Lendingtree Inc Q3 2023 Earnings Call Transcript

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

Question: Jed Kelly - Oppenheimer & Co. Inc. - Analyst : Hey. Great. Thanks for taking my question. Just two, if I may. Just digging into the consumer segment, I think personal loans were down. Can you just talk about the competition in that segment? One of your competitors reported last week had pretty strong results in that product. So can you talk about the competition? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2023 / 1:00PM, TREE.OQ - Q3 2023 Lendingtree Inc Earnings Call And then just circling back to the convertible. Can you talk about the cash flow profile? I think 4Q is typically your strongest free cash flow profile. How much cash you need to run the business? I think you said $50 million historically. And where we are in terms of wanting to get the debt refinanced? Thanks.

Question: Jed Kelly - Oppenheimer & Co. Inc. - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2023 / 1:00PM, TREE.OQ - Q3 2023 Lendingtree Inc Earnings Call

Question: Ryan Tomasello - Keefe, Bruyette & Woods, Inc. - Analyst : Good morning, everyone. Thanks for taking the questions. I was hoping you can put a finer point just elaborating on the comments from your prepared remarks around what you're seeing from carriers regarding their 2024 growth plans. Obviously, a recovery in the insurance business seems like the area you have most visibility around. So it would just be helpful if you could provide some guardrails around the different scenarios for that business next year. How fast it could inflect the margin profile? Whether that's sustainable as competition increases for that traffic? And just generally how you feel about the competitive positioning and the ability to take share as wallets increase?

Question: Ryan Tomasello - Keefe, Bruyette & Woods, Inc. - Analyst : Great. Thanks for all that color. And then separate question on just typical seasonality maybe for Trent. How are you thinking about that heading into the fourth quarter? Does the 4Q guidance assume that typical seasonality plays out or maybe some different assumptions, variables you're assuming given just the nature of the current environment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2023 / 1:00PM, TREE.OQ - Q3 2023 Lendingtree Inc Earnings Call

Question: John Campbell - Stephens, Inc. - Analyst : Hey, guys, good morning.

Question: John Campbell - Stephens, Inc. - Analyst : Hey, for insurance, I want to touch back on Ryan's question there, just based on the channel commentary. It feels like the arrows are certainly pointing in the right direction for recovery next year. But just on the segment, VMM outlook, I'm thinking maybe we should think about it like a seesaw effect maybe next year, like you get the revenue rebound and the VMM margin comes back in a bit or alternatively remains somewhat sluggish and then VMM stays at current levels. Is that generally the right way to think about it for next year?

Question: John Campbell - Stephens, Inc. - Analyst : Okay. That makes sense. Appreciate that. And then to what extent you guys can -- I'm hoping maybe you could run us through the strategic shifts and credit card. What you're looking to partner? How that economics work, maybe just at a high level? And then what do you think that credit bureau partnership can do for the business in the years ahead?

Question: John Campbell - Stephens, Inc. - Analyst : Okay. Makes sense to me. Thanks, guys.

Question: Chris Kennedy - William Blair & Company - Analyst : Good morning. Thanks for taking the questions. Doug, you've seen a lot of cycles in this business over time. Can you just talk about your competitive position today relative to prior cycles? And as the markets improve, talk about the earnings power of the business?

Question: Chris Kennedy - William Blair & Company - Analyst : Got it. Thank you. And then just can you talk about the margin profile? You've taken a lot of expenses out of the business and as the macro improves, can you talk about the long-term margin profile? Thank you.

Question: Chris Kennedy - William Blair & Company - Analyst : Thanks for taking the questions.

Question: Youssef Squali - Truist Securities - Analyst : Awesome. Thank you so much. So a question for Doug and maybe one for Trent. So Doug, just as you look at the potential turnaround in 2024 across the businesses, maybe, what early indicators are you tracking to identify the reversion, maybe, in underwriting standards by lenders across both the consumer segment and home segment, not as much insurance, I think you've discussed that. And then Trent, can you just help us think through the Q4 guide, and what's implied across growth across the three segments: home, consumer, and insurance please?

Question: Youssef Squali - Truist Securities - Analyst : [Okay], good color. Thank you, all.

Question: Robert Wildhack - Autonomous Research - Analyst : Good morning, guys. Wanted to go back to an earlier question. Can you speak to how the changes you're making to TreeQual will lead the position relative to competing products out there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2023 / 1:00PM, TREE.OQ - Q3 2023 Lendingtree Inc Earnings Call

Question: Robert Wildhack - Autonomous Research - Analyst : That's great. Thanks. And then can you just give some more detail on the investment impairment in the quarter? What was that in relation to it?

Question: Robert Wildhack - Autonomous Research - Analyst : Okay. Well, thanks. Just on that last piece, is it safe to assume that the majority of the goodwill impairment didn't come from your long-term outlook or projections for the business, but more from maybe the comparables or discount rates, things like that.

Question: Robert Wildhack - Autonomous Research - Analyst : Got it. Thank you, guys.

Question: Jamie Friedman - Susquehanna Financial Group - Analyst : Hi. Good morning. So it's helpful to have these early comments on 2024 in insurance. I'm just looking through the letter. And it sounds like you're optimistic about potential growth in that segment. I know it's early, but I was just wondering if you have any high-level comments on the potential for the other segments as well?

Question: Jamie Friedman - Susquehanna Financial Group - Analyst : Okay, thanks for that. And then, Trent was interpreting some of your prior comments about margin. Still, you've got actually from the low single digits into the teens in terms of adjusted EBITDA margin. Do you view that as structurally sustainable for the company or asked another way, is there any reason why that where you are now would not be structurally sustainable?

Question: Jamie Friedman - Susquehanna Financial Group - Analyst : Got it. Okay. Thank you all.

Question: Melissa Wedel - JPMorgan - Analyst : Good morning. Thanks for taking my call. I was hoping to circle back to some of your comments about TreeQual. I think Scott talked about expanding product offering to additional customers, providing a sub-prime and near-prime product or solution for customers through that TreeQual initiative. I just wanted to clarify, is that something that is entirely focused on subprime and near prime? Or would that extend into the prime offering as well?

Question: Melissa Wedel - JPMorgan - Analyst : Okay. That's helpful. And then the shareholder letter, you mentioned that it is being tested right now with a handful of partners on the platform. And could you give us a sense of what that testing timeline is like and when that might be rolled out more broadly? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2023 / 1:00PM, TREE.OQ - Q3 2023 Lendingtree Inc Earnings Call

Question: Melissa Wedel - JPMorgan - Analyst : Okay. Thanks for that. If I could follow-up on the rebranding and relaunch My LendingTree or now Spring. I had always had the impression that that was particularly focused or had particularly good engagement with personal loan consumers. Is there something that we should be thinking about differently with the relaunch of the app that you're planning shortly?