Lendingtree Inc Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Youssef Squali - Truist Securities - Analyst : Great, thank you very much and good morning, guys. I guess on the dot, I was just wondering if you can help us better understand your thinking in terms of the rates environment. So what kind of rates environment is baked into that mid-single digit revenue growth for the year? I guess moving from expecting six cuts to maybe one or two, perhaps even a potential hike by year end, or how much risk does that pose to that guide? I guess what I'm trying to get to is how much of the guide is really within your control versus just macro. And then in your efforts to lean into marketing again for insurance and consumer, what gives you confidence that this is the right time? I guess for insurance, I understand it. For a consumer, maybe you can help us better understand kind of the drivers there. Thank you. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. APRIL 30, 2024 / 1:00PM, TREE.OQ - Q1 2024 Lendingtree Inc Earnings Call

Question: Youssef Squali - Truist Securities - Analyst : Great. Thank you both.

Question: Jed Kelly - Oppenheimer & Co. Inc. - Analyst : Hey, great. Just circling up, can you talk about your comments around the stable lending environment and what's giving you the confidence to lean back in? And then in the insurance segment, how should we view the outlook maybe over like the next 12 to 18 months? I know it's been really volatile. And can you talk about how we should think about periods where you're overearning?

Question: Jed Kelly - Oppenheimer & Co. Inc. - Analyst : Thank you.

Question: Jed Kelly - Oppenheimer & Co. Inc. - Analyst : No, I think it was clear. Thanks.

Question: Ryan Tomasello - Keefe, Bruyette & Woods, Inc. - Analyst : Hey, everyone. Thanks for taking the questions. Just wanted to start with Trent just on unpacking some of the guideposts for the year for revenue growth and VMMs baked into the guide by segment, maybe for 2Q in the full year. Overall, how much of the revenue guide increases being driven by insurance versus consumer or driven by the increased marketing efforts. Sounds like you're alluding to more of it being driven by insurance. But just curious if you can give us some hand holding for all the different moving pieces by segment here for the guidance. Thanks.

Question: Ryan Tomasello - Keefe, Bruyette & Woods, Inc. - Analyst : And then any color on just top-line revenue growth by segment, Trent, that you can give us?

Question: Ryan Tomasello - Keefe, Bruyette & Woods, Inc. - Analyst : And just one last follow-up here to put a finer point on the reinvesting, some of the margin back into marketing. Just trying to understand why we're not seeing VMD guide up here despite the significant revenue guide up. I mean, when should we expect these marketing efforts to start to translate into more VMM dollars? It sounds like you do expect the spend to be profitable, so just trying to understand that the puts and takes there.

Question: Ryan Tomasello - Keefe, Bruyette & Woods, Inc. - Analyst : Got it.

Question: Ryan Tomasello - Keefe, Bruyette & Woods, Inc. - Analyst : Got it. That makes sense. Thanks, Scott.

Question: John Campbell - Stephens Inc. - Analyst : Hey, guys. Good morning. This is, I think, the first time. Hey, I think it's the first time in 10 quarters we talked about a revenue beat. It's also been a long time since you raised the revenue guidance. So that is great. It seems like you guys are making some pretty measured turnarounds. But I wanted to click on the -- double-click on the insurance business. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. APRIL 30, 2024 / 1:00PM, TREE.OQ - Q1 2024 Lendingtree Inc Earnings Call I mean, it feels like the early stages of the potential super cycle. I think, Scott, you just mentioned that. This time it does feel a little bit sturdier than past cycles. But as far as the recovery, Scott, I think you also mentioned kind of broad -- it's largely broad base and not so much driven by one or two customers. I think the last kind of pump fake we have been maybe one large customer. But if you could unpack the results, maybe this quarter across click versus lead. And then I don't know if you want to go more broadly of maybe carrier versus the agent channel.

Question: John Campbell - Stephens Inc. - Analyst : Great to hear. I appreciate all that color. And on the home segment, that ended up being a key driver of the beat, at least relative to our model, but if I unpack it just relative to what we had, I'm thinking mortgage was maybe down 80% or so year over year just given the strength in HELOC. Is that right?

Question: John Campbell - Stephens Inc. - Analyst : Makes a lot of sense. Thanks guys.

Question: Melissa Wedel - J.P. Morgan Securities LLC - Analyst : Good morning. Thanks for taking my questions today. I was hoping to follow up on a couple of the comments from earlier about sequential strength into the second quarter, just based on piecing together comments across the different segments, certainly hearing the strength in insurance coming through also sounds like increased sequential revenue growth in Q2 for both home and consumer. Within consumer, should we think about that as being driven by small business? And noticeably absent from your comments for any sort of card trends that we did note the reference to Bank of America onboarding to TreeQual in the shareholder letter. I was hoping you could just elaborate on that a little bit and then maybe seek any seasonality in sort of home equity trends that you've seen historically. Thanks.

Question: Melissa Wedel - J.P. Morgan Securities LLC - Analyst : Thanks for that. Trent, I just asked too, is there typically anything we should think about in terms of seasonality or consumer behavior around home equity. Certainly understand there's a lot of HPA embedded in housing prices right now, but do you typically see an increase in demand for that type of product in the spring summer months? Thanks.

Question: Melissa Wedel - J.P. Morgan Securities LLC - Analyst : Got it. Thank you.

Question: Melissa Wedel - J.P. Morgan Securities LLC - Analyst : Got it. Thanks so much.

Question: Mike Grondahl - Northland Securities, Inc. - Analyst : Hey, thanks guys. Two questions. One, could you kind of talk about the significance of TreeQual getting into BofA on the credit card side? Kind of what's your goal for that? And then secondly, did you guys disclose home equity revenues or credit card revenues in the first quarter? Thanks.

Question: Mike Grondahl - Northland Securities, Inc. - Analyst : Got it. Thanks, guys.

Question: Madeleine Zhou - Susquehanna International Group, LLP - Analyst : Hi, thanks for taking my question. Can we just walk through the maps of the 2025 convertible notes? Because it looks like there's still a significant gap between cash on the balance sheet once you take out about $50 million in cash being necessary to keep on the balance sheet and the remaining balance of $284 million of the July 2025 convertible notes. Thanks.