approximately $4.3 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $1.0 million.

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

Litigation settlements and contingencies

In 2025 and 2024, we incurred $15.2 million and $3.8 million, respectively, of expenses for litigation contingencies due to the Mantha litigation.

See Note 15— Contingencies in the notes to the consolidated financial statements for additional information on litigation matters.

Interest (expense) income, net

In March 2024, we drew $125.0 million on a first lien term loan facility and incurred $11.5 million of interest expense.

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

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 these repurchases, we recognized a gain on the extinguishment of $10.1 million and a loss on the write-off of unamortized debt issuance costs of $1.1 million.

In the first quarter of 2023, we repurchased approximately $190.6 million in principal amount of our 2025 Notes for $156.3 million plus accrued and unpaid interest of approximately $0.1 million.

In the fourth quarter of 2023, we repurchased approximately $100.2 million in principal amount of our 2025 Notes, for $81.2 million in cash plus accrued and unpaid interest of approximately $0.2 million.

As a result of the repurchases, we recognized a gain on the extinguishment of $53.3 million, a loss on the write-off of unamortized debt issuance costs of $3.2 million, and incurred debt repayment costs of $1.6 million.

In March 2024 and March 2025, we drew $125.0 million and $50 million, respectively, on the 2024 Term Loan (as defined herein).

The incremental borrowing in 2024 and 2025 resulted in an increase of $2.5 million of interest expense in 2025 compared to 2024.

In the third quarter of 2025, we refinanced our Credit Agreement (as defined herein) and 2024 Term Loan, which collectively had $402.8 million outstanding, with proceeds from the $400.0 million 2025 Term Loan (as defined herein) and cash on hand at par plus accrued and unpaid interest.

As a result of the refinancing, we recognized a loss on the extinguishment of $7.9 million due to the write-off of unamortized debt issuance costs and original issue discount costs which are included in interest expense, net in the consolidated statement of operations and comprehensive income.

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.

In the third quarter of 2024, we repurchased approximately $7.6 million in principal amount of our 2025 Notes for $7.2 million and in the second quarter of 2024, we repurchased approximately $161.3 million in principal amount of our 2025 Notes for $151.7 million.

As a result of these repurchases, we recognized a gain on the extinguishment of $10.1 million and a loss on the write-off of unamortized debt issuance costs of $1.1 million, both of which are included in interest expense, net in the consolidated statements of operations and comprehensive income.

See Note 13—Debt for additional information.

We incurred impairment charges of $58.4 million and $114.5 million in 2024 and 2023, respectively, related to our investments in equity securities.

We incurred an impairment charge of $58.4 million in 2024 related to our investments in equity securities.

See Note 7—Equity Investments for additional information.

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(in thousands, except percentages)

Income tax (expense) benefit $ (4,320) $ 2,515

Income tax benefit (expense) $ 130,284 $ (4,320)

Effective tax rate (619.7) % (11.6) %

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

For 2025, the effective tax rate varied from the federal statutory rate of 21% primarily due to the $149.5 million tax benefit to reduce the valuation allowance against our net deferred tax assets.

For 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.

See Note—12 Income Taxes in the notes to the consolidated financial statements included elsewhere in this report for additional information on the valuation allowance.

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Segment profit is calculated as segment revenue less segment selling and marketing expenses attributed to variable costs paid for advertising, direct marketing and related expenses that are directly attributable to the segments' products.

See Note 20—Segment Information in the notes to the consolidated financial statements included elsewhere in this report for additional information on segments and a reconciliation of segment profit to pre-tax income from continuing operations.

Home segment revenue decreased 10% to $128.9 million in 2024 compared to 2023 and segment profit decreased to $39.9 million in 2024, a decrease of 17% compared to 2023.

Our Home segment margin, which is segment profit divided by segment revenue, decreased slightly to 31% in 2024 compared to 33% in 2023 primarily due to a decline in revenue earned per consumer, due to a decline in close rates at our lender partners.

See Note 19—Segment Information in the notes to the consolidated financial

statements included elsewhere in this report for additional information on segments and a reconciliation of segment profit to pre-tax income (loss).

Home segment revenue increased 18% to $151.8 million in 2025 compared to 2024 and segment profit increased to $48.3 million in 2025, an increase of 21% compared to 2024.

Our Home segment margin, which is segment profit divided by segment revenue, increased slightly to 32% in 2025 compared to 31% in 2024.

Revenue from our home equity loan product of $109.8 million in 2025 increased 26% compared to 2024.

Volume of home equity consumers completing request forms increased 23% in 2024 compared to 2023, however, a 17% decline in revenue earned per consumer partially offset this volume growth.

As longer-term rates have remained stable and higher than most existing first mortgages, second lien products offer an attractively priced source of capital for homeowners.

According to CoreLogic, homeowners with a mortgage in the U.S.

have $17.5 trillion of equity as of September 30, 2024, a 2.5% increase from a year ago.

We expect further growth in our home equity business in 2025 as home values remain at near record levels.

As longer-term rates have remained relatively stable and higher than most existing first mortgages, second lien products offer an attractively priced source of capital for homeowners.

Within Home, our core mortgage business generated revenue of $42.0 million in 2025, down 1% compared to 2024.

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According to Freddie Mac, the 30-year mortgage interest rates have remained elevated with a yearly average of 6.6% in 2025 compared to 6.7% in 2024.

The Mortgage Bankers Association expects overall mortgage originations to increase 16% in 2025, although the first quarter of 2025 is expected to remain weak and below fourth quarter of 2024 levels.

The Mortgage Bankers Association expects overall mortgage originations to increase 7% in 2026.

The forecast calls for total loan originations of $2.2 trillion and purchase loans are expected to account for 66% of origination volume.

Revenue in our Consumer segment decreased 20% to $222.5 million in 2024 from 2023, with segment profit of $110.5 million in 2024, a decrease of 20% from 2023.

Our Consumer segment margin remained consistent at 50% in 2024 and 2023.

Revenue from our personal loan product of $101.4 million increased 1% in 2024 compared to 2023 as lending standards remained restrictive at our lender partners during the year.

The leading reason for consumers to seek personal loans is to re-finance higher-cost credit card debt.

Total revolving consumer debt remains near record levels and interest rates on that debt have increased as short-term rates have increased.

We believe the outlook is positive for our personal loan product in 2025.

Revenue in our Consumer segment increased 14% to $253.4 million in 2025 from 2024 with segment profit of $129.4 million in 2025, an increase of 17% from 2024.

Our Consumer segment margin increased slightly to 51% in 2025 compared to 50% in 2024.

Revenue from our personal loan product of $114.4 million increased 13% in 2025 compared to 2024.

We saw a broadening in the credit appetite from our lender partners that led to a meaningful increase in close rates for our consumers.

Small business revenue increased 60% in 2025 compared to 2024.

Lenders in our network have increased new loan originations as their credit performance has improved, particularly in the second half of 2024.

In response, we have invested in our concierge sales team and targeted marketing campaigns.

Our concierge sales members provide single-point-of-contact for small business owners, assisting in selecting the best loan offer, collecting required documentation and troubleshooting issues during the application process.

Our investment in this team has helped drive a material increase in approval rates for our customers, and allows us to capture lender volume bonuses and renewal revenue streams.

This increase in revenue was driven by the deliberate investment in our concierge sales team, which provides a high-touch service option for business owners working through the complex loan shopping process.

We continue to invest in growing this team to power further small business growth in 2026.

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

Insurance revenue of $711.9 million in 2025 increased 30% from 2024, while segment profit of $174.4 million in 2025 increased 10% from 2024.

Carriers increased their marketing spend with us steadily throughout the year 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 resulting in higher demand for new auto insurance customers.

Additionally, the volume of consumers completing request forms on our platform increased 35% in 2024 compared to 2023.

Insurance carriers are broadly enjoying very strong automotive underwriting results following multiple quarters of premium increases and stable loss cost trends, and are aggressively pursing new customers.

Our Insurance segment margin decreased to 25% in 2025 compared to 29% in 2024.

In 2023, we were able to exit from our highest cost marketing channels and continue to meet the decreased level of demand.

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

The increased demand has created a competitive market to acquire customers seeking an auto policy, which has led to strong growth in both revenue as well as associated media costs.

Our strategy is to capture the maximum level of carrier advertising budgets when we have an opportunity to drive incremental segment profit and take share from competitors.

These incremental dollars have pressured overall segment margin while simultaneously contributing to robust segment profit.

Variable Marketing Expense and Variable Marketing Margin

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

This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP results.

This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP

We provide and encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures discussed below.

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Variable marketing expense $ 770,680 $ 595,908

The following is a reconciliation of net loss, 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:

Year Ended December 31,

(in thousands)

Net loss $ (41,704) $ (122,404)

Net income (loss) $ 151,308 $ (41,704)

Adjustments to reconcile to variable marketing margin:

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Amortization of intangibles 5,190 5,889

Goodwill impairment — 38,600

Restructuring and severance 1,633 508

Litigation settlements and contingencies 15,661 3,797

Interest expense (income), net 27,849 (21,685)

Interest expense, net 46,787 27,849

Other expense (income) (2,998) 54,162

Income tax expense (benefit) 4,320 (2,515)

Income tax (benefit) expense (130,284) 4,320

Variable marketing margin $ 346,644 $ 304,311

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Non-cash compensation expense consists principally of expense associated with grants of restricted stock, restricted stock units and stock options, some of which awards have performance-based vesting conditions.

Non-cash compensation expense also includes expense associated with employee stock purchase plans.

These expenses are not paid in cash and we include the related shares in our calculations of fully diluted shares outstanding.

Upon settlement of restricted stock units, exercise of certain stock options or vesting of restricted stock awards, the awards may be settled, on a net basis, with us remitting the required tax withholding amount from our current funds.

Upon settlement of restricted stock units, exercise of

certain stock options or vesting of restricted stock awards, the awards may be settled, on a net basis, with us remitting the required tax withholding amount from our current funds.

Amortization of intangibles are non-cash expenses relating primarily to intangible assets acquired through acquisitions.

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, 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.

Year Ended December 31,

(in thousands)

Net loss $ (41,704) $ (122,404)

Net income (loss) $ 151,308 $ (41,704)

Adjustments to reconcile to Adjusted EBITDA:

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Loss on investments 1,225 58,376

Goodwill impairment — 38,600

Non-cash compensation expense 29,202 28,579

Acquisition expense — (5)

Litigation settlements and contingencies 15,661 3,797

Interest expense (income), net 27,849 (21,685)

Interest expense, net 46,787 27,849

Dividend income (4,223) (4,385)

Income tax expense (benefit) 4,320 (2,515)

Income tax (benefit) expense (130,284) 4,320

Adjusted EBITDA $ 132,887 $ 104,113

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As of December 31, 2025, we had $81.1 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.

On July 15, 2025, the remaining $95.3 million outstanding 2025 Notes were fully repaid using cash on hand.

In March 2025 and 2024, we drew $50.0 million and $125.0 million, respectively, on the 2024 Term Loan.

In the third quarter of 2025, we refinanced our 2021 Credit Agreement and 2024 Term Loan, which collectively had $402.8 million outstanding, with proceeds from the $400.0 million 2025 Term Loan and cash on hand at par plus accrued and unpaid interest.

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

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 these repurchases, we recognized a gain on the extinguishment of $10.1 million and a loss on the write-off of unamortized debt issuance costs of $1.1 million, both of which are included in interest (expense) income, net in the consolidated statements of operations and comprehensive income.

On March 8, 2023, we repurchased approximately $190.6 million in principal amount of our 2025 Notes, through separate transactions with certain holders of the 2025 Notes, for $156.3 million plus accrued and unpaid interest of approximately $0.1 million.

On December 7, 2023, we repurchased approximately $100.2 million in principal amount of our 2025 Notes, through separate transactions with certain holders of the 2025 Notes, for $81.2 million plus accrued and unpaid interest of approximately $0.2 million.

In 2023, we recognized a gain on the extinguishment of debt of $53.3 million, a loss on the write-off of unamortized debt issuance costs of $3.2 million and incurred debt repayment costs of $1.6 million, both of which are included in interest income/expense, net in the consolidated statement of operations and comprehensive income.

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

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

As of December 31, 2024, we have $115.3 million outstanding on the 2025 Notes.

We intend to use cash on hand, available borrowings of $50.0 million from the 2024 Term Loan (as defined below), and future cash flows from operations for the repayment of the 2025 Notes.

For more information , see Note 14—Debt, in the notes to the consolidated financial statements included elsewhere in this report.

See Note 13—Debt, in Part I.

Item 1 Financial Statements , for additional information.

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 (as defined herein) 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.

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

No sales were made under the Equity Distribution Agreement during 2025 or 2024.

Credit Facilities

On September 15, 2021, we entered into a credit agreement (the “Credit Agreement”), consisting of a $200.0 million Revolving 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.

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 drew $250.0 million under the Term Loan Facility on May 31, 2022 and used $170.2 million of the proceeds to settle the Company’s 2022 Notes, 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 March 6, 2025, we have outstanding $243.8 million under the 2021 Term Loan and the remaining borrowing capacity is $200.0 million.

As of December 31, 2024, we have $20.0 million available for borrowing under the Revolving Facility.

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

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

The proceeds of the 2024 Term Loan were used to pay fees and expenses incurred in connection with the closing of the 2024 Term Loan and delayed draw term loan, and will be used for

working capital and general corporate purposes, which may include repayment of our 2025 Notes.

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

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

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

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

On September 15, 2021, we entered into a Credit Agreement (the “Credit Agreement”), consisting of a $200.0 million Revolving Facility (the “Revolving Facility”), which was set to mature 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 was set to mature on September 15, 2028.

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 our 0.625% Convertible Senior Notes due June 1, 2022.

On March 27, 2024, we entered a first lien term loan facility (the “2024 Term Loan”), consisting of $175.0 million which was set to mature 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 were used to pay fees and expenses incurred in connection with the closing of the 2024 Term Loan and delayed draw term loan and was used for working capital and general corporate purposes, including the repayment of our 2025 Notes on July 15, 2025.

On August 21, 2025, we entered into a $475.0 million first lien term loan facility, consisting of a $75 million revolving credit facility and a $400.0 million term loan facility, both with maturities of August 21, 2030.

Proceeds from the 2025 Facility were used to refinance the Credit Agreement and 2024 Term Loan, mentioned above, and for working capital and general corporate purposes.

As of March 9, 2026, we had $399.0 million borrowings outstanding under the 2025 Term Loan.

For additional information on the Credit Facility, see Note 14—Debt in the notes to the consolidated financial statements included elsewhere in this report.

As of March 9, 2026, we have $75.0 million available for borrowing under the 2025 Revolving Facility.

See Note 13—Debt, in Part I.

Item 1 Financial Statements , for additional information.

Operating Leases

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

Cash from changes in working capital decreased primarily as a result of unfavorable changes in accounts receivable, partially offset by favorable changes accounts payable, accrued expenses and other current liabilities.

Net cash provided by operating activities increased in 2025 from 2024 primarily due to increases in revenue, partially offset by operating costs.

Cash Flows from Investing Activities

Net cash used in investing activities in 2024 and 2023 consisted of capital expenditures primarily related to internally developed software of $11.2 million and $12.5 million, respectively.

Net cash used in investing activities in 2025 and 2024 consisted of capital expenditures primarily related to internally developed software of $12.4 million and $11.2 million, respectively, partially offset by proceeds from the sale of fixed assets in 2025.

Cash Flows from Financing Activities

Net cash used in financing activities in 2025 of $88.7 million consisted primarily of the repurchase of the 2025 Notes for $115.0 million, term loan repayments of $410.4 million and $2.8 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options, partially offset by net proceeds from term loans of $439.5 million.

Net cash used in financing activities in 2024 of $56.5 million consisted primarily of the repurchase of the 2025 Notes for $158.8 million, term loan repayments of $12.5 million and $2.2 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the employee stock purchase plan and the exercise of stock options offset by $117.6 million net proceeds from the 2024 Term Loan.

Net cash used in financing activities in 2023 of $242.0 million consisted primarily of the repurchase of our 2025 Notes for $237.5 million and the related payment of debt issuance costs of $1.6 million, $1.1 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the employee stock purchase plan and the exercise of stock options and $1.9 million repayment of the Term Loan Facility.

Critical Accounting Policies and Estimates

The following disclosure is provided to supplement the description of our accounting policies contained in Note 2—Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this report regarding

significant areas of judgment.

Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with generally accepted accounting principles.

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A valuation allowance is provided on deferred tax assets if it is determined that it is “more likely than not” that the deferred tax asset will not be realized.

During the third quarter of 2022, we established a full valuation allowance against our net deferred tax assets due to historical cumulative pre-tax losses and continued pre-tax losses in the quarter.

We regularly review our deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences, and tax planning strategies.

During 2025, we recorded tax benefit of $149.5 million to reduce the valuation allowance we established in 2022 against our net deferred tax assets.

Management determined upon review of the deferred tax assets for recoverability that sufficient positive evidence existed to conclude a substantial portion of the valuation allowance was no longer needed.

Based on sustained profitability, improved forecasts of future taxable income, and the reversal of existing temporary differences, we concluded that it is more likely than not that we will be able to utilize the deferred tax assets.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

In determining the amount of the valuation allowance, we considered the scheduled reversal of deferred tax liabilities.

We will maintain a full valuation allowance on net deferred tax assets until there is sufficient evidence to support the reversal of some or all of the allowance.

We maintain a valuation allowance of $18.0 million primarily related to certain states for which we estimate the net operating losses will expire prior to being utilized and other deferred tax assets related to equity investments for which it is not more likely than not that the deferred tax assets will be realized.

Should there be a change in the valuation allowance in the future, the income tax provision would increase or decrease in the period in which the allowance is changed.

The indefinite carryforward period for certain deferred tax assets means that indefinite-lived deferred tax liabilities can be considered as support for realization of such deferred tax assets including post December 31, 2017 net operating loss carryovers, which can affect the need to record or maintain a valuation allowance for deferred tax assets.

During 2022, we incurred income tax expense of $139.4 million related to the valuation allowance.

At December 31, 2025, 2024 and 2023, we maintained a valuation allowance of $18.0 million, $167.5 million and $162.5 million, respectively, against our net deferred tax assets.

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The forms of stock-based awards granted to our employees are principally restricted stock units (“RSUs”), RSUs with performance conditions, stock options, and employee stock purchases related to the Employee Stock Purchase Plan (“Employee Stock Purchase Rights”).

Further, stock options with market conditions, restricted stock awards (“RSAs”) with performance conditions and RSAs with market conditions have been granted to our Chairman and Chief Executive Officer.

Further, stock options with market conditions, restricted stock awards (“RSAs”) with performance conditions and RSAs with market conditions have been granted to our current or former Chief Executive Officer.

The value of RSUs is measured at their grant dates as the fair value of common stock and amortized ratably as non-cash compensation expense over the vesting term.

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If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

At June 30, 2022, we assessed the qualitative factors in our impairment testing of goodwill and determined that the effects of the challenging interest rate environment, consumer price inflation, and the decline in our market capitalization required a quantitative impairment test be performed.

The quantitative goodwill impairment test found that the fair value of each reporting unit exceeded its carrying amount, indicating no goodwill impairment.

The property and casualty auto insurance industry experienced challenges in 2022 caused by inflation, supply chain challenges, and the rising severity and frequency of claims.

Additionally, the significant increase in mortgage interest rates in 2022 had a negative impact on our Mortgage reporting unit.

During the third quarter of 2023, our market capitalization declined significantly compared to the second quarter of 2023.

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

We incurred impairment charges of $58.4 million and $114.5 million on our investments in equity securities during 2024 and 2023, respectively.

We incurred impairment charges of $1.2 million, $58.4 million and $114.5 million on our investments in equity securities during 2025, 2024 and 2023, respectively.

See Note 7—Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional information.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis