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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________
FORM 10-K
__________________________________________________
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-34063
__________________________________________________
LendingTree, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
26-2414818
(I.R.S. Employer Identification No.)
1415 Vantage Park Dr., Suite 700, Charlotte, North Carolina 28203
(Address of principal executive offices)(Zip Code)
(704) 541-5351
(Registrant's telephone number, including area code)
__________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $0.01 par value per share
Trading Symbol(s)
TREE
Name of each exchange on which registered
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any
Emerging growth company ☐
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 30, 2023, the aggregate market value of the voting common stock held by non-affiliates of the Registrant was approximately $238 million.
For the purposes of the foregoing calculation only, all directors and executive officers of the Registrant and a single stockholder who owned in excess of
20% of the voting common stock are assumed to be affiliates of the Registrant.
As of February 23, 2024, there were 13,042,789 shares of the Registrant's common stock, par value $.01 per share, outstanding.
Documents Incorporated By Reference:
Portions of the Registrant's proxy statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III herein. Such proxy
statement will be filed with the U.S. Securities and Exchange Commission within 120 days of the Registrant's fiscal year ended December 31, 2023.
TABLE OF CONTENTS
PART I
Table of Contents
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Item 3.
Item 4.
Properties
Legal Proceedings
Mine Safety Disclosures
PART II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
Item 6.
[Reserved]
Item 7.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 8.
Item 9.
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 10.
Directors, Executive Officers and Corporate Governance
Item 11.
Executive Compensation
PART III
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Item 14.
Principal Accounting Fees and Services
Item 15.
Exhibits, Financial Statement Schedules
Item 16.
Form 10-K Summary
PART IV
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This annual report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report”) contains “forward-
looking statements” within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements include statements related to our
anticipated financial performance, business prospects and strategy; anticipated trends and prospects in the various industries in
which our businesses operate; new products, services and related strategies; and other similar matters. These forward-looking
statements are based on management's current expectations and assumptions about future events, which are inherently subject
to uncertainties, risks and changes in circumstances that are difficult to predict. The use of words such as “anticipates,”
“estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and "forecasts" among others, generally identify forward-
looking statements.
Actual results could differ materially from those contained in the forward-looking statements. Factors currently known to
management that could cause actual results to differ materially from those in forward-looking statements include those matters
discussed below, including in Item 1A. Risk Factors.
Other unknown or unpredictable factors that could also adversely affect our business, financial condition and results of
operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in
this report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking
statements, which only reflect the views of LendingTree, Inc.'s management as of the date of this report. We undertake no
obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated
events or changes to future operating results or expectations, except as required by law.
Summary of Risk Factors
Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This
summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor
summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully
considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment
decision regarding our common stock.
•
Adverse conditions in the primary and secondary mortgage markets, as well as the general economy, have had and
could continue to have a material adverse effect on our business, financial condition and results of operations.
• We depend on the financial strength of our Network Partners and our relationships with them. Any adverse changes in
these relationships could adversely affect our business, financial condition and results of operations.
•
•
Any adverse changes in relationships with our Network Partners, or failure to meet certain metrics required by
Network Partners, could adversely affect our business.
Failure to maintain our reputation and brand recognition, or to attract and retain consumers in a cost-effective manner
could materially and adversely affect our business and results of operations. As such, adverse publicity from litigation
or governmental investigations could impact our business and financial condition and results of operations.
• We depend on search engines, online advertising and other online sources to attract visitors to our websites. If we are
unable to attract these visitors and convert them into consumer requests for our Network Partners in a cost-effective
manner, our business and financial results may be harmed.
• We rely on technology to operate our business and continue to implement substantial changes to our information
systems. Any software development actions that intentionally or unintentionally prioritize client value and/or project
restraints over more technical implementation and design considerations could result in disruptions to the Company
information systems that could materially adversely affect our operations.
•
•
•
•
Trends in the credit card industry, as well as the impact of the general economy on the ability of users to qualify for
credit cards, could harm our business, financial condition and results of operations.
Changes in the loan markets could harm our business, financial condition and results of operations.
Our insurance business, QuoteWizard, is significant to our revenue, and operational issues in this business could have
a material impact on our results of operations.
Our personal loan product is a key product within our Consumer segment. If lenders participating on our marketplace
decide to reduce their offerings of personal loans or if such loans become unattractive to consumers because of higher
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interest rates demanded by lenders or other reasons, then our results of operations and future growth prospects could
be materially and adversely affected.
•
•
•
•
Some of our products are new to the market and may fail to achieve or maintain customer acceptance and profitability.
The intended benefits of acquisitions may not be realized and acquisitions or strategic investments that we pursue may
not be successful and could disrupt our business and harm our financial condition.
If consumers do not find value in our Spring platform or other platforms or do not like the consumer experience on the
platform, the number of matches on our platform may decline, which would harm our business, financial condition and
results of operations.
If we fail to manage our people through the changes caused by economic challenges, our business and results of
operations could be harmed.
• We rely on the performance of highly skilled personnel. If we are unable to attract, retain, develop and motivate well-
qualified employees, our business and results of operations could be harmed.
•
A significant portion of our total revenue has historically been derived from one Network Partner, and our results of
operations could be adversely affected, if we lose significant business from this Network Partner.
• We participate in a highly competitive market and pressure from existing and new competitors may materially and
adversely affect our business, results of operations and financial condition. If any of our competitors are more
successful than we are at attracting and retaining customers or Network Partners, our business, financial condition and
results of operations could be materially and adversely affected.
•
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•
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•
Our success depends, in part, on the integrity of our systems and infrastructures. System interruption and the lack of
integration and redundancy in these systems and infrastructures may have a material and adverse impact on our
business, financial condition and results of operations.
Breaches or failures of our systems or website security, the theft, unauthorized access, acquisition, use, disclosure,
modification or misappropriation of personal information, the occurrence of fraudulent activity, or other data security-
related incidents may have a material and adverse impact on our business, financial condition and results of operations.
Failure to comply with past, existing or new laws, rules and regulations, or to obtain and maintain required licenses,
could materially and adversely affect our business, financial condition and results of operations.
Our collection, use, storage, disclosure, transfer and other processing of personal information could give rise to
significant costs and liabilities, including as a result of governmental regulation, conflicting legal requirements or
differing views of personal privacy rights, which may have a material and adverse impact on our business, financial
condition and results of operations.
Failure to obtain proper business licenses or other documentation, or to otherwise comply with local laws and
requirements regarding marketing, sales or services, may result in civil or criminal penalties and restrictions on our
ability to conduct business in that jurisdiction.
Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other
tax returns could adversely affect our operating results and financial condition.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
• We may become subject to intellectual property disputes, which are costly and may subject us to significant liability
and increased costs of doing business.
• We may fail to adequately obtain, maintain, enforce and protect our intellectual property and similar proprietary rights
or may be accused of infringing, misappropriating or otherwise violating intellectual property or similar proprietary
rights of third parties.
•
•
In the ordinary course of business, we are party to litigation involving contract, intellectual property and a variety of
other claims, which could adversely affect our business and financial condition.
If our Network Partners fail to produce required documents for examination by, or other affiliated parties fail to make
certain filings with, state regulators, we may be subject to fines, forfeitures and the revocation of required licenses.
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•
•
•
•
•
The possibility of additional future regulations, changing rule interpretations and examinations by regulatory agencies
may result in more stringent compliance standards and could adversely affect the results of our operations.
Fluctuations in our operating results, quarter to quarter earnings and other factors may result in significant decreases in
the price of our common stock.
One holder of our common stock owns a substantial portion of our outstanding common stock, which concentrates
voting control and limits your ability to influence corporate matters.
Our financial results fluctuate as a result of seasonality, which may make it difficult to predict our future performance
and may adversely affect our common stock price.
The conditional conversion feature of our outstanding convertible senior notes, if triggered, may adversely affect our
financial condition and operating results.
• We may not have the ability to pay off the Notes with our current cash and future cash flow, combined with our
borrowing capacity under our current Credit Facility, or raise the funds necessary to pay off the Notes upon their
maturity in July 2025.
•
Our hedge and warrant transactions may affect the value of the Notes and our common stock.
ITEM 1. Business
Our Company
PART I
LendingTree, Inc. (“LendingTree”, the “Company”, “we” or “us”) operates 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. Through
multiple branded marketplaces, LendingTree empowers consumers to shop for financial services the same way they would shop
for airline tickets or hotel stays, comparing multiple offers from a nationwide network of approximately 500 partners (which we
refer to as “Network Partners”) in one simple search, and choose the option that best fits their financial needs. Services include
mortgage loans, mortgage refinances, home equity loans and lines of credit, auto loans, credit cards, deposit accounts, personal
loans, student 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. We seek to match consumers with multiple providers who can offer them competing quotes for
the product(s) they are seeking. We believe our platform, consisting of a deep network of Network Partners across a broad array
of financial products, differentiates us from other loan or insurance comparison-shopping marketplaces which may focus on
fewer product offerings or partner with fewer service providers.
Our strategically designed and executed advertising and marketing campaigns (which we refer to as “performance
marketing”) span a wide array of digital and traditional media acquisition channels and promote our LendingTree and other
brands and product offerings. Our marketing efforts are designed to attract consumers to our websites, mobile applications and
toll-free telephone numbers. Interested consumers complete inquiry forms, providing detailed information about themselves and
the loans or other offerings they are seeking. We refer to such consumer inquiries as “consumer requests”. We then match these
consumer requests with Network Partners in our marketplace that are seeking to serve these consumers' needs. We generate
revenue from our Network Partners, generally at the time of transmitting a consumer request to them, in the form of a match
fee. In certain instances outside our mortgage business we charge other kinds of fees, such as closed loan or closed sale fees. In
addition to our primary consumer request data referral business, we also match consumers with Network Partners by offering
consumers the ability to click from our website to a Network Partner’s website or by calls for which Network Partners pay
either front-end or back-end fees.
We are continually working to improve the consumer experience. We have made investments in technologically-adept
personnel and we use in-market real-time testing to improve our digital platforms. Additionally, we work with our Network
Partners, including providing training and other resources, to improve the consumer experience throughout the process. Further,
we have been building and improving our Spring platform (previously MyLendingTree), which provides a relationship-based
consumer experience, rather than just a transaction-based experience.
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Evolution and Future Growth of Our Business
At its inception, our original business was to serve consumers seeking home mortgage loans by matching them with
various lenders. We launched the LendingTree brand nationally in 1998 and, over the last twenty-plus years, we have invested
significantly in this brand to gain widespread consumer recognition.
Since 2012, we have actively sought to expand the suite of financial services offerings we provide to consumers, in order to
both leverage the applicability of the LendingTree brand as well as more fully serve the needs of consumers and Network
Partners. We believe that consumers with existing LendingTree-branded associations will be more likely to utilize our other
service offerings than those of other providers whose brands consumers may not recognize.
Our Spring platform (previously called MyLendingTree) offers a personalized comparison-shopping experience, financial
health advice and credit simulations by providing free access to 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 have at a given
point in time. Customers can track the progress of their financial health over time based on actions they have taken, and see
recommended credit score improvement actions, loans or other products offered by LendingTree.
By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of
revenue. We intend to capitalize on our expertise in performance marketing, product development and technology by leveraging
the widespread recognition of the LendingTree brand.
We believe the consumer and small business financial services industry is in the middle stages of a fundamental shift to
online product offerings, similar to the shift that started in retail and travel many years ago and is now well established. We
believe that, like retail and travel, financial services consumers will continue to move towards online shopping and transactions
in response to which suppliers will increasingly shift their product offerings and advertising budgets toward the online channel.
We believe the strength of our brands and of our Network Partners places us in a strong position to continue to benefit from this
market shift.
Economic Conditions
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 2022, the challenging interest rate environment and persistent inflationary pressures presented challenges for many
of our mortgage lending and insurance partners. We saw the most significant impact in our Home segment as mortgage rates
nearly doubled in 2022, causing a sharp decline in refinance volumes and pressure on purchase activity. Although our
Insurance segment rebounded from the trough in the fourth quarter of 2021, the recovery was slower than expected as demand
from our carrier partners remained volatile as they continued to attempt to implement premium increases to offset the effect of
inflation on claims. In addition, the auto and home insurance industry was impacted in 2022 by persistent industry headwinds,
supply chain issues, rising accident severity and frequency, and hurricane losses.
During 2023, the challenging interest rate environment and inflationary pressures have continued to present challenges for
many of our mortgage lending 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%. The continued high mortgage rates in
2023 and home affordability issues continued to cause declines in refinance volumes and purchase activity. In our Insurance
segment, demand from our carrier partners remained volatile for much of the year as they continued to deal with persistent
industry headwinds. In the last months of 2023, we began to see advertising budgets from our carrier partners increase and we
are optimistic about the prospect for continued increases into 2024.
Segment Reporting
We have three reportable segments: Home, Consumer, and Insurance.
Products
Our Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and
lines of credit. 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 debt settlement. We ceased offering reverse
mortgage loans on our marketplace in the fourth quarter of 2022. We ceased offering credit repair products at the end of the
second quarter of 2023 when we shut-down our Ovation business. Our Insurance segment consists of insurance quote products
and insurance policies in our agency businesses.
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Segment revenue is as follows (in thousands):
Home
Consumer
Insurance
Other
Total revenue
For the Year Ended December 31,
2023
2022
2021
$
143,753 $
289,383 $
441,738
278,945
249,605
199
396,109
299,073
427
329,945
326,153
663
$
672,502 $
984,992 $ 1,098,499
LendingTree does not charge consumers for the use of our services. Revenues from our Home products are mostly derived
from upfront match fees paid by Network Partners that receive a consumer request, and in some cases upfront fees for clicks or
call transfers. Because a given consumer request form can be matched with more than one Network Partner, up to five match
fees may be generated from a single consumer request form. Revenues from our Consumer products are generally derived from
upfront match fees paid on delivery of a consumer request, click or call and closed loan fees. For our credit card product, we
send click traffic to issuers and are generally paid per card approval. Revenues from our Insurance products are primarily
derived from upfront match fees, and upfront fees for website clicks or fees for calls, earned through the delivery of consumer
requests, as well as commissions earned on policy sales in our agency businesses.
For the years ended December 31, 2023, 2022 and 2021 no Network Partners accounted for more than 10% of total
consolidated revenue.
Home Segment
We partner with lenders throughout the United States to provide full geographic lending coverage and to offer a complete
suite of loan offerings on our marketplace. To participate on our marketplace, lenders are required to enter into contracts with
us that state the terms and conditions for such participation, although these contracts generally may be terminated for
convenience by either party. We perform certain due diligence procedures on prospective new lenders, including screening
against a national anti-fraud database maintained by the Mortgage Asset Research Institute, which helps manage our risk
exposure. The data is utilized to determine whether a lender and its principals are eligible to participate on our marketplace and
have not been convicted of and/or penalized for fraudulent activity.
Consumers seeking purchase or refinance mortgages through our loan marketplace can receive multiple conditional loan
offers from participating lenders in response to a single consumer request form. We refer to the process by which we match
consumers and Network Partners as the “matching process”. This matching process consists of the following steps:
(1) Consumer Request. Consumers complete a single request form with information regarding the type of mortgage loan
product they are seeking, loan preferences and other data. Consumers also consent to a soft inquiry regarding their
credit and to have lenders contact them.
(2) Consumer Request Form Matching and Transmission. Our proprietary systems and technology match a given
consumer’s request form data, credit profile and geographic location against certain pre-established criteria of Network
Partners, which may be modified from time to time. Once a given request passes through the matching process, the
request is automatically transmitted to up to five participating Network Partners.
(3) Lender Evaluation and Response. Network Partners that receive a consumer request form evaluate the information
contained in it to determine whether to make a conditional loan offer.
(4) Communication of a Conditional Offer. All matched Network Partners and any conditional offers are presented to
the consumer upon completion of the consumer request form. Consumers can return to the site and view their offer(s)
at any time by logging in to their Spring profile. Additionally, matched lenders and offers are also sent to the email
address associated with the consumer request.
We also offer matches to providers of other Home lending products on our online marketplace include the following:
•
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Home equity loans and lines of credit, which enable home owners to borrow against the equity in their home, as
measured by the difference between the market value of the home and any existing loans secured by the home. Home
equity loans are one-time lump sum loans, whereas a home equity line of credit reflects a line of revolving credit
where the borrower has flexibility to draw down and repay the line over time.
Reverse mortgage loans, which were loan products available to qualifying homeowners age 62 or older. We ceased
offering matches to providers of reverse mortgage loans in the fourth quarter of 2022.
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Consumer Segment
Consumer lending products on our online marketplace include information, tools and access to multiple conditional loan
offers for the following:
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Auto, which includes our auto refinance and purchase loan products. Auto loans enable consumers to purchase new or
used vehicles or refinance an existing loan secured by an automobile.
Credit cards, which include offerings from most major card issuers.
Personal loans, which are typically unsecured obligations generally carrying shorter terms and smaller loan amounts
than home mortgages.
Small business loans, which include a broad array of financing types including, but not limited to, loans secured by
working capital, equipment, real estate and other forms of financing, provided to small and medium-sized businesses.
Student loans, which includes both new loans to finance education and related expenses, as well as refinancing of
existing loans.
Non-lending Consumer products also includes information, tools and access to the following:
•
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Deposit accounts, through which consumers can access depository deals and analysis covering all major deposit
product categories.
Credit repair, through which consumers can obtain assistance improving their credit profiles, in order to expand and
improve loan and other financial product opportunities available to them. We ceased offering credit repair products at
the end of the second quarter of 2023 when we shut-down our Ovation business.
Debt relief services, through which consumers can obtain assistance negotiating existing loans.
We refer to the various purchasers of leads from our other marketplaces as lead purchasers. We generate revenue from the
deposit account product when a consumer clicks from our website through to a financial institution's website. We generate
revenue from debt relief services through a fee for a customer referral to a service provider partner or through a fee at the time a
consumer enrolls in a program with one of our Network Partners.
Insurance Segment
Our Insurance segment includes information, tools and access to insurance quote products, including automobile, home,
health and Medicare, through which consumers are matched with insurance lead aggregators to obtain insurance offers, as well
as insurance policies in our agency businesses. Our QuoteWizard business is one of the largest insurance comparison
marketplaces in the growing online insurance advertising market. ValuePenguin, a personal finance website that offers
consumers objective analysis on a variety of financial topics from insurance to credit cards, is also part of our Insurance
segment.
We intend to continue adding new offerings for consumers, small businesses and Network Partners on our online
marketplace, in order to grow and diversify our sources of revenue. We may develop such new offerings through internal
product development efforts, strategic business relationships with third parties and/or acquisitions.
Seasonality
Revenue in our Home segment is subject to cyclical and seasonal trends. Home sales (and purchase mortgages) typically
rise during the spring and summer months and decline during the fall and winter months, while refinancing and home equity
activity is principally driven by mortgage interest rates as well as real estate values. However, in certain historical periods
additional factors affecting the mortgage and real estate markets, such as the current high interest rate economic period, the
2008-2009 financial crisis and related recession as well as the economic conditions related to the COVID-19 pandemic, have
impacted customary seasonal trends.
Our personal loan product experiences less consumer demand during the fourth and first quarters of each year. We also
anticipate less consumer demand for credit cards in the fourth quarter of each year, and we anticipate higher consumer demand
for deposit accounts in the first quarter of each year. The majority of consumer demand for in-school student loan products
occurs in the third quarter coinciding with collegiate enrollment in late summer. Other factors affecting our businesses include
macro factors such as credit availability in the market, interest rates, inflation, the strength of the economy and employment.
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Competition
Our businesses compete with other online marketing companies, including online intermediaries that operate network-type
arrangements. We also face competition from lenders and insurance agents that source consumers directly. These companies
typically operate consumer-branded websites and attract consumers via online banner ads, keyword placement on search
engines, direct mail, television ads, retail branches, realtors, brokers, radio and other sources, partnerships with affiliates and
business development arrangements with others, including major online portals.
Corporate History
LendingTree, Inc. is the parent of LT Intermediate Company, LLC, which holds all of the outstanding ownership interests
of LendingTree, LLC. LendingTree, LLC also owns several companies. LendingTree, Inc. was incorporated in the state of
Delaware in June 1996 and commenced nationwide operations in July 1998.
In May 2003, IAC/InterActiveCorp (“IAC”) acquired LendingTree, LLC, which at the time of the acquisition was known
as LendingTree, Inc. Following the acquisition, in December 2004, IAC converted LendingTree, Inc. to a Delaware limited
liability company, LendingTree, LLC.
In April 2008, IAC formed Tree.com, Inc. (now known as LendingTree, Inc.), a Delaware corporation, which held all of
the ownership interests of LendingTree, LLC. In August 2008, Tree.com Inc., including its wholly-owned subsidiary,
LendingTree, LLC, was spun off from IAC and became the separately publicly-traded company that we are today.
Effective January 1, 2015, we changed our name from Tree.com, Inc. to LendingTree, Inc.
Regulation and Legal Compliance
We market and provide services in heavily regulated industries through a number of different online and offline channels
across the United States. As a result, we are subject to a variety of federal and state laws and regulations, including:
•
•
•
•
•
The Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, Fair and Accurate Credit
Transactions Act of 2003 (“FACTA”), the Fair Housing Act, the Real Estate Settlement Procedures Act (“RESPA”),
and similar state laws, all of which place certain restrictions on the manner in which consumer loans are marketed and
originated, and some of which impose restrictions on the amount and nature of fees that may be charged to lenders and
real estate professionals for providing or obtaining consumer loan requests.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which imposes, among other things, limitations on
fees charged by mortgage lenders, and requirements related to mortgage disclosures.
Federal and state licensing laws.
Federal and state laws, which impose restrictions on activities conducted through telephone, mail, email, mobile device
or the Internet, including the Telemarketing Sales Rule (“TSR”), the Telephone Consumer Protection Act (“TCPA”),
the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) and the Federal
Trade Commission Act.
Federal and state laws and regulations relating to data privacy and security, including the Gramm-Leach-Bliley Act
(“GLBA”), which may impact how we collect, use, store, share and otherwise process personal information of
consumers and other individuals.
See “Risk Factors—Risks Related to Legal, Compliance and Regulations” for additional information and a discussion of our
regulatory risks.
Intellectual Property
We believe that our intellectual property and proprietary rights are vital to our success. To protect our intellectual property
and proprietary rights in our brand, technology, products, services, data, improvements and inventions, we rely on a
combination of patent, trademark, copyright, trade secret, and other laws, as well as contractual restrictions on disclosure, such
as confidentiality agreements with strategic partners, employees, consultants and other third parties. However, we cannot
guarantee that such laws or contractual restrictions will provide us with sufficient protection or that we have entered into
confidentiality agreements with each party that has or may have had access to our confidential or proprietary information,
know-how or trade secrets.
As we develop or identify new or improved proprietary technologies, we seek patent protection in the United States and
abroad, as appropriate. As of December 31, 2023, we owned one (1) issued U.S. patent related to the system and method for
collecting financial information over a global communications network, that expires in 2032. We also owned one (1)
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provisional U.S. patent related to systems and methods for optimizing software development and testing that expired on January
30, 2024.
Many of our services are offered under proprietary trademarks and service marks. We believe that our LendingTree
trademark, which is applied to all of our services, including our acquired businesses, creates positive responses in network
partners and consumers. We generally apply to register or secure by contract our principal trademarks and service marks as
they are developed and used. As of December 31, 2023, we owned 60 trademarks and service marks, 53 of which are registered
with the United States Patent and Trademark Office (“USPTO”), and seven of which have applications pending with the
USPTO but have not yet been registered. These registrations can typically be renewed at 10-year intervals.
In addition, we reserve and register domain names when and where we deem appropriate. As of December 31, 2023, we
owned approximately 1,550 registered domain names. We also have agreements with third parties that provide for the licensing
of patented, copyrighted and other proprietary technology used in our business.
Our success significantly depends on our ability to obtain, maintain, enforce and protect our intellectual property and
proprietary rights and operate our business without infringing, misappropriating or otherwise violating any intellectual property
or proprietary rights of third parties. However, there can be no assurance that our efforts will be successful. Even if our efforts
are successful, we may incur significant costs in defending our intellectual property and proprietary rights or combatting
allegations by third parties. From time to time, we may be subject to legal proceedings or claims, or threatened legal
proceedings or claims, including allegations of infringement, misappropriation or other violations of third-party patents,
trademarks, copyrights, trade secrets or other intellectual property or proprietary rights of third parties. In addition, the use of
litigation and other dispute resolution processes, such as Uniform Domain Name Dispute Resolution, may be necessary for us
to enforce our intellectual property rights, including our trade secrets, or to determine the validity and scope of intellectual
property or proprietary rights claimed by others. See “Risk Factors” for a more comprehensive description of risks related to
our intellectual property.
Human Capital Resources
We are committed to investing in our employees, and nurturing an entrepreneurial and dynamic work environment. We
achieve this through dedication to our core principles which include: building truly outstanding products, being open and
candid, acting with urgency and creativity, taking charge, setting goals and being accountable, and committing to excellence.
Employees are stockholders of the Company, allowing them to take charge and have a direct impact on company choices. We
provide individual, career and leadership development opportunities to strengthen skills. We have implemented strong policies
and practices to foster a safe and inclusive workplace allowing employees to develop and reach their full potential, and although
our employees hold many values in common, our leadership team actively works to attract, develop, and retain talent from a
range of backgrounds and experiences in order to benefit from diverse perspectives. The Company and our employees are
committed to helping our communities thrive through a variety of Company-sponsored annual and ongoing community
outreach efforts.
As of December 31, 2023, we had 870 employees, of which approximately 860 are full-time and 10 are temporary or part-
time. None of our employees are represented under collective bargaining agreements and we consider our relations with
employees and independent contractors to be good.
Additional Information
Website and Public Filings
We maintain a corporate website at www.lendingtree.com and an investor relations website at investors.lendingtree.com.
None of the information on or accessible through our websites is incorporated by reference in this report, or in any other filings
with, or in any information furnished or submitted to, the Securities and Exchange Commission (the “SEC”).
We make available, free of charge through our website, our Annual Reports on Form 10-K, our Quarterly Reports on Form
10-Q, our Current Reports on Form 8-K, our proxy statement for our annual shareholders' meeting and beneficial ownership
reports on Forms 3, 4 and 5 as soon as reasonably practicable after we file such material with, or furnish such material to, the
SEC. Our filings with the SEC are available to the public at the SEC's website at www.sec.gov.
Code of Business Conduct and Ethics
Our code of business conduct and ethics, which applies to all employees, including all executive officers and senior
financial officers and directors, is posted on the investor relations section of our website. Any amendments to or waivers of the
code of business conduct and ethics that are of the type described in Item 406(b) and (d) of Regulation S-K will be disclosed on
our website or in public filings to the extent required by the applicable rules.
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ITEM 1A. Risk Factors
Risk Factors
Investing in our common stock involves a high degree of risk. Before making an investment decision, you should carefully
consider the risks described below, together with all of the other information included in this annual report and the information
incorporated by reference herein. If any of the risks described below, or incorporated by reference into this annual report
actually occur, our business, financial condition or results of operations could suffer. In that case, the trading price of our
common stock may decline and you may lose all or part of your investment. The risks and uncertainties we have described are
not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial
may also affect our business, financial condition and results of operations. Certain statements below are forward-looking
statements. See the information included under the heading “Cautionary Statement Regarding Forward-Looking Information”
included elsewhere in this annual report.
Risks Related to our Business
Adverse conditions in the primary and secondary mortgage markets, as well as the general economy, have had and could
continue to have a material adverse effect on our business, financial condition and results of operations.
Constraints in the primary and secondary mortgage markets in the past have had, and may continue to have, an adverse
effect on our business, financial condition and results of operations. Generally, increases in interest rates adversely affect the
ability of our mortgage Network Partners to close loans, and adverse economic trends limit the ability of our mortgage Network
Partners to offer home loans other than low-margin conforming loans. Our businesses have experienced, and will likely
continue to experience a decline in demand for their offerings due to decreased consumer demand as a result of the conditions
described above, now or in the future. The high interest rates in 2022 and 2023 and home affordability significantly impacted
our mortgage business and continue to do so. The decreased consumer demand for mortgage refinancing typically leads to
decreased traffic to our website and higher associated selling and marketing efforts associated with that traffic. While higher
lender demand during these periods often leads to an increase in the amount lenders will pay per matched lead and higher
revenue earned per consumer, increases in the amount lenders will pay per matched lead in this situation is limited by the
overall cost models of our lenders, and our revenue earned per consumer can be adversely affected by the overall reduced
demand for refinancing in a rising interest rate environment. Conversely, during periods with decreased interest rates, mortgage
Network Partners have less incentive to use our marketplaces, or in the case of sudden increases in consumer demand, our
mortgage Network Partners may lack the ability to support sudden increases in volume. Situations like this could have a
material adverse effect on our business, financial condition and results of operations.
We depend on the financial strength of our Network Partners and our relationships with them, and any adverse changes in
these relationships could adversely affect our business, financial condition and results of operations.
Our success depends in significant part on the financial strength of lenders, insurers and lead purchasers participating on
our marketplaces and continuing relationships with such lenders, insurers and lead purchases. Network Partners could, for any
reason, experience financial difficulties and cease participating on our marketplaces, fail to pay match and/or closing fees when
due, determine to temporarily suspend or terminate their relationship with us and/or drop the quality of their services to
consumers. We could also have commercial or other disputes with such Network Partners from time to time. The occurrence of
one or more of these events with a significant number of Network Partners could, alone or in combination, have a material and
adverse effect on our business, financial condition and results of operations.
Any adverse changes in relationships with our Network Partners, or failure to meet certain metrics required by Network
Partners, could adversely affect our business.
We compete against other online marketing companies in significant part based on the quality and convertibility of the
leads we generate. Network Partners have expectations as to the quality and conversion rate of the leads that we generate and
such expectations could change over time. The leads that we supply to Network Partners may not meet the expectations that
they have for such leads. Conversion rates for leads may be impacted by factors other than the lead quality, many of which are
outside our control. Such factors include competition in lending and insurance markets and sales and marketing practices of
Network Partners. Failure to meet the expectations of Network Partners in terms of quality and convertibility of leads may
result in reduced fees paid to us by such Network Partners, or in extreme cases, the loss of one or more Network Partners,
which could materially and adversely affect our business, financial condition and results of operations.
In addition, because our businesses do not have exclusive relationships with Network Partners, consumers may obtain
loans, insurance and other financial products from these third-party service providers without having to use our marketplaces.
Network Partners can offer loans, insurance and other financial products directly to consumers through their own marketing
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campaigns or other traditional methods of distribution, such as referral arrangements, physical store-front operations or broker
agreements. Network Partners may also offer loans, insurance and other financial products and services to prospective
customers online directly, through one or more online competitors or other business, or both. If a significant number of
consumers seek loans, insurance and other financial products and services directly from Network Partners or through our
competitors as opposed to through our marketplaces, our business, financial condition and results of operations could be
materially and adversely affected.
Failure to maintain our reputation and brand recognition and attract and retain consumers in a cost-effective manner could
materially and adversely affect our business and results of operations. As such, adverse publicity from litigation or
governmental investigations could impact our business and financial condition and results of operations.
In order to attract visitors to our websites, convert these visitors into loan or other financial product requests for our
Network Partners and lead purchasers and generate repeat visits from consumers, our businesses must promote and maintain
their reputations and various brands. Brand promotion and maintenance requires the expenditure of considerable money and
resources for online and offline advertising, marketing and related efforts, as well as the continued provision and introduction of
high-quality products and services that meet the needs of consumers at competitive prices, the ability to maintain consumers'
trust, and the ability to successfully differentiate our brand, products and services from those of our competitors.
Brand recognition is a key differentiating factor among providers of online services. We believe that continuing to build
and maintain the recognition of our various brands is critical to achieving increased demand for the services provided by our
businesses. Accordingly, we have spent, and expect to continue to spend, significant amounts on, and devote significant
resources to, branding, advertising and other marketing initiatives, which may not be successful or cost-effective. Our brand
promotion activities may not generate consumer awareness or yield increased revenue, and even if they do, any increased
revenue may not offset the expenses we incur in building our brand.
Adverse publicity and the potential corresponding impact on our reputation may be accelerated and amplified by the
widespread use of social media platforms. Furthermore, adverse publicity, from legal proceedings against us or our businesses,
including governmental proceedings and consumer class action or other litigation, or the disclosure of information from
security breaches or other incidents, could negatively impact our reputation and our various brands, which could materially and
adversely affect our business and financial condition and results of operations. In addition, the actions of our third-party
marketing partners who engage in advertising on our behalf could negatively impact our reputation and our various brands.
The failure of our businesses to maintain or enhance the reputation and recognition of their respective brands and attract
and retain consumers in a cost-effective manner could materially and adversely affect our business, financial condition and
results of operations.
We depend on search engines, online advertising and other online sources to attract visitors to our websites, and if we are
unable to attract these visitors and convert them into consumer requests for our Network Partners in a cost-effective
manner, our business and financial results may be harmed.
Our success depends on our ability to attract online consumers to our websites and convert them into customers in a cost-
effective manner. We depend, in part, on search engines, online advertising and other online sources for our website traffic. We
are included in search results as a result of both paid search listings, where we purchase specific search terms that result in the
inclusion of our advertisement, and, separately, organic searches, that depend upon the searchable content on our sites. Search
engines and other online sources revise their algorithms, and introduce new advertising products, from time to time in an
attempt to optimize their search results.
If one or more of the search engines or other online sources on which we rely for website traffic were to modify its general
methodology for how it displays our websites, resulting in fewer consumers clicking through to our websites, our business
could suffer. If our online advertisements are not able to reach certain consumers due to consumers' use of ad-blocking software
or other ad-blocking capabilities, our business could suffer. Any required changes in targeting and other related consumer
acquisition practices and techniques, such as the upcoming deprecation of third-party cookies, could impair our ability to
acquire consumers efficiently and our business could suffer. Furthermore, if any free search engine traffic on which we rely
begins charging fees for listing or placement, or if one or more of the search engines or other online sources on which we rely
for purchased listings, modifies or terminates its relationship with us, our expenses could rise, we could lose customers, and
traffic to our websites could decrease, all of which could have a material adverse effect on our business, financial condition and
results of operations.
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We rely on technology to operate our business and continue to implement substantial changes to our information systems.
Any changes in our systems or failure to appropriately balance between the introduction of new capabilities and managing
of existing systems present risk of interruption in our systems, which could result in disruptions to our information systems
that could materially adversely affect our operations.
We are dependent on the use of technology systems like our Spring platform as well as backend systems to support our
strategic objectives. Implementation and integration of complex systems and technology present significant challenges in terms
of costs, human resources, and development of effective internal controls. Implementation and integration require a balancing
between the introduction of new capabilities and the managing of existing systems, and present the risk of operational or
security inadequacy or interruption, which could materially affect our ability to effectively operate our business and/or could
negatively impact our results of operations.
In the ordinary course of business, our systems continue to require modification and refinements to address operational
reliability, growth, and changing business requirements. In addition, our systems may require modification to enable us to
comply with changing regulatory requirements. Our operations could be adversely affected, or we could face imposition of
regulatory penalties, if it were unable to timely or effectively modify our systems as necessary or appropriately balance the
introduction of new capabilities with the management of existing systems.
In the future, we directly or through our third-party provided information technology systems or software may incorporate
artificial intelligence (“AI”) capabilities into our business. As with many innovations, AI presents risks, challenges, and
unintended consequences that could affect its adoption, and therefore our business. AI algorithms and training methodologies
may be flawed, ineffective or inadequate. AI development or deployment practices by us or third-party providers could result
in incidents that could increase the resources we need to implement cybersecurity measures to protect the security of our data.
These deficiencies and other failures of any potential AI systems could subject us to competitive harm, regulatory action, legal
liability, and brand or reputational harm.
Trends in the credit card industry, as well as the impact of the general economy on the ability of users to qualify for credit
cards, could harm our business, financial condition and results of operations.
Our credit card product offering is subject to particular risks, including, but not limited to:
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adverse conditions in the economy may affect credit card issuers and their willingness to issue new credit which would
negatively affect revenue;
credit losses among credit card issuers may increase beyond normal and budgeted levels which could cause a reduction
in credit card issuers' ability to extend credit;
interest rate increases may make balance transfer cards less profitable for issuers;
credit card issuers and other advertisers in the business verticals in which we operate may be unwilling to advertise on
our websites or mobile applications;
changes in application approval rates by credit card issuer customers;
increased competition and its effect on our website traffic, click-through rates, advertising rates, revenue, margins, and
market share;
our ability to provide competitive service to credit card issuers and to consumers using our online offerings and other
platforms;
credit card issuers may determine that the online digital marketing channel is no longer a viable marketing platform for
generating new credit card customers;
decreases in consumer interest in credit card products;
our ability to maintain brand recognition for both LendingTree and CompareCards and to effectively leverage the
LendingTree brand with the CompareCards brand; and
our ability to develop new products and services and enhance existing ones.
If our credit card product is impacted by the risks described above, then our results of operations and future growth
prospects could be materially and adversely affected.
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Economic conditions, including changes in the consumer lending and insurance markets could harm our business,
financial condition and results of operations.
Our business is dependent on the products offered by our Network Partners across the consumer financial services and
personal insurance industries. Changes in economic conditions, including general factors such as a slower pace of economic
growth or recessionary periods, could negatively impact these industries and our business. Additionally, the lending products
our Network partners offer within our Home and Consumer segments are dependent upon, among other things, the overall level
of interest rates, home prices, availability of credit in the financial market and changes in underwriting standards. Our
Insurance segment is dependent on the personal auto and home insurance industry, which can be negatively impacted by
inflation, supply chain issues, rising car accident severity and frequency, as well as natural disasters such as hurricanes.
Additionally, the health of the lending markets our Network Partners operate in, including purchase and refinance
mortgages, home equity, business loans, personal loans, and credit card, are important to our business. Fluctuations and
constraints in these markets in the past have harmed, and may in the future, harm our business, financial condition and results of
operations. Economic factors such as increased interest rates, slow economic growth or recessionary conditions, the pace of
home price appreciation or outright depreciation, changes in household debt levels, and increased unemployment or stagnant or
declining wages can affect the lending markets broadly. National or global events, such as the COVID-19 pandemic, can also
affect such macroeconomic conditions. These factors can affect the number of consumers applying for loans and overall loan
approval rates, which can adversely affect our business. Increases in interest rates driven by the Federal Reserve Board’s
Federal Open Market Committee to combat a historically high rate of inflation may continue or decreases in interest rates may
be delayed. Additional rate increases could pressure consumer demand for mortgage products, as well as our business, personal
and credit card products, and thus could negatively impact our business.
Our insurance business, QuoteWizard, is significant to our revenue, and operational issues in this business could have a
material impact on our results of operations.
Our QuoteWizard business poses risks for our ongoing operations, including, but not limited to:
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adverse conditions in the economy may affect insurance carriers and their willingness to issue policies;
covered losses among insurance carriers may increase beyond normal and budgeted levels which could cause a
reduction in demand for leads;
insurance carriers and other advertisers in the business verticals in which we or QuoteWizard operate may be unwilling
to advertise on our or QuoteWizard’s websites or mobile applications;
concentration of customers with large insurance carriers may cause significant budget reductions from these customers
and may impact our business;
• major publishers may determine they no longer want QuoteWizard as an advertising partner;
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changes in underwriting approval rates by insurance carrier customers;
increased competition and its effect on our or QuoteWizard’s website traffic, click-through rates, advertising rates,
revenue, margins, and market share;
the cost of media may rise at a faster pace than QuoteWizard's monetization of traffic;
ability to provide competitive service to insurance carriers and to consumers using QuoteWizard’s and our online
offerings and other platforms;
insurance carriers may determine that the online digital marketing channel is no longer a viable marketing platform for
generating new insurance customers;
government regulatory agencies may hinder or disallow the operation of QuoteWizard's marketplace;
new government regulations and/or laws that affect the ability of private insurance carriers to market products directly
to the consumer;
new government regulations and/or laws that would replace private insurance programs with government run
programs;
our ability to maintain brand recognition for both LendingTree and QuoteWizard and to effectively leverage the
LendingTree brand with the QuoteWizard brand;
our ability to develop new products and services and enhance existing ones;
our ability to retain key employees of QuoteWizard;
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costs and expenses associated with any undisclosed or potential liabilities;
that the business acquired in the acquisition may not continue to perform as well as anticipated; and
ongoing operating risks, including liabilities arising from data privacy and security laws and regulations or security
breaches.
If the QuoteWizard business is impacted by the risks described above, then our results of operations and future growth
prospects could be materially and adversely affected.
Our insurance agency businesses pose unique risks that may have a material adverse impact on our results of operations.
Our Property and Casualty insurance agency businesses employ a different business model than the rest of our businesses
and are subject to unique risks because of our role in selling insurance policies direct to consumers. In that role, we act as agents
of insurance carriers or of other insurance agents, known as uplines, that we contract with. We must secure and maintain
contracts with those carriers and agents and our individual agents must be state-licensed. Our revenues are generated from sales
commissions, which are based upon the insurance premiums of policies sold, and our models to determine the appropriate
policies for consumers. Our models could be incorrect and we could generate less revenue than expected. We could also lose
appointments with carriers or uplines that affect our ability to sell policies and generate revenue. Carrier losses, which could
result from increased repair time and costs due to inflation and supply chain issues in the automotive and housing industries,
among other issues, could cause carriers to reduce commissions or increase premiums, both of which would have a negative
effect on us. Insurance carriers could increase premiums to the point where we cannot profitably sell policies or consumers
forego the purchase of insurance. Our licensed insurance agents are critical to our agency business and our inability to attract
and retain effective agents or for them to obtain or retain their licenses to sell policies could have a negative impact on our
results of operation.
Our personal loan product is a key product within our Consumer segment. If lenders participating on our marketplace
decide to reduce their offerings of personal loans or if such loans become unattractive to consumers because of higher
interest rates demanded by lenders or other reasons, then our results of operations and future growth prospects could be
materially and adversely affected.
Personal loans are typically unsecured obligations and generally carry shorter terms and smaller loan amounts than
mortgages. Because they are unsecured, they are generally riskier assets for lenders than mortgages or other secured loans.
Consumer demand for unsecured loans offered on our marketplace is often for refinancing of higher interest credit card debt or
for a lower interest alternative to credit card debt for a contemplated large purchase that would otherwise be purchased with a
credit card. Lenders participating on our marketplace may reduce their willingness to make personal loans at more attractive
interest rates than credit card debt and may, for that reason or for any other reason, reduce their demand for requests generated
from our personal loan marketplace. Reasons that lenders might reduce their willingness to make personal loans at attractive
interest rates may include regulatory changes, stricter institutional lending criteria, a lack of adequate funding sources or capital
for loan originations, or increased borrower default levels, which may occur upon adverse changes in regional, national or
global economic conditions. Additionally, lenders may tighten their underwriting standards, making it more difficult for
consumers to qualify for personal loans. Personal loan lenders are increasingly focused on profitability and are attempting to
reduce their acquisition costs of new customers. If lenders participating on our marketplace decide to reduce their offerings of
personal loans, tighten their underwriting standards, or if personal loans become unattractive to consumers because of higher
interest rates demanded by lenders or other reasons, then our results of operations and future growth prospects could be
materially and adversely affected.
Our financial condition and results of operations have been and may continue to be adversely affected by public health
issues, including epidemics or pandemics such as COVID-19.
We face various risks related to public health issues, including epidemics, pandemics, and other outbreaks, including the
global outbreak of COVID-19. The COVID-19 pandemic negatively impacted the global economy, disrupted global supply
chains, created significant volatility and disruption in financial markets, and, at times, increased unemployment levels. In
addition, the pandemic resulted in temporary closures of many businesses and the institution of various lockdown orders and
sheltering in place requirements in many states and communities. As a result, the demand for our products, in particular in our
Consumer segment, was significantly impacted. The full impact of COVID-19 or any widespread public health issue on our
financial condition and results of operations will depend on the duration and scope of an outbreak (including any potential
future waves, the emergence or re-emergence of variants and their transmissibility, and the success of vaccination programs and
treatments), its impact on our consumers and our Network Partners, how quickly normal economic conditions, operations, and
the demand for our services and products can resume, and any permanent behavioral changes that the pandemic may cause.
The extent to which the COVID-19 pandemic or any widespread public health issue impacts our business, financial condition
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and results of operations, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are
highly uncertain and cannot be predicted.
Some of our products are new to the market and may fail to achieve or maintain customer acceptance and profitability.
We have, in the past, launched a number of new products and may, in the future, launch new products. We do not have as
much experience with new products as with the other more mature products. Accordingly, new products may be subject to
greater risks than our more mature products.
The success of our new products will depend on a number of factors, including, but not limited to:
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implementing, at an acceptable cost, product features offered by our competitors and/or expected by consumers,
lenders and lead purchasers;
• market acceptance by consumers, lenders and lead purchasers;
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offerings by current and future competitors;
our ability to attract and retain management and other skilled personnel for these businesses;
our ability to collect amounts owed to us from third parties;
our ability to develop successful and cost-effective marketing campaigns; and
our ability to timely adjust marketing expenditures in relation to changes in demand for the underlying products and
services offered by our Network Partners.
Our results of operations may suffer if we fail to successfully anticipate and manage these issues associated with new
products.
If we are unable to continually enhance our products and services and adapt them to technological changes and consumer
and lender, insurer and/or lead purchaser needs, we may lose market share and revenue and our business could suffer.
We need to anticipate, develop and introduce new products, services and applications on a timely and cost-effective basis
that keep pace with technological developments and changing consumer and customer needs. We are continually working to
improve our consumer experience through enhancements to our products and services. However, we may not be able to
develop products and services that are equivalent to or better than our competitors or that successfully meet our consumer
needs. We may not be successful, or as successful as our competitors, in developing technologies and systems that operate
effectively across multiple devices and platforms in a way that is appealing to our consumers.
Additionally, our interaction with our Network Partners is dependent on the technology and services we offer to these
customers. Our inability to offer competitive technology solutions to support our lenders could have a negative impact on our
business.
If we fail to develop our websites or apps to respond to technological developments and changing consumer and customer
needs cost effectively, or if consumers and customers respond negatively to changes, we may lose market share, which could
materially and adversely affect our business, financial condition and results of operations.
If consumers do not find value in our Spring platform or other platforms, or do not like the consumer experience on the
platforms, the number of matches on our platform may decline, which would harm our business, financial condition and
results of operations.
We believe that the growth of our business and revenue depends upon our ability to engage our existing users on the Spring
and other platforms and to add new users. If we lose users or user engagement diminishes, our business and financial condition
will be negatively impacted. If we fail to remain competitive on customer experience, editorial articles and product offerings,
our ability to grow our business may also be adversely affected.
Factors that could negatively affect our ability to grow our user base and engagement include, among others:
• we lose users to new market entrants and/or existing competitors;
• we do not obtain regulatory approvals necessary for expansion into new verticals, or to launch new products, product
features or tools;
• we fail to effectively use search engines, social media platforms, digital app stores, content-based online advertising,
and other online sources for generating traffic to our platform;
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• our platform experiences disruptions or outages;
• we suffer reputational harm to our brand including from negative publicity, whether accurate or inaccurate;
• we fail to offer new and competitive products, to provide effective updates to our existing products or to keep pace
with technological improvements in our industry;
• technical or other problems frustrate the user experience;
• we are unable to address user concerns regarding the content, privacy, and security of our digital platform;
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we are unable to continue to innovate and improve our platform by generating compelling content and tools; or
existing or new financial services providers use incentives to directly cross-sell their products, reducing consumer
benefits of using multiple providers.
Our inability to overcome these challenges could impair our ability to engage users on our platforms, and could harm our
business, operating results and financial condition.
We improve our products and services in ways that forego short-term gains.
We are constantly striving to improve the user experience for our consumers who use our websites and applications and for
our Network Partners. Some of our changes may have the effect of reducing our short-term revenue or profitability if we
believe that the benefits will ultimately improve our financial performance over the long-term. Any short-term reductions in
revenue or profitability could be more severe than we anticipate or these decisions may not produce the long-term benefits that
we expect, in which case our business and results of operations could be adversely affected.
We may be unable to make acquisitions, successfully integrate acquired companies into our business, or our acquisitions
may not meet our expectations, any of which would adversely affect our business, financial condition, and results of
operations.
We may in the future acquire or invest in businesses, offerings, technologies, or talent that we believe could complement or
expand our existing product offerings, enhance our technical capabilities, or otherwise offer growth opportunities. The pursuit
of future potential acquisitions may divert the attention of management and cause us to incur significant expenses related to
identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated. Even if we successfully
acquire additional businesses or technologies, we may not achieve the anticipated benefits or synergies due to a number of
factors, including but not limited to:
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senior management’s attention may be diverted from the management of daily operations to the integration of the
businesses acquired in the acquisition;
inability to generate sufficient revenue to offset acquisition costs;
inability to maintain relationships with customers and partners of the acquired business;
challenges maintaining quality and security standards consistent with our brand;
inability to achieve anticipated synergies or unanticipated difficulty with integration into our corporate culture;
the need to integrate or implement additional controls, procedures, and policies;
harm to our existing business relationships with business partners as a result of the acquisition;
use of substantial portions of our available cash or the incurrence of debt to consummate the acquisition;
inability to retain key employees of businesses acquired;
inability to fully integrate the businesses acquired;
costs and expenses associated with any undisclosed or potential liabilities;
that the businesses acquired in the acquisition may not perform as well as anticipated;
adverse conditions in the economy may affect the lenders or insurance carriers or other customers of the acquired
businesses and their willingness to issue new credit, write new policies or otherwise expand their businesses;
advertisers in the business verticals in which we, or the acquired businesses we operate, may be unwilling to advertise
on our websites or mobile applications;
increased competition and its effect on our or the acquired businesses' website traffic, click-through rates, submitted
consumer requests, advertising rates, revenue, margins, and market share;
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•
•
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our ability to maintain brand recognition for both us and the acquired businesses and to effectively leverage the
LendingTree brand with the newly acquired brands;
our ability to develop new products and services and enhance existing ones; and
assumed liabilities associated with the historical operations of the acquired businesses, including as a result of data
privacy and security laws and regulations or security breaches.
As a result of the foregoing, our acquisitions may not be accretive to us in the near term, or at all. Furthermore, if we fail to
realize the intended benefits of the business acquired in the acquisition, the market price of our common stock could decline to
the extent that the market price reflects an expectation of those benefits.
Other acquisitions or strategic investments that we pursue may not be successful and could disrupt our business and harm
our financial condition.
We may consider or undertake strategic acquisitions of, or material investments in, businesses, products or technologies,
such as our January 2022 acquisition of an equity interest in EarnUp or our February 2020 acquisition of an equity interest in
Stash. We may not be able to identify suitable acquisition or investment candidates, or even if we do identify suitable
candidates, they may be difficult to finance, expensive to fund and there is no guarantee that we can obtain any necessary
regulatory approvals or complete such transactions on terms that are favorable to us. To the extent we pay the purchase price of
any acquisition or investment in cash or through borrowings under our Credit Facility (as defined herein), it would reduce our
cash balances and/or result in indebtedness we must service, which may have a material and adverse effect on our business and
financial condition. If the purchase price is paid with our stock, it would be dilutive to our stockholders. In addition, we may
assume liabilities associated with a business acquisition or investment, including unrecorded liabilities that are not discovered at
the time of the transaction, and the repayment of those liabilities may have a material and adverse effect on our financial
condition. There may also be litigation or other claims arising in connection with an acquisition itself.
We may not be able to successfully integrate the personnel, operations, businesses, products or technologies of an
acquisition or investment. Integration may be particularly challenging if we enter into a line of business in which we have
limited experience and the business operates in a difficult legal, regulatory or competitive environment. We may find that we do
not have adequate operations or expertise to manage the new business. The integration of any acquisition or investment may
divert management's time and resources from our core business, which could impair our relationships with our current
employees, customers and strategic partners and disrupt our operations. Acquisitions and investments also may not perform to
our expectations for various reasons, including the loss of key personnel and/or customers. If we fail to integrate acquisitions or
investments or realize the expected benefits, we may lose the return on these acquisitions or investments or incur additional
transaction costs and our business and financial condition may be harmed as a result.
If we fail to manage our people through the changes caused by the economic challenges, our business and results of
operations could be harmed.
We have experienced a reduction in our headcount as a result of both elevated turnover caused by the market as well as
planned severances, which places substantial demand on remaining management and our operational infrastructure. As we
manage through this change, we must effectively transition work and train, develop and motivate a large number of both
existing and new employees, all while maintaining the beneficial aspects of our company culture. If we do not manage the
changing employee base effectively, the quality of our services and efficiency of our operations could suffer, which could harm
our business and results of operations.
We rely on the performance of highly skilled personnel and if we are unable to attract, retain, develop and motivate well-
qualified employees, our business and results of operations could be harmed.
We believe our success has depended, continues to depend and in the future will depend on the efforts and talents of our
management team and our highly skilled employees and workers, including our software engineers, analysts, marketing
professionals and sales staff. Our future success depends on our continuing ability to attract, develop, motivate and retain highly
qualified and skilled employees. The loss of any of our senior management or key employees could materially and adversely
affect our ability to build on the efforts that they have undertaken and to execute our business plan, and we may not be able to
find adequate replacements. Despite our current efforts, we cannot ensure that we will be able to retain the services of any
members of our senior management or other key employees. If we do not succeed in attracting well-qualified employees or
developing, retaining and motivating existing employees, our business and results of operations could be harmed.
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Network Partners on our marketplaces may not provide competitive levels of service to consumers, which could materially
and adversely affect our brands and businesses and their ability to attract consumers.
The ability of our businesses to provide consumers with a high-quality experience depends, in part, on consumers receiving
competitive levels of convenience, customer service, price and responsiveness from Network Partners participating on our
marketplaces with whom they are matched. If these providers do not provide consumers with competitive levels of
convenience, customer service, price and responsiveness, the value of our various brands may be harmed, the ability of our
businesses to attract consumers to our websites may be limited and the number of consumers matched through our marketplaces
may decline, which could have a material and adverse effect on our business, financial condition and results of operations.
A significant portion of our total revenue has, in the past, been derived from one Network Partner, and our results of
operations could be adversely affected if we lose significant business from this Network Partner.
Although for the years ended December 31, 2023, 2022 and 2021, no Network Partners accounted for more than 10% of
total consolidated revenue, in the past, a significant portion of our total revenue has been derived from one Network Partner.
This particular Network Partner remains a significant contributor to our total revenue. If this significant Network Partner were
to cease purchasing consumer requests and we were unable to replace the associated demand, the loss could have a material
adverse effect on our results of operations in the short term and potentially also the longer term. Also, if this Network Partner
reduces its volume of consumer requests for any reason, our business could be adversely affected.
We have incurred significant operating losses in the past and we may not be able to generate sufficient revenue to be
profitable over the long term.
We have incurred operating losses from continuing operations at times in our history and we have an accumulated deficit
of $837.7 million at December 31, 2023. If we fail to maintain or grow our revenue and manage our expenses, we may incur
significant losses in the future and not be able to maintain or increase our profitability.
Our Credit Facility contains financial covenants and other restrictions on our actions and it could therefore limit our
operational flexibility or otherwise adversely affect our financial condition. Failure to comply with the terms of any such
facility could impair our rights to the assets that have been pledged as collateral under the facility.
On September 15, 2021, we entered into a $200.0 million five-year senior secured revolving credit facility (the “Revolving
Facility”) and a $250.0 million seven-year senior secured delayed draw term loan facility (the “Term Loan Facility” and
together with the Revolving Facility, the “Credit Facility”). The Revolving Facility matures on September 15, 2026, and the
Term Loan Facility matures on September 15, 2028. On May 31, 2022, we borrowed $250.0 million under the Term Loan
Facility. Borrowings under the Credit Facility can be used to finance working capital needs, capital expenditures, and general
corporate purposes, including to finance permitted acquisitions. As of December 31, 2023, we have outstanding a $0.2 million
letter of credit under the Revolving Facility. As of December 31, 2023, we have $246.9 million borrowings outstanding under
the Term Loan Facility.
The Credit Facility contains a restrictive financial covenant, which limits the amount of first lien consolidated debt to an
EBITDA ratio subject to a step up following a material acquisition. In addition, the Credit Facility contains customary
affirmative and negative covenants, including, subject to certain exceptions, restrictions on our ability to, among other things:
•
•
incur additional indebtedness;
grant liens;
• make loans and investments;
•
enter into mergers or make certain fundamental changes;
• make certain restricted payments, including dividends, distributions, stock repurchases or redemptions;
•
•
•
sell assets;
enter into transactions with affiliates; and
enter into restrictive transactions.
The Credit Facility requires us to pledge as collateral, subject to certain customary exclusions, substantially all of our
assets. The obligations under this facility are unconditionally guaranteed, subject to certain customary exclusions, on a senior
basis by our material domestic subsidiaries. The guaranties are secured, subject to certain customary exclusions, by
substantially all of each such guarantor's assets.
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If an event of default occurs or if we otherwise fail to comply with any of the negative or affirmative covenants of the
Credit Facility, the lenders may declare all of the obligations and indebtedness under such facility due and payable. In such a
scenario, the lenders could exercise their lien on the pledged collateral, which would have a material adverse effect on our
business, operations, financial condition and liquidity. For additional information on the Credit Facility, see Note 15—Debt, in
the notes to the consolidated financial statements included elsewhere in this annual report.
Risks Related to our Industry
We participate in a highly competitive market and pressure from existing and new competitors may materially and adversely
affect our business, results of operations and financial condition. If any of our competitors are more successful than we are
at attracting and retaining customers or Network Partners, our business, financial condition and results of operations could
be materially and adversely affected.
We currently compete with a number of other online marketing companies and we expect that competition will intensify.
We also face the possibility of new competitors. Some of these existing competitors may have more capital or complementary
products or services than we do and they may leverage their greater capital or diversification in a manner that adversely affects
our competitive position, including by making strategic acquisitions, such as acquiring other competitors, new products, or our
advertising partners. In addition, new competitors may enter the market and may be able to innovate and bring products and
services to market faster, or anticipate and meet consumer or Network Partner demand before we do. Other newcomers,
including major search engines and content aggregators, may be able to leverage their existing products and services or access
to data to our disadvantage. We may be forced to expend significant resources to remain competitive with current and potential
competitors. If any of our competitors are more successful than we are at attracting and retaining customers or Network
Partners, our business, financial condition and results of operations could be materially and adversely affected.
Risks Related to our Operations
Our success depends, in part, on the integrity of our systems and infrastructures. System interruption and the lack of
integration and redundancy in these systems and infrastructures may have a material and adverse impact on our business,
financial condition and results of operations.
Our success depends, in part, on our ability to maintain the integrity of our systems and infrastructures, including websites,
information and related systems, call centers and distribution and fulfillment facilities. System interruption and the lack of
integration and redundancy in our information systems and infrastructures may materially and adversely affect our ability to
operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.
We may experience occasional system interruptions that make some or all systems or data unavailable or prevent our businesses
from efficiently providing services or fulfilling orders. We also rely on affiliate and third-party computer systems, broadband
and other communications systems and service providers in connection with the provision of services generally, as well as to
facilitate, process and fulfill transactions. Any interruptions, outages or delays in our systems and infrastructures, our
businesses, our affiliates and/or third parties, or deterioration in the performance of these systems and infrastructures, could
impair the ability of our businesses to provide services, fulfill orders and/or process transactions. Fire, flood, power loss,
telecommunications failure, hurricanes, tornadoes, earthquakes, acts of war or terrorism, acts of God, unauthorized intrusions or
computer viruses, and similar events or disruptions may damage or interrupt computer, broadband or other communications
systems and infrastructures at any time. Any of these events could cause system interruption, delays and loss of critical data,
and could prevent our businesses from providing services, fulfilling orders and/or processing transactions. While our businesses
have backup systems and other resiliency measures in place for certain aspects of their operations, these systems are not fully
redundant and disaster recovery planning is not sufficient for all eventualities. In addition, we may not have adequate insurance
coverage to compensate for losses from a major interruption. If any of these events were to occur, it could materially and
adversely affect our business, financial condition and results of operations.
We are continuously developing, updating, and rewriting critical platforms that support our business. The risks associated
with this work include, but are not limited to, operational implementation, downtimes, and diversion of management and
technical resources. If the work is more challenging or time consuming than expected, then our business, financial condition
and results of operations could be materially and adversely affected.
Breaches or failures of our systems or website security, the theft, unauthorized access, acquisition, use, disclosure,
modification or misappropriation of personal information, the occurrence of fraudulent activity, or other data security-
related incidents may have a material and adverse impact on our business, financial condition and results of operations.
In the processing of consumer transactions, our businesses collect, use, store, disclose, transfer, and otherwise process a
large volume of personal information and other confidential, proprietary and sensitive data. Breaches or failures of security
involving our systems or website or those of any of our affiliates, Network Partners or external service providers have occurred
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in the past and may occur in the future, and have in the past resulted in, and could in the future result in, the theft, unauthorized
access, acquisition, use, disclosure, modification or misappropriation of personal information of our consumers, employees or
third parties with whom we conduct business, or other confidential, proprietary and sensitive data, fraudulent activity, or system
disruptions or shutdowns. The occurrence of any actual or attempted breach, failure of security or fraudulent activity, the
reporting of such an incident, whether accurate or not, or our failure to make adequate or timely disclosures to the public or law
enforcement agencies following any such event, whether due to delayed discovery or a failure to follow existing protocols,
could result in claims made against us or our affiliates, Network Partners or external service providers. Such claims could result
in state and/or federal litigation and related financial liabilities, as well as criminal penalties or civil liabilities, regulatory
actions from state and/or federal governmental authorities, and significant fines, orders, sanctions, litigation and claims against
us by consumers or third parties and related indemnification obligations. Actual or perceived security breaches or failures also
have in the past caused, and may in the future cause, financial losses, increased costs, interruptions in the operations of our
business, misappropriation of assets, significant damage to our brand and reputation with consumers and third parties with
whom we do business and result in adverse publicity, loss of consumer confidence, distraction to our management, and reduced
sales and profits, any or all of which could have a material and adverse impact on our business, financial condition and results
of operations.
Such breaches, failures and fraudulent activity may take many forms, including check fraud, fraudulent inducement,
electronic fraud, wire fraud, computer viruses, phishing, social engineering, denial or degradation of service attacks, malware,
ransomware or other cyber-attacks, and other dishonest acts, any of which could be the result of a circumvention or failure of
our data security processes, procedures, tools, and controls. Our systems are also subject to compromise from internal threats,
such as theft, misuse, unauthorized access or other improper actions by employees, external service providers and other third
parties with otherwise legitimate access to our systems and website. Data security-related incidents and fraudulent activity are
increasing in frequency and evolving in nature. We rely on a framework of security, processes, procedures, tools, and controls
designed to protect our information and assets but, given the unpredictability of the timing, nature and scope of data security-
related incidents and fraudulent activity, there can be no assurance that any security procedures and controls that we or our
external service providers have implemented will be sufficient to prevent data security-related incidents or other fraudulent
activity from occurring. Furthermore, because the methods of attack and deception change frequently, are increasingly complex
and sophisticated, and can originate from a wide variety of sources, including third parties such as external service providers
and even nation-state actors, despite our reasonable efforts to ensure the integrity of our systems and website, it is possible that
we may not be able to anticipate, detect, appropriately react and respond to, or implement effective preventative measures
against, all security breaches and failures and fraudulent activity. As a result, our business, financial condition or results of
operations could be materially and adversely affected.
We also face risks associated with security breaches affecting third parties and their suppliers or partners (fourth parties)
with whom we are affiliated or otherwise conduct business. Due to applicable laws and regulations or contractual obligations,
we may be held responsible for any breach, failure or fraudulent activity attributed to our affiliates, Network Partners or
external service providers as they relate to the information we share with them. In addition, because we do not control our
Network Partners or external service providers and our ability to monitor their data security is limited, we cannot ensure the
security measures they take will be sufficient to protect our information. We may be required to expend significant capital and
other resources to protect against, respond to, and recover from any potential, attempted, or existing security breaches or
failures and their consequences. As data security-related threats continue to evolve, we may be required to expend significant
additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information
security vulnerabilities. In addition, our remediation efforts may not be successful. The inability to implement, maintain and
upgrade adequate safeguards could have a material and adverse impact on our business, financial condition and results of
operations. Moreover, there could be public announcements regarding any data security-related incidents and any steps we take
to respond to or remediate such incidents. If securities analysts or investors perceive these announcements to be negative, it
could, among other things, have a substantial adverse effect on the price of our common stock. Consumers are generally
concerned with security and privacy of the internet and any publicized security problems affecting our businesses or those of
third parties with whom we are affiliated or otherwise conduct business may discourage consumers from doing business with
us, which could have a material and adverse effect on our business, financial condition and results of operations.
While we currently maintain cybersecurity insurance, such insurance may not be sufficient in type or amount to cover us
against claims related to breaches, failures or other data security-related incidents, and we cannot be certain that cyber insurance
will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to
any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or
the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-
insurance requirements, could have a material and adverse effect on our business, financial condition and results of operations.
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Risks Related to Legal, Compliance and Regulation
Failure to comply with past, existing or new laws, rules and regulations, or to obtain and maintain required licenses, could
materially and adversely affect our business, financial condition and results of operations.
We market and provide services in heavily regulated industries through a number of different channels across the United
States. As a result, our businesses have been and remain subject to a variety of laws, rules, regulations, statutes, standards,
policies and procedures in various jurisdictions in the United States and abroad, which are subject to change at any time. The
failure of our businesses to comply with past, existing or new laws, rules and regulations, or to obtain and maintain required
licenses, could result in administrative fines or proceedings against us or our businesses by governmental agencies and/or
litigation by consumers, which could materially and adversely affect our business, financial condition and results of operations
and our brand.
Our businesses conduct marketing activities via telephone, mail and/or through online marketing channels, and these
general marketing activities are governed by numerous federal regulations, such as the TSR, the CAN-SPAM Act, the TCPA,
the Federal Trade Commission Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, RESPA, and various
state telemarketing laws, federal and state data privacy and security laws and their accompanying regulations and guidelines,
among others. Additionally, increased regulation by the Bureau of Consumer Financial Protection (“CFPB”), the U.S. Federal
Trade Commission (“FTC”) and Federal Communications Commission (“FCC”) has resulted in restrictions on our marketing
activities.
Additional federal, state and in some instances, local laws regulate secured and unsecured lending, and insurance brokerage
activities, which impacts our marketplace, partners and consumers. These laws generally regulate the manner in which lending
and lending-related activities, as well as insurance brokerage activities, are marketed or made available, including advertising
and other consumer disclosures, payments for services and record keeping requirements. These laws include RESPA, the Fair
Credit Reporting Act, the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Housing Act and various state laws.
State laws often restrict the amount (and nature) of interest and fees that may be charged by a lender or mortgage broker, or
otherwise regulate the manner in which lenders or mortgage brokers operate or advertise.
State and federal lending laws and regulations generally require accurate disclosure of the critical components of credit
costs so that consumers can readily compare credit terms from various lenders. These laws and regulations also impose certain
restrictions on the marketing and advertisement of these credit terms. Because we are an aggregator of rate and other
information regarding many financial products, including mortgages, loans, deposits and credit cards, we may be subject to
some of these laws and regulations and we may be held liable under these laws and regulations for information provided
through our online services.
Our businesses are also subject to various state, federal and/or local laws, rules and regulations limiting or prohibiting
inducements, cash rebates and gifts to consumers, which impacts our lead generation business, as well as the manner in which
these businesses may offer, advertise or promote transactions. For example, RESPA generally prohibits the payment or receipt
of referral fees and fee shares or splits in connection with residential mortgage loan transactions, subject to certain exceptions.
Pursuant to the Dodd-Frank Act, the CFPB administers and enforces RESPA, and from time to time issues guidance related to
various RESPA compliance topics (see, e.g. CFPB Advisory Opinion “Real Estate Settlement Procedures Act (Regulation X);
Digital Mortgage Comparison-Shopping Platforms and Related Payments to Operators” (February 7, 2023)). Some state
authorities have also asserted enforcement rights.
The applicability of referral fee and fee sharing prohibitions to lenders and real estate providers, including online networks,
may have the effect of reducing the types and amounts of fees that may be charged or paid in connection with real estate-
secured loan offerings or activities, including mortgage brokerage, lending and real estate brokerage services, or otherwise
limiting our and our Network Partners' ability to conduct marketing and referral activities. RESPA and related regulations do,
however, contain a number of provisions that allow for payments between unaffiliated entities, including market-based fees for
the provision of non-referral goods, services or facilities and advertising arrangements. In addition, RESPA allows for referrals
to affiliated entities, including joint ventures, when specific requirements have been met. We rely on these provisions in
conducting our business activities.
Violations of RESPA or similar state statutes can lead to claims of substantial damages, which may include (but are not
limited to) fines, treble damages and attorneys' fees, government enforcement actions, civil and criminal liability, or other
remedies. We diligently monitor and assess new regulatory guidance, enforcement actions and court interpretations of RESPA
as part of our ongoing compliance management program and devote substantial resources and management attention to
regulatory compliance in light of such developments.
Various federal, state and, in some instances, local, laws also prohibit unfair, deceptive and abusive marketing and sales
practices. We have adopted appropriate policies and procedures to address these requirements (such as appropriate consumer
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disclosures and call scripting, call monitoring and other quality assurance and compliance measures), but it is not possible to
ensure that all employees comply with our policies and procedures at all times.
Regulatory authorities and private plaintiffs may allege that we failed to comply with applicable laws, rules and regulations
where we believe we have complied. These allegations may relate to past conduct and/or past business operations. Even
allegations that our activities have not complied or do not comply with all applicable laws and regulations may have a material
and adverse effect on our business, financial condition and results of operations. The alleged violation of such laws, rules or
regulations may entitle an individual plaintiff to seek monetary damages, or may entitle an enforcing government agency to
seek significant civil or criminal penalties, costs and attorneys' fees. Regardless of its merit, an allegation typically requires
legal fee expenditures to defend against. We have in the past, and may in the future, decide to settle allegations of non-
compliance with laws, rules and regulations when we determine that the cost of settlement is less than the cost and risk of
continuing to defend against an allegation. Settlements may require us to pay monetary fines and may require us to adopt new
procedures and practices, which may render it more difficult to operate or may raise our internal costs. The future occurrence of
one or more of these events could have a material and adverse effect on our business, financial condition and results of
operations.
Compliance with these laws, rules and regulations is a significant component of our internal costs and new laws, rules and
regulations are frequently proposed and adopted, requiring us to adopt new procedures and practices. Changes to existing laws,
rules and regulations or changes to interpretation of existing laws, rules and regulations could result in further restriction of
activities incidental to our business and could have a material and adverse effect on our business, results of operation and
financial condition. Failure to comply with applicable laws and regulatory requirements may result in, among other things,
revocation of or inability to renew required licenses or registrations, loss of approval status, termination of contracts without
compensation, administrative enforcement actions and fines, private lawsuits, including those styled as class actions, cease and
desist orders and civil and criminal liability.
Our collection, use, storage, disclosure, transfer and other processing of personal information could give rise to significant
costs and liabilities, including as a result of governmental regulation, conflicting legal requirements or differing views of
personal privacy rights, which may have a material and adverse impact on our business, financial condition and results of
operations.
In the course of our operations and the processing of consumer transactions, our businesses collect, use, store, disclose,
transfer and otherwise process a large volume of personal information, including from our consumers, employees and third
parties with whom we conduct business, and other user data. The collection, use, storage, disclosure, transfer and other
processing of personal information is increasingly subject to a wide array of federal and state laws and regulations regarding
data privacy and security, including the GLBA, that are intended to protect the privacy of personal information that is collected,
used, stored, disclosed, transferred and otherwise processed in or from the governing jurisdiction. Some countries also are
considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could
increase the cost and complexity of delivering our products and services. As we seek to expand our business, we are, and may
increasingly become, subject to various laws, regulations and standards, as well as contractual obligations, relating to data use,
privacy and security in the jurisdictions in which we operate. In many cases, these laws and regulations apply not only to third-
party transactions, but also to transfers of information between or among us, our affiliates and other parties with whom we
conduct business. These laws, regulations and standards may be interpreted and applied differently over time and from
jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may have a material and
adverse impact on our business, financial condition and results of operations. The regulatory framework for data privacy and
security worldwide is continuously evolving and developing and, as a result, interpretation and implementation standards and
enforcement practices are likely to remain uncertain for the foreseeable future.
In the United States, various federal and state regulators, including governmental agencies, like the CFPB and FTC, have
adopted, or are considering adopting, laws and regulations concerning personal information and data privacy and security. This
patchwork of legislation and regulation may give rise to conflicts or differing views of personal privacy rights. For example,
certain state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to personal
information than federal, international or other state laws, and such laws may differ from each other, all of which may
complicate compliance efforts. At the federal level, we are subject to the GLBA, which restricts certain collection, storage, use,
disclosure and other processing by covered companies of certain personal information, requires notice to individuals of privacy
practices and provides individuals with certain rights to prevent the use and disclosure of certain non-public or otherwise legally
protected personal information. The GLBA also imposes requirements regarding the safeguarding and proper destruction of
personal information through the issuance of data security standards or guidelines. In addition, many states in which we operate
have laws that protect the privacy and security of personal information. For example, the California Consumer Privacy Act (the
“CCPA”), as amended by the California Privacy Rights Act ("CPRA"), requires covered companies to, among other things,
provide certain disclosures to California residents and provide such residents with certain data protection and privacy rights,
including the ability to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as
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well as a private right of action for certain data breaches that result in the loss of certain personal information. This private right
of action may increase the likelihood of, and risks associated with, data breach litigation. The CCPA and the CPRA contain
several exemptions, including a provision to the effect that the CCPA and CPRA do not apply where the personal information is
collected, processed, sold or disclosed pursuant to the GLBA. It is possible that further amendments to the CCPA and the
CPRA will be enacted, but even in their current forms it remains unclear how various provisions of the CCPA and CPRA will
be interpreted and enforced. Numerous other states also have enacted or are in the process of enacting state-level data privacy
and security laws and regulations and there is discussion in Congress of a new federal data protection and privacy law to which
we may become subject if it is enacted. All of these evolving compliance and operational requirements impose significant costs
that are likely to increase over time, may require us to modify our data processing practices and policies, divert resources from
other initiatives and projects, and could restrict the way products and services involving data are offered, all of which may have
a material and adverse impact on our business, financial condition and results of operations.
Many regulatory and statutory requirements, both in the United States and abroad, include obligations for companies to
notify individuals of data breaches involving certain personal information, which have in the past resulted from, and may in the
future result from, breaches experienced by us or our external service providers. For example, laws in all 50 U.S. states require
businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach. These
laws are not consistent and compliance in the event of a widespread data breach is difficult and costly. Moreover, states have
been frequently amending existing laws, requiring attention to changing regulatory requirements. We also may be contractually
required to notify consumers or other third parties of a security breach. Although we may have contractual protections with our
external service providers, actual or perceived security breaches have in the past resulted in, and may in the future result in,
harm to our reputation and brand, exposure to potential liability or a need to expend significant resources on data security and in
responding to any such actual or perceived breach. Any contractual protections we may have from our external service
providers may not be sufficient to adequately protect us from any such liabilities and losses, and we may be unable to enforce
any such contractual protections.
In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-
regulatory standards from time to time. These and other industry standards may legally or contractually apply to us, or we may
elect to comply with such standards. We expect that there will continue to be new proposed laws and regulations concerning
data privacy and security and we cannot yet determine the impact such future laws, regulations and standards may have on our
business. New laws, amendments to or re-interpretations of existing laws, regulations, standards and other obligations may
require us to incur additional costs and restrict our business operations. Because the interpretation and application of laws,
regulations, standards and other obligations relating to data privacy and security are still uncertain, it is possible that these laws,
regulations, standards and other obligations may be interpreted and applied in a manner that is inconsistent with our data
processing practices and policies or the features of our products and services. If so, in addition to the possibility of fines,
lawsuits, regulatory investigations, public censure, other claims and penalties, and significant costs for remediation and damage
to our reputation, we could be materially and adversely affected if legislation or regulations are expanded to require changes in
our data processing practices and policies or if governing jurisdictions interpret or implement their legislation or regulations in
ways that negatively impact our business, financial condition and results of operations. We may be unable to make such
changes and modifications in a commercially reasonable manner, or at all. Any inability to adequately address data privacy or
security-related concerns, even if unfounded, or to comply with applicable laws, regulations, standards and other obligations
relating to data privacy and security, could result in additional cost and liability to us, harm our reputation and brand, damage
our relationships with consumers and have a material and adverse impact on our business, financial condition and results of
operations.
We make public statements about our use and disclosure of personal information through our privacy policies, information
provided on our website and press statements. Although we endeavor to comply with our public statements and documentation,
we may at times fail to do so or be alleged to have failed to do so. The publication of our privacy policies and other statements
that provide promises and assurances about data privacy and security can subject us to potential government or legal action if
they are found to be deceptive, unfair or misrepresentative of our actual practices. Moreover, from time to time, concerns may
be expressed about whether our products and services compromise the privacy of consumers and others. Any concerns about
our data privacy and security practices, even if unfounded, could damage the reputation of our businesses, discourage potential
users from our products and services and have a material and adverse impact on our business, financial condition and results of
operations.
Any failure or perceived failure by us or our Network Partners or external service providers to comply with our posted
privacy policies or with any applicable federal, state or foreign laws, regulations, standards, certifications or orders relating to
data privacy or security or consumer protection, or any compromise of security that results in the theft, unauthorized access,
acquisition, use, disclosure, or misappropriation of personal information or other user data, could result in fines or proceedings
or litigation by governmental agencies or consumers, including class action privacy litigation in certain jurisdictions, which
would subject us to significant awards, penalties or judgments, one or all of which could materially and adversely affect our
business, financial condition and results of operations. In addition, if our practices are not consistent, or viewed as not
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consistent, with legal and regulatory requirements, including changes in laws, regulations and standards or new interpretations
or applications of existing laws, regulations and standards, we may also become subject to audits, inquiries, whistleblower
complaints, adverse media coverage, investigations, or severe criminal or civil sanctions, all of which may affect our financial
condition, operating results and our reputation.
Failure to obtain proper business licenses or other documentation or to otherwise comply with local laws and requirements
regarding marketing, sales or services, may result in civil or criminal penalties and restrictions on our ability to conduct
business in that jurisdiction.
Most states require licenses to solicit, broker or make loans secured by residential mortgages and other consumer loans to
residents of those states, as well as to operate real estate referral and brokerage services, and in many cases require the licensure
or registration of individual employees engaged in aspects of these businesses. Further, as mandated by the federal Secure and
Fair Enforcement of Mortgage Licensing Act of 2008 (the “SAFE Act”), states adopted certain minimum standards for the
licensing of individuals involved in mortgage lending or loan brokering. States also require licenses to undertake certain
insurance brokerage activities. Compliance with these requirements may render it more difficult for us and our Network
Partners to operate or may raise our internal costs or the costs of our Network Partners, which may be passed on to us through
less favorable commercial arrangements. While our businesses have endeavored to comply with applicable requirements, the
application of these requirements to our business and to persons operating online is not always clear. Moreover, any of the
licenses or rights currently held by our businesses or our employees may be revoked prior to, or may not be renewed upon, their
expiration. In addition, our businesses or our employees may not be granted new licenses or rights for which they may be
required to apply from time to time in the future.
Regulations promulgated by some states may also impose compliance obligations on directors, executive officers, and any
person who acquires a certain percentage (for example, 10% or more) of the equity in a licensed entity, including requiring such
persons to periodically file financial and other personal and business information with state regulators. If any such person
refuses or fails to comply with these requirements, we may be unable to obtain certain licenses and existing licensing
arrangements may be jeopardized. The inability to obtain, or the loss of, required licenses could have a material and adverse
effect on our business, financial condition and results of operations.
Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax
returns could adversely affect our operating results and financial condition.
The impact of the changes in tax legislation on future years may be material to our consolidated financial statements.
Similarly, changes in tax laws and regulations that impact our Network Partners or the economy generally may also impact our
financial condition and results of operations. In addition, tax laws and regulations are complex and subject to varying
interpretations and any significant failure to comply with applicable tax laws and regulations in all relevant jurisdictions could
give rise to substantial penalties and liabilities. Any changes in enacted tax laws, rules or regulatory or judicial interpretations
(including any attempt to tax online services such as those offered by us); any adverse outcome in connection with tax audits in
any jurisdiction; or any change in the pronouncements relating to accounting for income taxes could materially and adversely
impact our effective tax rate, tax payments, financial condition and results of operations.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
As of December 31, 2023, we had pre-tax consolidated federal net operating losses (“NOLs”) of $139.0 million. The
federal NOLs no longer expire under the Tax Cuts and Jobs Act (“TCJA”). Our NOLs will be available to offset taxable income
subject to the limitations found in Internal Revenue Code Sections 382 and 383. In addition, we have state NOLs of
approximately $466.4 million at December 31, 2023, some of which will expire at various times between 2024 and 2043. The
state NOLs could expire before we are able to utilize them. If we experience one or more ownership changes in the future as a
result of future transactions in our stock, our ability to utilize NOLs could be limited. Our ability to use our federal NOLs was
limited on an annual basis by the TCJA. This limitation was deferred for tax years 2019 and 2020 by the 2020 Coronavirus Aid,
Relief, and Economic Security (“CARES”) Act. Our ability to use certain of our state NOLs was limited on an annual basis in
various jurisdictions by legislative updates specific to the individual jurisdictions.
We may become subject to intellectual property disputes, which are costly and may subject us to significant liability and
increased costs of doing business.
From time to time, in the ordinary course of business we are subjected to actual and threatened legal proceedings, claims
and counterclaims, including allegations relating to infringement of the patents, trademarks, copyrights and other intellectual
property and similar proprietary rights, and misappropriation of trade secrets, of third parties. Our success depends, in part, on
our ability to develop and commercialize our products and services without infringing, misappropriating or otherwise violating
the intellectual property rights of third parties. However, we may not be aware or we may disagree that our products or services
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are infringing, misappropriating or otherwise violating third-party intellectual property rights and such third parties may bring
claims alleging such infringement, misappropriation or violation. Lawsuits are often time-consuming and expensive to resolve
and they may divert management’s time and attention. Patent litigation tends to be particularly protracted and expensive. Our
technologies may not be able to withstand any third-party claims against their use.
In addition, many companies may have the capability to dedicate substantially greater resources to enforce their intellectual
property rights and to defend claims that may be brought against them. If a third party is able to obtain an injunction preventing
us from accessing third-party intellectual property rights, or if we cannot license or develop alternative technology for any
infringing aspect of our business, we may be forced to limit or stop sales of our products and services or cease business
activities related to such intellectual property. Our insurance may not cover potential claims of this type or may not be adequate
to indemnify us for all liability that may be imposed. We cannot predict the outcome of lawsuits and cannot ensure that the
results of any such actions will not have an adverse impact on our business, financial condition or results of operations.
Uncertainties resulting from the initiation and continuation of intellectual property-related litigation or proceedings could
adversely affect our ability to compete in the marketplace. Any intellectual property litigation to which we might become a
party, or for which we are required to provide indemnification, may require us to do one or more of the following:
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cease selling or using products or services that incorporate the intellectual property rights that we allegedly infringe,
misappropriate or violate;
• make substantial payments for legal fees, settlement payments or other costs or damages;
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obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or
redesign or rebrand the allegedly infringing products or services to avoid infringement, misappropriation or violation,
which could be costly, time-consuming or impossible.
Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management
and technical resources, any of which could materially and adversely impact our business, financial condition and results of
operations. In addition, during the course of litigation there could be public announcements of the results of hearings, motions
or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could
have a substantial adverse effect on the price of our common stock or other adverse consequences.
We may fail to adequately obtain, maintain, enforce and protect our intellectual property and similar proprietary rights or
may be accused of infringing, misappropriating or otherwise violating intellectual property or similar proprietary rights of
third parties.
We regard our intellectual property rights, including our patents, trademarks, service marks, copyrights, domain names,
trade secrets and similar intellectual property and proprietary rights (as applicable) as critical to our success. Our businesses
also rely heavily upon software, informational databases and other components that make up their products and services.
We rely on a combination of laws, confidentiality procedures and contractual restrictions with employees, consumers,
suppliers, affiliates and others to establish and protect our intellectual property and similar proprietary rights. However, the
steps we take to obtain, maintain, enforce and protect our intellectual property and similar proprietary rights may be inadequate.
We may not be able to protect our intellectual property and similar proprietary rights if we are unable to enforce our rights or if
we do not detect unauthorized use of our intellectual property or similar proprietary rights. If we fail to protect our intellectual
property and similar proprietary rights adequately, third parties, including our competitors, may gain access to our intellectual
property and proprietary technology and develop and commercialize substantially identical products, services or technologies,
which would harm our business, financial condition and results of operations. Despite the precautions we have in place, it may
be possible for a third party to copy or otherwise obtain and use our intellectual property, including our trade secrets, without
authorization. In addition, third parties may independently and lawfully develop substantially similar intellectual property.
In some cases, litigation or other actions may be necessary to protect or enforce our intellectual property and similar
proprietary rights or to determine the validity and scope of intellectual or proprietary rights claimed by others. Defending,
protecting and enforcing our intellectual property and similar proprietary rights might entail significant expense or be time-
consuming or distracting to management. Further, our efforts to enforce our intellectual property rights may be met with
defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such
defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights. Furthermore, because
of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of
our confidential or sensitive information could be compromised by disclosure in the event of litigation.
We have generally registered and continue to apply to register, or secure by contract when appropriate, our principal
trademarks and service marks as they are developed and used, and reserve and register domain names when and where we deem
appropriate. We generally consider the protection of our trademarks to be important for purposes of brand maintenance and
reputation. While we strive to protect our trademarks, service marks and domain names, effective trademark protection may not
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be available and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of
a domain name may be available or be registered, even if available. Our failure to protect our intellectual property rights in a
meaningful manner or challenges to related contractual rights could result in erosion of our brand names and reputation and
limit our ability to control marketing on or through the Internet using our various domain names or otherwise, which could
materially and adversely impact our business, financial condition and results of operations. The value of our intellectual
property could diminish if others assert rights in or ownership of our trademarks and other intellectual property rights, or
trademarks that are similar to our trademarks. We may be unable to successfully resolve these types of conflicts to our
satisfaction.
We have been granted one U.S. patent and from time to time we may have patent applications pending with the USPTO
and various foreign patent authorities for various proprietary technologies and other inventions. The status of any patent
involves complex legal and factual questions and the breadth of claims allowed is uncertain. Accordingly, any patent
application filed may not result in a patent being issued, or existing or future patents may not be adjudicated valid by a court or
be afforded adequate protection against competitors with similar technology. Even if we continue to seek patent protection in
the future, we may be unable to obtain or maintain patent protection for our technology. In addition, any patents issued from
pending or future patent applications or licensed to us in the future may not provide us with competitive advantages, or may be
successfully challenged by third parties. Likewise, the issuance of a patent to us does not mean that our processes or inventions
will be found not to infringe upon patents or other intellectual property rights of third parties. There may be issued patents of
which we are not aware, held by third parties that, if found to be valid and enforceable, could be alleged to be infringed by our
current or future processes or inventions. There also may be pending patent applications of which we are not aware that may
result in issued patents, which could be alleged to be infringed by our current or future processes or inventions. Moreover, third
parties may create new products or methods that achieve similar results without infringing upon patents that we own.
Any patents, trademarks or other intellectual property rights that we have or may obtain may be challenged or
circumvented by others or invalidated or held unenforceable through administrative process, including re-examination, inter
partes review, interference and derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g., opposition
proceedings) or litigation. Furthermore, legal standards relating to the validity, enforceability, and scope of protection of
intellectual property rights are often uncertain. Patent, trademark, copyright, and trade secret protection may not be available to
us. In addition, the laws of some foreign countries may not be as protective of intellectual property rights as those in the United
States, and mechanisms for enforcement of intellectual property rights may be inadequate. As we expand our activities, our
exposure to unauthorized copying and use of our intellectual property and similar proprietary rights will likely increase.
Moreover, policing unauthorized use of our intellectual property and similar proprietary rights may be difficult, expensive, and
time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those
in the United States and where mechanisms for enforcement of intellectual property rights may be weak. Accordingly, despite
our efforts, we may be unable to prevent third parties from infringing, misappropriating or otherwise violating our intellectual
property or similar proprietary rights.
We cannot ensure that all persons and entities contributing to our intellectual property have validly assigned to us all
applicable intellectual property rights they may have or that we will be able to enforce our rights under any such agreements.
Moreover, we cannot guarantee that we have entered into confidentiality agreements with each party that has or may have had
access to our confidential or proprietary information, know-how and trade secrets, or that any such confidentiality agreements
will be effective in controlling access to, and distribution, use, misuse, misappropriation, reverse engineering or disclosure of,
our confidential or proprietary information, know-how and trade secrets. These agreements may be breached and we may not
have adequate remedies for any such breach.
In the ordinary course of business, we are party to litigation involving contract, intellectual property and a variety of other
claims, which could adversely affect our business and financial condition.
We are involved in various legal proceedings and claims which have involved and may in the future involve taxes,
contract, alleged infringement of third-party intellectual property rights, consumer protection, securities laws, and other claims,
including, but not limited to, the legal proceedings described in Part I, Item 3, Legal Proceedings. These matters could involve
claims for substantial amounts of money or for other relief that might necessitate changes to our business or operations. The
defense of these actions has been, and will likely continue to be, both time consuming and expensive, and the outcomes of these
actions cannot be predicted with certainty. Determining reserves for pending litigation is a complex, fact-intensive process that
requires significant legal judgment. It is possible that unfavorable outcomes in one or more such proceedings could result in
substantial payments that could adversely affect our business, consolidated financial position, results of operations, or cash
flows in a particular period.
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Our reputation, ability to do business and consolidated financial statements may be harmed by improper conduct by our
business partners.
Our business partners (or businesses we acquire or partner with) may violate U.S. and/or non-U.S. laws, including the laws
governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices,
conflicts of interest, competition, employment practices and workplace behavior, export and import compliance, money
laundering and data privacy and security. Our business partners typically act as independent contractors and not as agents in
their solicitations and transactions with consumers, and we cannot ensure that these entities will comply with applicable laws
and regulations at all times. Failure on the part of a lender, insurer, website operator or other third party to comply with
applicable laws or regulations could result in, among other things, claims of liability against us, claims of vicarious liability or a
negative impact on our reputation and business.
If our Network Partners fail to produce required documents for examination by, or other affiliated parties fail to make
certain filings with, state regulators, we may be subject to fines, forfeitures and the revocation of required licenses.
Some of the states in which our businesses maintain licenses require us to collect various loan documents from our
Network Partners and produce these documents for examination by state regulators. While our Network Partners are
contractually obligated to provide these documents upon request, these measures may be insufficient. Failure to produce
required documents for examination could result in fines, as well as the revocation of our licenses to operate in certain states,
which could have a material and adverse effect on our business, financial condition and results of operations.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to
produce timely and accurate consolidated financial statements or comply with applicable regulations could be impaired.
In the event that our chief executive officer, chief financial officer, or independent registered public accounting firm
determines in the future that our internal control over financial reporting is not effective as defined under Section 404 of the
Sarbanes-Oxley Act, we could be subject to one or more investigations or enforcement actions by state or federal regulatory
agencies, stockholder lawsuits or other adverse actions requiring us to incur defense costs, pay fines, settlements or judgments,
thereby causing investor perceptions to be adversely affected and potentially resulting in restatement of our consolidated
financial statements for prior periods and a decline in the market price of our stock.
In addition, our current internal controls and any new controls we implement may become inadequate because of changes
in conditions in our business or information technology systems or changes in the applicable laws, regulations and standards.
We may, in the future, acquire or invest in companies that were not subject to the Sarbanes-Oxley regulations prior to
acquisition and accordingly were not required to establish and maintain an internal control infrastructure meeting the standards
promulgated under the Sarbanes-Oxley Act. Any failure to design or operate effective controls, any difficulties encountered in
their implementation or improvement, or any failure to implement adequate internal controls for certain investments or our
acquired companies could harm our operating results or cause us to fail to meet our reporting obligations. Not correctly
designing controls nor fully recognizing, understanding or testing the state of, or changes in, our internal control environment
could also adversely affect the results of management evaluations and independent registered public accounting firm audits of
our internal control over financial reporting, about which we are required to include in our periodic reports filed with the SEC.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose
confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our
common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the
Nasdaq stock market in the future.
We may be exposed to liabilities under the Foreign Corrupt Practices Act (“FCPA”), which could have a material adverse
effect on our business.
Our operations in India may subject us to compliance with various laws and regulations, including the FCPA and similar
anti-bribery and anti-corruption laws, which generally prohibit companies and their intermediaries from engaging in bribery or
making other improper payments to private or public parties for the purpose of obtaining or retaining business or gaining an
unfair business advantage. The FCPA also requires proper record keeping and characterization of such payments in our reports
filed with the SEC. Violations of these laws could result in severe criminal or civil sanctions and financial penalties and other
consequences that may have a material adverse effect on our business, reputation, financial condition or results of operations.
Changes in the regulation of the Internet, mobile carriers and their partners could negatively affect our business.
Our business is dependent on the continued growth and maintenance of the Internet’s infrastructure, as well as our ability
to market products through channels such as e-mail and voice and text messaging. There can be no assurance that the Internet’s
infrastructure will continue to be able to support the demands placed on it by sustained growth in the number of users and
amount of traffic. To the extent that the Internet’s infrastructure is unable to support the demands placed on it, our business may
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be impacted. We may also be disadvantaged by the adverse effect of any delays or cancellations of private sector or government
initiatives designed to expand broadband access. The reduction in the growth of, or a decline in, broadband and Internet access
poses a risk to us.
In addition, federal, state and international government bodies and agencies have in the past adopted, and may in the future
adopt, laws and regulations affecting the use of the Internet as a commercial medium. Changes in these laws or regulations
could adversely affect the demand for our products and services or require us to modify our products and services in order to
comply with these changes. Laws, rules and regulations governing advertising and e-commerce through Internet
communications and mobile carriers and their partners are dynamic and the extent of future government regulation is uncertain.
Federal and state regulations govern various aspects of our online business, including intellectual property ownership,
infringement and misappropriation, including with respect to trade secrets, the distribution of electronic communications,
marketing and advertising, data privacy and security, search engines and Internet tracking technologies. Future taxation on the
use of the Internet or e-commerce transactions could also be imposed. Existing or future regulation or taxation could hinder
growth in or negatively impact the use of the Internet generally, including the viability of Internet e-commerce, which could
reduce our revenue, increase our operating expenses and expose us to significant liabilities.
The possibility of additional future regulations, changing rule interpretations and examinations by regulatory agencies may
result in more stringent compliance standards and could adversely affect the results of our operations.
In response to conditions in the U.S. financial markets and economy, as well as a heightened regulatory and Congressional
focus on consumer and small business lending and consumer investing, regulators have increased their scrutiny of the financial
services industry, the result of which has included new regulations and guidance. We are unable to predict the long-term impact
of this enhanced scrutiny. We are also unable to predict whether any additional or similar changes to statutes or regulations,
including the interpretation or implementation thereof, will occur in the future. Likewise, states or municipalities may adopt
statutes or regulations making it unattractive, impracticable or infeasible for our businesses to continue to conduct business in
such jurisdictions. The impact of additional future regulations and/or withdrawal from any jurisdiction due to emerging legal
requirements could materially and adversely affect our business, financial condition and results of operations.
Risks Related to an Investment in our Common Stock
Fluctuations in our operating results, quarter-to-quarter earnings and other factors may result in significant decreases in
the price of our common stock.
The market price for our common stock has been volatile. From when we became a publicly-traded company to as of
December 31, 2023, the price per share of our common stock has fluctuated from an intraday low of $1.42 per share to an
intraday high of $434.94 per share. The market price of our common stock may fluctuate or decline significantly in the future.
Some of the factors that could negatively affect the price of our common stock or result in fluctuations in the price or trading
volume of our common stock include:
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our ability to attract new customers and retain existing customers;
the timing and success of introductions of new products and services;
rapid technological change, frequent new product introductions and evolving industry standards;
variations in our quarterly operating and financial results or our projected operating and financial results;
failure to meet analysts' earnings estimates;
publication of research reports about us, our Network Partners or our industry;
additions or departures of key management personnel;
adverse market reaction to any indebtedness we may incur or preferred or common stock we may issue in the future;
actions by stockholders, including “activist” investors;
changes in market valuations of other companies in our industry, including our Network Partners and competitors;
announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint
ventures or capital commitments;
increased competition from one or more large, well-established technology companies;
systems, data center, website and internet failures, breaches and service interruptions;
speculation in the press or investment community, including the short selling of our common stock;
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changes or proposed changes in laws or regulations affecting our industry or enforcement of these laws and
regulations, or announcements relating to these matters;
threatened or actual ligation;
loss of key employees; and
changes in general economic or market conditions.
The stock market is subject to frequent price and volume fluctuations. These market fluctuations could result in extreme
volatility in the trading price of our common stock, which could cause a decline in the value of your investment in our common
shares. In addition, the trading price of our common stock could decline for reasons unrelated to our business or financial
results, including in reaction to events that affect other companies in our industry even if those events do not directly affect us.
You should also be aware that price volatility may be greater if the public float and trading volume of our common stock are
low. These factors may result in short-term or long-term negative pressure on the value of our common stock.
If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and trading
volume could decline.
The trading market for internet marketplace operators and lead-generation companies depends, in part, on the research and
reports that securities or industry analysts publish about the industry and specific companies. If one or more analysts covering
us currently or in the future fail to publish reports on us regularly, demand for our common stock could decline, which could
cause our stock price and trading volume to decline. If one or more recognized securities or industry analysts that cover our
Company or our industry in the future downgrades our common stock or publishes inaccurate or unfavorable research about our
business or industry, our stock price would likely decline.
One holder of our common stock owns a substantial portion of our outstanding common stock, which concentrates voting
control and limits your ability to influence corporate matters.
As of February 28, 2024, Douglas Lebda, our Chairman and Chief Executive Officer, beneficially owned approximately
21% of our outstanding common stock. Additionally, Mr. Lebda holds options to purchase up to 426,392 shares of our common
stock that are not included in beneficial ownership because Mr. Lebda does not have the right to acquire them within 60 days of
February 28, 2024. If these options were exercisable, they would represent additional beneficial ownership of approximately
2% of our outstanding common stock.
Therefore, for the foreseeable future, Mr. Lebda will have influence over our management and affairs and all matters
requiring stockholder approval, including the election or removal (with or without cause) of directors and approval of any
significant corporate transaction, such as a merger or other sale of us or our assets. The interests of Mr. Lebda may not
necessarily align with the interests of our other stockholders. Mr. Lebda could elect to sell a significant interest in us and you
may receive less than the then-current fair market value or the price you paid for your shares as a result of such transaction.
This concentrated control could delay, defer or prevent a change of control, merger, consolidation, takeover or other business
combination involving us that other stockholders may otherwise support. This concentrated control could also discourage a
potential investor from acquiring our common stock and might harm the market price of our common stock.
Future sales of common stock by our existing stockholders may cause our stock price to fall.
The market price of our common stock could decline as a result of sales by our existing stockholders in the market, or the
perception that these sales could occur. These sales might also make it more difficult for us to sell equity securities at a time and
price that we deem appropriate.
We may issue additional shares of our common stock in the future pursuant to current or future equity incentive plans, or in
connection with current or future acquisitions or financings. If we were to raise capital in the future by selling shares of our
common stock, or securities that are convertible into our common stock or issuing shares of our common stock in a business
acquisition, their issuance would have a dilutive effect on the percentage ownership of our stockholders and, depending on the
prices at which such shares or convertible securities are sold or issued, on their investment in our common stock and, therefore,
could have a material adverse effect on the market prices of our common stock.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult,
limit attempts by stockholders to replace or remove our management and affect the market price of our common stock.
Provisions in our certificate of incorporation and bylaws, as amended and restated (“bylaws”), may have the effect of
delaying or preventing a change of control or changes in our management. Our amended and restated certificate of
incorporation and/or bylaws include provisions that:
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authorize our board of directors to issue, without further action by our stockholders, up to 5,000,000 shares of
undesignated preferred stock, sometimes referred to as “blank check preferred”;
prohibit cumulative voting in the election of directors;
provide that vacancies on our board of directors may be filled only by the affirmative vote of a majority of directors
then in office or by the sole remaining director;
provide that only our board of directors may change the size of our board of directors;
specify that special meetings of our stockholders may be called only by or at the direction of our board of directors or
by a person specifically designated with such authority by the board; and
prohibit stockholders from taking action by written consent.
The provisions described above may frustrate or prevent any attempts by our stockholders to replace or remove our current
management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for
appointing our management. These provisions may also have the effect of delaying or preventing a change of control of our
company, even if stockholders support such a change of control.
Our bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for
substantially all disputes between the Company and its stockholders, which could limit stockholders’ ability to obtain a
favorable judicial forum for disputes with our Company or our directors, officers or employees.
Our bylaws provide that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the
State of Delaware is the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of us, (ii) any
action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of our Company to us or
our stockholders, (iii) any action asserting a claim against us or our directors, officers or employees arising pursuant to any
provision of the DGCL or our certificate of incorporation or bylaws, or (iv) any action asserting a claim against us or our
directors, officers or employees governed by the internal affairs doctrine, except as to each of (i) through (iv) above, for any
claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the
Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten
days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of
Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds
favorable for disputes with us or our directors, officers or other employees and may result in increased costs to our
stockholders, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a
court were to find our choice of forum provisions contained in our bylaws to be inapplicable or unenforceable in an action, we
may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of
operations, and financial condition.
We do not intend to pay any cash dividends on our common stock in the foreseeable future.
We have not declared or paid a cash dividend on our common stock in over ten years. We have no current intention to
declare or pay cash dividends on our common stock in the foreseeable future. In addition, the Credit Facility contains certain
restrictions on our ability to pay dividends. See Note 15—Debt, in the notes to the consolidated financial statements included
elsewhere in this annual report. The declaration, payment and amount of future cash dividends, if any, will be at the discretion
of our board of directors. As a result, capital appreciation, if any, of our common stock will be the sole source of gain for the
foreseeable future for holders of our common stock.
Our financial results fluctuate as a result of seasonality, which may make it difficult to predict our future performance and
may adversely affect our common stock price.
Several of our products are subject to seasonal trends. Products in our Home segment have seasonal trends that reflect the
general patterns of the mortgage industry and housing sales, which typically peak in the spring and summer seasons and decline
in the winter. Our quarterly operating results may fluctuate as a result of these seasonal trends. In certain historical periods,
broader cyclical trends in interest rates, as well as the mortgage and real estate markets, have upset the customary seasonal
trends. Our Consumer and Insurance segments also have certain products with various seasonality trends which may create
further uncertainty in our quarterly operating results. See Item 1. Business—Seasonality included elsewhere in this annual
report for more information. Any of these seasonal trends, or the combination of them, may negatively impact the price of our
common stock.
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The conditional conversion feature of our outstanding convertible senior notes, if triggered, may adversely affect our
financial condition and operating results.
If the conditional conversion feature of our 0.50% Convertible Senior Notes due July 15, 2025 (the “Notes”) is triggered,
holders of Notes will be entitled to convert the Notes at any time during specified periods at their option. Convertibility for each
quarter will be determined based on whether the last reported sales price of our common stock, for at least 20 trading days
(whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of
the immediately preceding calendar quarter, is greater than or equal to 130% of the conversion price under the Notes on each
applicable trading day. If so, then the Notes will be convertible during that calendar quarter. The Notes will also be convertible
at any time during the five business day period immediately following any five consecutive trading day period in which the
trading price per $1,000 principal amount of Notes for each trading Day of such five trading day period is less than 98% of the
product of the last reported sale price of our common stock on each such trading day and the conversion ratio under the Notes,
as more fully described in the respective indentures governing the Notes, which are incorporated by reference as an exhibit to
this annual report.
If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely
shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a
portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition,
even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a
portion of the outstanding principal of the respective Notes as a current rather than long-term liability, which would result in a
material reduction of our net working capital.
We may not have the ability to raise the funds necessary to settle conversions of the Notes in cash or to repurchase the Notes
upon a fundamental change and our future debt may contain limitations on our ability to pay cash upon conversion or
repurchase of the Notes.
Holders of the Notes will have the right to require us to repurchase all or a portion of their Notes upon the occurrence of a
fundamental change at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued
and unpaid special interest, if any. We may not have enough available cash or be able to obtain financing at the time we are
required to make repurchases of Notes surrendered therefore, or pay cash with respect to Notes being converted if we elect not
to issue shares, which could harm our reputation and affect the trading price of our common stock.
We may not have the ability to pay off the Notes with our current cash and future cash flow, combined with our borrowing
capacity under our current Credit Facility, or raise the funds necessary to pay off the Notes upon their maturity in July
2025.
Our Notes mature on July 15, 2025, unless earlier repurchased, redeemed or converted. As of December 31, 2023, $284
million of the Notes were outstanding. We may not have enough available cash or availability under our Credit Facility or be
able to obtain financing at the time the Notes mature, which could harm our reputation and affect the trading price of our
common stock. Additional funding may not be available to us on acceptable terms or at all. Our ability to obtain additional
debt will depend on a number of factors, including market conditions, interest rates, our operating performance, our credit
rating and lender or investor interest.
If we elect to settle the Notes in shares, then existing stockholders could experience substantial dilution.
Our hedge and warrant transactions may affect the value of the Notes and our common stock.
In connection with the pricing of the Notes, we entered into convertible note hedge transactions with certain counterparties.
The hedge transactions are generally expected to reduce the potential dilution upon conversion of the Notes and/or offset any
cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be. We also
entered into warrant transactions with such counterparties. However, the warrant transactions could separately have a dilutive
effect to the extent that the market price per share of our common stock exceeds the applicable strike price of the warrants. The
initial strike price of the warrants is $709.52 for the warrants associated with the Notes.
In connection with establishing their initial hedge of the hedge and warrant transactions, the counterparties or their
respective affiliates may have purchased shares of our common stock and/or entered into various derivative transactions with
respect to our common stock concurrently with or shortly after the pricing of the Notes. In addition, the counterparties or their
respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our
common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior
to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of Notes or following
any repurchase of Notes by us on any fundamental repurchase date or otherwise). This activity could cause or avoid an increase
or a decrease in the market price of our common stock or the Notes.
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We may need additional equity, debt or other financing in the future, which we may not be able to obtain on acceptable
terms, or at all, and any additional financing may result in restrictions on our operations or substantial dilution to our
stockholders.
We may need to raise funds in the future, for example, to develop new technologies, expand our business, respond to
competitive pressures and make acquisitions. We may try to raise additional funds through public or private financings,
strategic relationships or other arrangements. Although our existing Credit Facility limits our ability to incur additional
indebtedness, these restrictions are subject to a number of qualifications and exceptions and may be amended with the consent
of our lenders. Accordingly, under certain circumstances, we may incur substantial additional debt.
Our ability to obtain debt or equity funding will depend on a number of factors, including market conditions, interest rates,
our operating performance, our credit rating and investor interest. Additional funding may not be available to us on acceptable
terms or at all. If adequate funds are not available, we may be required to reduce expenditures, including curtailing our growth
strategies, foregoing acquisitions or reducing our business development efforts. If we succeed in raising additional funds
through the issuance of equity or equity-linked securities, then existing stockholders could experience substantial dilution. If we
raise additional funds through the issuance of debt securities or preferred stock, these new securities would have rights,
preferences and privileges senior to those of the holders of our common stock. In addition, any such issuance could subject us
to restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it
more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Further,
to the extent we incur additional indebtedness or such other obligations, the risks associated with our existing debt, including
our possible inability to service our existing debt, would increase.
We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term
stockholder value.
Although in each of February 2018 and February 2019, our board of directors authorized us to repurchase of up to $100.0
million and $150.0 million shares of our common stock, respectively, we cannot guarantee that the stock repurchase program
will be fully consummated or that it will enhance long-term stockholder value. Our ability to repurchase stock is limited by our
Credit Facility. The program could affect the trading price of our stock and increase volatility, and any announcement of a
termination or change of this program may result in a decrease in the trading price of our stock. In addition, any purchases made
under this program may diminish our cash reserves. There were no repurchases during the year ended December 31, 2023.
During the years ended December 31, 2022 and 2021, we purchased 379,895 and 334,253 shares of our common stock,
respectively, for $43.0 million and $40.0 million, respectively. At December 31, 2023, $96.7 million remains authorized for
share repurchase.
General Risk Factors
If our goodwill or indefinite-lived intangible assets become impaired, we may be required to record a significant charge to
earnings.
Under accounting principles generally accepted in the United States of America (“GAAP”), we review the carrying value
of goodwill and indefinite-lived intangible assets on an annual basis as of October 1, or more frequently if an event occurs or
circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Factors
that may be considered a change in circumstances, indicating that the carrying value of our goodwill or indefinite-lived
intangible assets may not be recoverable, include a decline in stock price and market capitalization, reduced future cash flow
estimates and slower growth rates in our industry or our customers’ industries. We may be required to record a significant
charge in our consolidated financial statements during a period in which any impairment of our goodwill or indefinite-lived
intangible assets is determined, negatively impacting our results of operations.
If the fair value of our equity investments decrease, we will be required to record a significant charge to earnings.
Our equity investments do not have readily determinable fair values and, upon acquisition, we elected the measurement
alternative to value these securities. These equity securities are carried at cost less impairment, if any, and subsequently
measured to fair value upon observable price changes in an orderly transaction for the identical or similar investments with any
gains or losses recorded in operating income in the consolidated statement of operations. If there is an observable price change
that indicates a decrease in the fair value of our equity investments, we will be required to record a significant charge in our
consolidated financial statements, negatively impacting our results of operations.
Charges to earnings resulting from acquisitions may adversely affect our operating results.
Under GAAP, when we acquire businesses, we allocate the purchase price to tangible assets and liabilities and identifiable
intangible assets acquired at their acquisition date fair values. Any residual purchase price is recorded as goodwill. We also
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estimate the fair value of any contingent consideration. Our estimates of fair value are based upon assumptions believed to be
reasonable but which are uncertain and involve significant judgments by management. After we complete an acquisition, the
following factors could result in material charges and adversely affect our operating results and may adversely affect our cash
flows:
•
•
•
•
•
•
•
•
•
costs incurred to combine the operations of companies we acquire, such as transitional employee expenses and
employee retention or relocation expenses;
impairment of goodwill or intangible assets;
a reduction in the useful lives of intangible assets acquired;
impairment of long-lived assets;
identification of, or changes to, assumed contingent liabilities;
changes in the fair value of any contingent consideration;
charges to our operating results due to duplicative pre-merger activities;
charges to our operating results from expenses incurred to effect the acquisition; and
charges to our operating results due to the expensing of certain stock awards assumed in an acquisition.
Substantially all of these potential charges would be accounted for as expenses that would decrease our net income and
earnings per share for the periods in which those costs are incurred. Charges to our operating results in any given period could
differ substantially from other periods based on the timing and size of our acquisitions and the extent of acquisition accounting
adjustments.
For acquisitions with potential future contingent consideration payments, we assign a fair value to the contingent
consideration and reassess this fair value quarterly. Increases or decreases based on the actual performance of the acquired
company against the contingent consideration targets or other factors will cause decreases or increases, respectively, in our
results of operations. These quarterly adjustments could have a material adverse effect on our results of operations. During
2021, we incurred $8.2 million of contingent consideration income due to the change in estimated fair value of the earnout
payments.
ITEM 1B. Unresolved Staff Comments
Not applicable.
ITEM 1C. Cybersecurity
Governance Related to Cybersecurity Risks
Cybersecurity risk oversight is a top priority for management and our board of directors. Management is responsible for
the day-to-day management of cybersecurity risks we face, while our board of directors, as a whole and through committees, is
responsible for the oversight of risk management.
Our Chief Information Security Officer (“CISO”) is responsible for the assessment and management of cybersecurity
risk. The individual currently serving as our CISO has over twenty-five years of experience in cybersecurity, information
security, and risk management within the financial services industry. The CISO reports to our Chief Executive Officer (“CEO”)
and provides updates to him on a regular basis of any cybersecurity matters.
Our board of directors oversees the management of our risks from cybersecurity threats. The board of directors has
delegated the responsibility for the oversight of our cybersecurity risks program to the Audit Committee. The CISO provides
cybersecurity updates to our Audit Committee as needed but at least on a quarterly basis covering cybersecurity matters,
including a security scorecard, updates on policies, significant incidents or new developments in our cybersecurity risk profile.
Our incident response process contemplates that management will notify the audit committee of a material cybersecurity
incident.
Cybersecurity Risk Management
Cybersecurity is critical to our ongoing business as a provider of online marketplaces where consumers shop for
financial services. Securing our business information, intellectual property, consumer, customer and employee data and
technology systems is essential for the continuity of our business, meeting applicable regulatory requirements and maintaining
the trust of our stakeholders.
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To help protect the Company from a major cybersecurity incident that could have a material impact on operations or
our financial results, we have implemented policies, procedures, programs and controls, including technology investments that
focus on cybersecurity incident prevention, identification and mitigation. The steps we take to reduce our vulnerability to
cyberattacks and to mitigate impacts from cybersecurity incidents include but are not limited to: establishing information
security policies and standards, implementing information protection processes and technologies, monitoring our information
technology systems for cybersecurity threats, assessing cybersecurity risk profiles of key third-parties, engaging third party
experts and implementing cybersecurity training for our employees. Our cybersecurity risk management program leverages the
National Institute of Standards and Technology (“NIST”) framework, which organizes cybersecurity risks into five categories:
identify, protect, detect, respond and recover. We regularly assess the threat landscape and take a holistic view of cybersecurity
risks, with a layered cybersecurity strategy based on prevention, detection and mitigation.
We regularly test defenses by performing simulations and drills at both a technical level (including through penetration
tests) and by reviewing our operational policies and procedures. At the management level, our IT security team regularly
monitors alerts and meets to discuss threat levels, trends and remediation. The team also prepares a monthly cyber scorecard,
regularly collects data on cybersecurity threats and risk areas and conducts an annual cybersecurity risk assessment. Further, we
conduct periodic external penetration tests to assess our processes and procedures and the threat landscape. These tests and
assessments are useful tools for maintaining a cybersecurity program to protect our investors, consumers, customers,
employees, vendors, and intellectual property.
Additionally, we follow a cybersecurity incident response process that provides a framework for responding to
cybersecurity incidents. The process identifies applicable requirements for incident disclosure and reporting and also provides
protocols for incident evaluation, including the use of third-party service providers and partners, processes for notification and
internal escalation of information to our senior management, the Board and the audit committee. It also addresses requirements
for our external reporting obligations. The cybersecurity incident response process is reviewed and updated, as necessary, under
the leadership of the Company’s Chief Information Security Officer (“CISO”) and General Counsel (“GC”).
We face a number of cybersecurity risks in connection with our business. Although we did not experience a material
cybersecurity incident during the year ended December 31, 2023, the scope and impact of any future incident cannot be
predicted. Notwithstanding the approach we take to cybersecurity, we may not be successful in preventing or mitigating a
cybersecurity incident that could have a material adverse effect on our business, results of operations, or financial condition.
See “Item 1A. Risk Factors” for more information on our cybersecurity-related risks.
ITEM 2. Properties
Our principal executive offices are located on approximately 161,000 square feet of office space in Charlotte, North
Carolina under a lease that expires in 2036.
Primarily as a result of our acquisitions in recent years, we also operate offices in: Charleston, South Carolina; Denver,
Colorado; Seattle, Washington; Beachwood, Ohio; Ahmedabad, India; and Hyderabad, India.
Our Charlotte operations support all three of our segments: Home, Consumer and Insurance. The Consumer segment has
personnel in the Charleston, Ahmedabad and Hyderabad offices. The Insurance segment has personnel in the Denver,
Beachwood, and Seattle offices.
ITEM 3. Legal Proceedings
In the ordinary course of business, we are party to litigation involving property, contract, intellectual property and a variety
of other claims. The amounts that may be recovered in such matters may be subject to insurance coverage. See Note 17—
Contingencies and Note 21—Discontinued Operations in the notes to the consolidated financial statements included elsewhere
in this report for a discussion of our current and recently settled litigation.
ITEM 4. Mine Safety Disclosures
Not applicable.
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PART II
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
General Market Information, Holders and Dividends
Our common stock has been listed on the Nasdaq Global Select Market under the ticker symbol “TREE” since August
2008.
As of February 23, 2024, there were approximately 482 holders of record of our common stock. The actual number of
holders of our common stock is greater than this number of record holders and includes stockholders who are beneficial owners,
but whose shares are held in street name by brokers or held by other nominees.
We have no current intention to declare or pay cash dividends on our common stock in the foreseeable future. The
declaration, payment and amount of future cash dividends, if any, will be at the discretion of our board of directors.
Performance Graph
The performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by
reference into any filings under the Securities Act or the Exchange Act, except as otherwise expressly set forth by specific
reference in such filing.
Set forth below is a line graph, for the period from December 31, 2018 through December 31, 2023, comparing the
cumulative total stockholder return of $100 invested (assuming that all dividends were reinvested) in (1) our common stock, (2)
the cumulative return of all companies listed on the Nasdaq Composite Index and (3) the cumulative total return of the Research
Development Group (“RDG”) Internet index. Returns over the indicated periods should not be considered indicative of future
stock prices or stockholder returns.
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Recent Sales of Unregistered Securities
During the year ended December 31, 2023, we did not issue or sell any shares of our common stock or other equity
securities in transactions that were not registered under the Securities Act.
Issuer Purchases of Equity Securities
In each of February 2018 and February 2019, the board of directors authorized, and we announced, a stock repurchase
program that allowed for the repurchase of up to $100.0 million and $150.0 million, respectively, of our common stock. Under
this program, we can repurchase stock in the open market or through privately-negotiated transactions. We have used available
cash to finance these repurchases. We will determine the timing and amount of any additional repurchases based on our
evaluation of market conditions, applicable SEC guidelines and regulations, and other factors. This program may be suspended
or discontinued at any time at the discretion of our board of directors. During the quarter ended December 31, 2023, no shares
of common stock were repurchased under the stock repurchase program. As of December 31, 2023 and February 23, 2024,
approximately $96.7 million is authorized for future share repurchases.
Additionally, the LendingTree 2023 Stock Plan and LendingTree 2023 Inducement Grant Plan, approved by our
stockholders on June 21, 2023, allows employees to forfeit shares of our common stock to satisfy federal and state withholding
obligations upon the exercise of stock options, the settlement of restricted stock unit awards and the vesting of restricted stock
awards granted to those individuals under the plans. During the quarter ended December 31, 2023, 4,725 shares were
purchased related to these obligations under the LendingTree 2023 Stock Plan. The withholding of those shares does not affect
the dollar amount or number of shares that may be purchased under the stock repurchase program described above.
The following table provides information about the Company's purchases of equity securities during the quarter ended
December 31, 2023.
Period
Total Number of
Shares Purchased (1)
Average Price
Paid per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (2)
Approximate
Dollar Value of Shares
that May Yet be
Purchased Under the
Plans or Programs
(in thousands)
10/1/23 - 10/31/23
11/1/23 - 11/30/23
12/1/23 - 12/31/23
Total
303 $
1,772 $
2,650 $
4,725 $
13.74
15.78
19.79
17.90
— $
— $
— $
— $
96,655
96,655
96,655
96,655
(1) During October 2023, November 2023, and December 2023, 303 shares, 1,772 shares, and 2,650 shares, respectively
(totaling 4,725 shares), were purchased to satisfy federal and state withholding obligations of our employees upon the
settlement of restricted stock units and restricted stock awards, all in accordance with our 2023 Stock Plan and 2023
Inducement Grant Plan, as described above.
(2) See the narrative disclosure above the table for further description of our publicly announced stock repurchase
program.
ITEM 6. [Reserved]
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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in
conjunction with our consolidated financial statements and accompanying notes included elsewhere within this report. This
discussion includes both historical information and forward-looking information that involves risks, uncertainties and
assumptions. Our actual results may differ materially from management's expectations as a result of various factors, including
but not limited to those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-
Looking Information.”
Company Overview
LendingTree, Inc. is the parent of LT Intermediate Company, LLC, which holds all of the outstanding ownership interests
of LendingTree, LLC, and LendingTree, LLC owns several companies.
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, student 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. We seek to match consumers with multiple providers, who can offer
them competing quotes for the product(s) they are seeking. 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 (previously MyLendingTree) 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. By expanding our portfolio of financial services offerings, we are growing and
diversifying our business and sources of revenue. We intend to capitalize on our expertise in performance marketing, product
development and technology by leveraging the widespread recognition of the LendingTree brand.
We believe the consumer and small business financial services industry is in the middle stages of a fundamental shift to
online product offerings, similar to the shift that started in retail and travel many years ago and is now well established. We
believe that, like retail and travel, as consumers continue to move towards online shopping and transactions for financial
services, suppliers will increasingly shift their product offerings and advertising budgets toward the online channel. We believe
the strength of our brands and of our Network Partners place us in a strong position to continue to benefit from this market shift.
Economic Conditions
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 2022, the challenging interest rate environment and persistent inflationary pressures presented challenges for many
of our mortgage lending and insurance partners. We saw the most significant impact in our Home segment as mortgage rates
nearly doubled in 2022, causing a sharp decline in refinance volumes and pressure on purchase activity. Although our
Insurance segment rebounded from the trough in the fourth quarter of 2021, the recovery was slower than expected as demand
from our carrier partners remained volatile as they continued to attempt to implement premium increases to offset the effect of
inflation on claims. In addition, the auto and home insurance industry was impacted in 2022 by persistent industry headwinds,
supply chain issues, rising accident severity and frequency, and hurricane losses.
During 2023, the challenging interest rate environment and inflationary pressures have continued to present challenges for
many of our mortgage lending 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%. The continued high mortgage rates in
2023 and home affordability issues continued to cause declines in refinance volumes and purchase activity. In our Insurance
segment, demand from our carrier partners remained volatile for much of the year as they continued to deal with persistent
industry headwinds. In the last months of 2023, we began to see advertising budgets from our carrier partners increase and we
are optimistic about the prospect for continued increases into 2024.
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Segment Reporting
We have three reportable segments: Home, Consumer, and Insurance.
Recent Mortgage Interest Rate Trends
Interest rate and market risks are substantial in the mortgage lead generation business. Short-term fluctuations in mortgage
interest rates primarily affect consumer demand for mortgage refinancings, while long-term fluctuations in mortgage interest
rates, coupled with the U.S. real estate market, affect consumer demand for new mortgages. 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. At the same time,
lender demand for leads from third-party sources typically decreases as there are more consumers in the marketplace seeking
refinancing and, accordingly, lenders receive more organic mortgage lead volume. Due to lower lender demand, our revenue
earned per consumer typically decreases, but with correspondingly lower selling and marketing costs.
Conversely, when interest rates increase, we typically see decreased consumer demand for mortgage refinancing, leading to
decreased traffic to our website and higher associated selling and marketing efforts associated with that traffic. At the same
time, lender demand for leads from third-party sources typically increases, as there are fewer consumers in the marketplace and,
accordingly, the supply of organic mortgage lead volume decreases. Due to high lender demand, we typically see an increase in
the amount lenders will pay per matched lead, which often leads to higher revenue earned per consumer. However, increases in
the amount lenders will pay per matched lead in this situation is limited by the overall cost models of our lenders, and our
revenue earned per consumer can be adversely affected by the overall reduced demand for refinancing in a rising rate
environment.
We dynamically adjust selling and marketing expenditures in all interest rate environments to optimize our results against
these variables.
According to Freddie Mac, 30-year mortgage interest rates steadily increased during 2021, from a monthly average of
2.74% in January 2021, ending at a monthly average of 3.10% in December 2021. During 2022, 30-year mortgage interest rates
increased significantly 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.
On a full-year basis, 30-year mortgage interest rates increased to an average 6.80% in 2023, compared to 5.33% and 2.96%
in 2022 and 2021, respectively.
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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 30% in 2022
from 59% of total 2021 mortgage origination dollars from refinance due to the increase in average mortgage rates. Total
refinance original dollars decreased further to 19% of total mortgage origination dollars in 2023 due to the increase in average
mortgage interest rates. Total refinance origination dollars decreased by 74% in 2022 over 2021 and 54% in 2023 over 2022.
Industry-wide mortgage origination dollars decreased by 49% in 2022 over 2021 and 29% in 2023 over 2022.
Looking forward, the MBA is projecting 30-year mortgage interest rates to decrease in 2024 to an average of 6.1%.
According to MBA projections, the mix of mortgage origination dollars is expected to remain primarily with purchase
mortgages with the refinance share representing just 24% for 2024.
The U.S. Real Estate Market
The health of the U.S. real estate market and interest rate levels are the primary drivers of consumer demand for new
mortgages. Consumer demand, in turn, affects lender demand for purchase mortgage leads from third-party sources. Typically,
a strong real estate market will lead to reduced lender demand for leads, as there are more consumers in the marketplace
seeking financing and, accordingly, lenders receive more organic lead volume. 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 2021, existing home sales grew by 9% over 2020, fueled by increased competition for
low inventory as well as an increase in first-time home buyers. In 2022, existing home sales decreased by 17% as compared to
2021 due to increased interest rates and limited inventory of homes. This trend continued into 2023 with existing home sales
decreasing 19% over 2022. Fannie Mae expects a 4% increase in existing home sales in 2024 compared to 2023.
LendingTree Spring (previously MyLendingTree)
We consider certain metrics related to Spring set forth below to help us evaluate our business and growth trends and assess
operational efficiencies. The calculation of the metrics discussed below may differ from other similarly titled metrics used by
other companies, securities analysts or investors.
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We continued to grow our user base and added 3.4 million new users in 2023, bringing cumulative sign-ups to 28.2 million
as of December 31, 2023.
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.
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, all of which are
included in interest income/expense, net in the consolidated statement of operations and comprehensive income.
For more information, see Note 15—Debt, in the notes to the consolidated financial statements included elsewhere in this
report.
Cost Reductions and Simplification of Business
On March 24, 2023, we committed to a workforce reduction plan (the “Reduction Plan”), to reduce operating costs, which
included the elimination of approximately 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. 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. We anticipate the Reduction Plan will reduce 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.
During September 2023, we completed workforce reductions of 14 employees. We incurred $0.9 million in severance
charges 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.
Separately, we made the decision to close our Ovation credit services business, an asset group within our Consumer
segment, by mid- 2023. As a result, the Company recorded an asset impairment charge of $4.2 million in 2023 related to the
write-off of certain long-term assets. 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. 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. The business is capital-
intensive, requires elevated overhead, and future prospects were becoming uncertain.
The Ovation business accounted for approximately 3% of total revenue and 3% of total costs and expenses, with an
immaterial impact to net income on the consolidated statement of operations and comprehensive income (loss) for the year
ended December 31, 2022.
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Results of Operations for the Years ended December 31, 2023 and 2022
For information on fiscal 2021 results and similar comparisons, see Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations—Results of Operations for the Years ended December 31, 2022 and 2021 of our Form 10-
K for the fiscal year ended December 31, 2022.
Home
Consumer
Insurance
Other
Revenue
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization
shown separately below)
Selling and marketing expense
General and administrative expense
Product development
Depreciation
Amortization of intangibles
Goodwill impairment
Restructuring and severance
Litigation settlements and contingencies
Total costs and expenses
Operating loss
Other (expense) income, net:
Interest income (expense), net
Other (expense) income
Loss before income taxes
Income tax benefit (expense)
Net loss and comprehensive loss
Revenue
Year Ended December 31,
2023 vs. 2022
2023
$
Change
2022
(Dollars in thousands)
%
Change
$
143,753 $
289,383 $
(145,630)
278,945
249,605
199
672,502
38,758
433,588
117,700
47,197
19,070
7,694
38,600
10,118
396,109
299,073
427
984,992
57,769
702,238
152,383
55,553
20,095
25,306
—
4,428
(117,164)
(49,468)
(228)
(312,490)
(19,011)
(268,650)
(34,683)
(8,356)
(1,025)
(17,612)
38,600
5,690
388
713,113
(40,611)
(18)
1,017,754
(32,762)
406
(304,641)
(7,849)
21,685
(105,993)
(124,919)
(26,014)
3,843
(54,933)
47,699
(109,836)
(69,986)
2,515
(122,404) $
(133,019)
(187,952) $
135,534
65,548
$
(50) %
(30) %
(17) %
(53) %
(32) %
(33) %
(38) %
(23) %
(15) %
(5) %
(70) %
— %
129 %
2,256 %
(30) %
(24) %
183 %
(2,858) %
(127) %
102 %
35 %
Revenue decreased in 2023 compared to 2022 due to decreases in our Home, Consumer and Insurance segments.
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 $117.2 million
in 2023 from 2022, or 30%, primarily due to decreases in our personal loans, credit cards, small business loans products and
other credit products. Several of our other products in the Consumer segment experienced decreases in revenue in 2023 from
2022.
Revenue from our personal loans product decreased $44.0 million, or 31%, to $100.1 million in 2023 from $144.1 million
in 2022 primarily due to a decrease in the number of consumers completing request forms and in revenue earned per consumer.
Revenue from our credit cards product decreased $38.2 million, or 38%, to $62.0 million in 2023 from $100.2 million in
2022 primarily due to a decrease in the number of clicks and a decrease in revenue earned per click.
For the periods presented, no other products in our Consumer segment represented more than 10% of revenue; however,
certain other Consumer products experienced notable changes. Revenue from our small business loans product decreased
$16.5 million, or 24%, in 2023 compared to 2022, due to a decrease in revenue earned per consumer and a decrease in the
number of consumers completing request forms. Revenue from our credit products decreased $12.1 million, or 28%, in 2023
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compared to 2022 primarily due to the closure of our Ovation credit services business at the end of the second quarter of 2023.
Student loans decreased $5.7 million in 2023 compared to 2022, due to a decrease in the number of consumers.
Revenue from our Insurance segment decreased $49.5 million, or 17%, to $249.6 million in 2023 from $299.1 million in
2022 primarily due to a decrease in the revenue earned per consumer, partially offset by an increase 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. We ceased offering reverse mortgage loans in the fourth quarter of 2022. Revenue from our Home segment
decreased $145.6 million, or 50%, in 2023 from 2022 primarily due to a decrease in revenue from our mortgage products.
Revenue from our mortgage products decreased $120.8 million, or 67%, to $58.7 million in 2023 from $179.4 million in
2022. Revenue from our refinance mortgage product decreased $82.9 million in 2023 compared to 2022, primarily due to a
decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer as interest rates
continued to increase in 2023. Revenue from our purchase mortgage product decreased $37.9 million in 2023 compared to 2022
primarily due to decreases in revenue earned per consumer and in the number of consumers completing request forms.
Revenue from our home equity loans and lines of credit product decreased $20.7 million, or 20%, to $85.1 million in 2023
from $105.8 million in 2022 primarily due to a decrease the revenue earned per consumer, slightly offset by an increase in the
number of consumers completing request forms.
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 decreased in 2023 compared to 2022 primarily due to a decrease in compensation and benefits of $13.9
million, a decrease in website network hosting and server hosting fees of $2.4 million and a decrease in customer service fees of
$1.5 million. The decreases are 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 remained consistent at 6% in 2023 compared to 2022.
Selling and marketing expense
Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other
employee-related costs (including stock-based compensation) for personnel engaged in sales or marketing functions.
Advertising and promotional expenditures primarily include online marketing, as well as television, print, and radio spending.
Advertising production costs are expensed in the period the related advertisement is first run.
Selling and marketing expense decreased in 2023 compared to 2022 primarily due to the $255.8 million decrease in
advertising and promotional expense discussed below. Additionally, compensation and benefits decreased $12.9 million in
2023 compared to 2022.
Advertising and promotional expense is the largest component of selling and marketing expense, and is comprised of the
following:
Online
Broadcast
Other
Year Ended December 31,
2023 vs. 2022
2023
2022
(Dollars in thousands)
$
Change
%
Change
$
383,996 $
614,369
$
(230,373)
278
7,283
16,654
16,301
(16,376)
(9,018)
(37) %
(98) %
(55) %
(40) %
Total advertising and promotional expense
$
391,557 $
647,324
$
(255,767)
In the periods presented, advertising and promotional expenses are equivalent to the non-GAAP measure variable
marketing expense. See Variable Marketing Expense and Variable Marketing Margin below for additional information.
Revenue is primarily driven by Network Partner demand for our products, which is matched to corresponding consumer
requests. We adjust our selling and marketing expenditures dynamically in relation to anticipated revenue opportunities in
order to ensure sufficient consumer inquiries to profitably meet such demand. An increase in a product’s revenue is generally
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met by a corresponding increase in marketing spend, and conversely a decrease in a product’s revenue is generally met by a
corresponding decrease in marketing spend. This relationship exists for our Home, Consumer, and Insurance segments.
We adjusted our advertising expenditures in 2023 compared to 2022 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.
General and administrative expense
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 2023 compared to 2022, primarily due to a decrease in compensation and
benefits of $18.1 million. Additionally, professional fees, technology, facilities, and bad debt expense decreased $2.8 million,
$2.6 million, $2.4 million, and $2.3 million, respectively. We incurred a $4.2 million loss on the impairment of assets for our
Ovation business in the first quarter of 2023.
Non-cash compensation expense, included in total compensation and benefits noted above, within general and
administrative expense decreased in 2023, which resulted in an increase in net income in 2023 compared to 2022. For
additional information, see Note—13-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 increased to 18% in 2023 from 15% in 2022.
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 2023 compared to 2022 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 2023 compared to 2022 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.
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Restructuring and severance
During September 2023, we initiated 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 are expected to be substantially completed by the third 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 current workforce. As a result of the Reduction Plan,
the Company 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, is expected to be
substantially completed by the end of the second quarter of 2024.
We made the decision to close the Ovation credit services business ( the "Ovation Closure") by mid-2023 and all
operations ceased in August 2023. The Ovation Closure includes the elimination of approximately 197 employees, or 18%, of
the Company's current 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 Ovation Closure, including cash payments, is expected to
be completed by the first quarter of 2024.
During 2022, we completed workforce reductions in each of the first, second, and fourth quarters of approximately 75
employees, 25 employees, and 50 employees, respectively. We incurred total expense of $4.4 million consisting of employee
separation costs of $3.3 million and non-cash compensation expense of $1.1 million due to the accelerated vesting of certain
equity awards. All employee separation costs for 2022 actions were paid by the fourth quarter of 2023.
Interest expense
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, all
of which are included in interest income/expense, net in the consolidated statements of operations and comprehensive income.
See Note 15—Debt for additional information.
Other Income
We incurred an impairment charge of $113.1 million in 2023 related to an investment in equity securities. See Note 8 -
Equity Investments for additional information.
Other income for 2022 primarily consisted of dividend income.
Income tax benefit (expense)
Income tax benefit (expense)
Effective tax rate
Year Ended December 31,
2023
2022
(in thousands, except percentages)
$
2,515
$
(133,019)
2.0 %
(242.2) %
For 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 2022, the effective tax rate varied from the federal statutory rate of 21% primarily due to expense of $139.4 million to
record a full valuation allowance against our net deferred tax assets. See Note—14 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
Home
Consumer
Insurance
Other
Segment profit
Year Ended December 31,
2023 vs. 2022
2023
2022
(Dollars in thousands)
$
Change
%
Change
$
47,882 $
103,084 $
(55,202)
138,877
103,504
(509)
289,754 $
174,578
91,834
(35,701)
11,670
(555)
368,941 $
46
(79,187)
$
(54) %
(20) %
13 %
8 %
(21) %
Segment profit is our primary segment operating metric. 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 22—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
Revenue in the Home segment decreased 50% to $143.8 million in 2023 from 2022, with segment profit of $47.9 million in
2023, a decrease of 54% from 2022. Our Home segment margin, which is segment profit divided by segment revenue,
decreased slightly to 33% in 2023 compared to 36% in 2022.
Within Home, our core mortgage business generated revenue of $58.7 million in 2023, down 67% from 2022, as demand
for refinancing transactions diminished throughout the year, with few mortgages later in the year carrying a higher rate than
current loan offerings. The 30-year mortgage interest rates increased from a monthly average of 6.36% in December 2022 to a
monthly average of 6.82% in December 2023, according to Freddie Mac. Purchase transactions were negatively impacted by
low for sale inventory and current homeowners resisting a move in favor of retaining a significantly lower rate on their existing
loan. Existing home sales decreased 19% in 2023 compared to 2022. The volume mix in our mortgage business shifted to
purchase at 55% and refinance at 45% of total volume in 2023 as compared to refinance at 54% and purchase at 46% of total
volume in 2022.
Revenue from our home equity loan product of $85.1 million in 2023 decreased 20% from 2022 as higher short-term
interest rates broadly pressured demand from homeowners.
The Mortgage Bankers Association expects overall mortgage originations to increase in 2024, although the first quarter of
2024 is expected to remain weak and below fourth quarter of 2023 levels. The forecast calls for a 22% growth in total loan
originations over 2023, with purchase loans accounting for 77% of total volume.
CONSUMER
Revenue in our Consumer segment decreased 30% to $278.9 million in 2023 from 2022, with segment profit of $138.9
million in 2023, a decrease of 20% from 2022. Our Consumer segment margin increased to 50% in 2023 compared to 44% in
2022.
Revenue from our personal loan product of $100.1 million decreased 31% in 2023 compared to 2022 as our partners
broadly tightened underwriting criteria in 2023, however there are indications for increased loan originations and wider credit
appetite in 2024.
Credit card revenue decreased to $62.0 million or 38% in 2023 compared to 2022. We have begun onboarding credit card
issuers onto TreeQual, the prequalification/preapproval platform for our customers to more easily shop offers available to them.
TreeQual sits at the core of our strategy to drive improved credit card application conversion rates which will allow us to
reinvest additional marketing spend to gain back share in this large consumer marketplace.
Small business revenue declined 24% in 2023 from 2022. The highest quality customers continue to receive multiple loan
offers from our partners, while lower credit quality and smaller revenue business owners receive few if any offers. We are
serving partner demand for higher quality and larger revenue/loan amount effectively, as seen through a consistent increase in
match rate for those customers.
INSURANCE
Insurance revenue of $249.6 million in 2023 decreased 17% from 2022, while segment profit of $103.5 million in 2023
increased 13% from 2022 as we successfully matched higher levels of organic customer search volumes against lower overall
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carrier demand for new policies. Consumer demand across all insurance products remained high, growing 8% in 2023 from
2022.
Our auto carrier partners have been asking for and receiving successive price increases across most states over the last two
years, as persistent cost inflation negatively impacted underwriting results. The positive impact from premium increases on loss
ratios, combined with broad declines in used car prices and other components of auto loss cost, should help our record volume
of customers searching for auto insurance find an increasingly competitive partner marketplace moving into next year.
We experienced the beginning of a recovery in our auto insurance product at the end of the fourth quarter of 2023, with a
number of key carrier partners unexpectedly adding budget over the holiday season and continuing to refine their product
offering to target and write more profitable policies through our platforms.
Health insurance continued its strong growth trend, with revenue up 14% in 2023 compared to 2022. We have made great
strides capturing a growing share of carrier budgets in these categories, and we are optimistic they will help drive incremental
revenue growth in 2024.
Our Insurance segment margin increased to 42% in 2023 compared to 31% in 2022. We have maintained a focus on
efficiency and adapting to changing carrier needs throughout this hard market cycle. These efforts helped us control costs and
improve quality despite industry profitability challenges.
Variable Marketing Expense and Variable Marketing Margin
We report variable marketing expense and variable marketing margin as supplemental measures to 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. 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. We provide and encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP
measures discussed below.
Variable marketing expense is defined as the expense attributable to variable costs paid for advertising, direct marketing
and related expenses, and excluding overhead, fixed costs and personnel-related expenses. The majority of these variable
advertising costs are expressly intended to drive traffic to our websites and these variable advertising costs are included in
selling and marketing expense on our consolidated statements of operations and comprehensive income (loss). Variable
marketing margin is defined as revenue less variable marketing expense.
The following shows the calculation of variable marketing margin:
Revenue
Variable marketing expense
Variable marketing margin
Year Ended December 31,
2023
2022
(in thousands)
$
$
672,502 $
391,557
280,945 $
984,992
647,324
337,668
Below is a reconciliation of selling and marketing expense, the most directly comparable GAAP measure, to variable
marketing expense:
Selling and marketing expense
Non-variable selling and marketing expense
Variable marketing expense
45
Year Ended December 31,
2023
2022
(in thousands)
$
$
433,588 $
(42,031)
391,557 $
702,238
(54,914)
647,324
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The following is a reconciliation of net loss, the most directly comparable GAAP measure, to variable marketing margin:
Net loss
Adjustments to reconcile to variable marketing margin:
Cost of revenue
Non-variable selling and marketing expense (1)
General and administrative expense
Product development
Depreciation
Amortization of intangibles
Goodwill impairment
Restructuring and severance
Litigation settlements and contingencies
Interest (income) expense, net
Other expense (income)
Income tax (benefit) expense
Variable marketing margin
Year Ended December 31,
2023
2022
(in thousands)
$
(122,404) $
(187,952)
38,758
42,031
117,700
47,197
19,070
7,694
38,600
10,118
388
(21,685)
105,993
(2,515)
280,945 $
$
57,769
54,914
152,383
55,553
20,095
25,306
—
4,428
(18)
26,014
(3,843)
133,019
337,668
(1) Represents the portion of selling and marketing expense not attributable to variable costs paid for advertising, direct
marketing and related expenses. Includes overhead, fixed costs and personnel-related expenses.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
We report Adjusted EBITDA as a supplemental measure to GAAP. This measure is the primary metric by which we
evaluate the performance of our businesses, on which our marketing expenditures and internal budgets are based and by which,
in most years, management and many employees are compensated. 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. We provide and
encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures discussed below.
Definition of Adjusted EBITDA
We report Adjusted EBITDA as net income adjusted to exclude interest, income tax, amortization of intangibles and
depreciation, and to further exclude (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on
disposal of assets, (4) gain/loss on investments (5) restructuring and severance expenses, (6) litigation settlements and
contingencies, (7) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent
consideration), (8) contributions to the LendingTree Foundation, (9) dividend income, and (10) one-time items. Adjusted
EBITDA has certain limitations in that it does not take into account the impact to our statement of operations of certain
expenses, including depreciation, non-cash compensation and acquisition-related accounting. We endeavor to compensate for
the limitations of the non-GAAP measures presented by also providing the comparable GAAP measures with equal or greater
prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures.
These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
One-Time Items
Adjusted EBITDA is adjusted for one-time items, if applicable. Items are considered one-time in nature if they are non-
recurring, infrequent or unusual and have not occurred in the past two years or are not expected to recur in the next two years,
in accordance with SEC rules. There are no adjustments for one-time items for the year ended December 31, 2023. One-time
items for the year ended December 31, 2022 consisted of the $1.5 million franchise tax caused by the equity investment gain in
Stash.
Non-Cash Expenses that are Excluded from Adjusted EBITDA
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. These expenses are not paid in cash
46
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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.
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.
Net loss
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles
Depreciation
Restructuring and severance
Loss on impairments and disposal of assets
Loss on investments
Goodwill impairment
Non-cash compensation expense
Franchise tax caused by equity investment gain
Contribution to LendingTree Foundation
Acquisition expense
Litigation settlements and contingencies
Interest (income) expense, net
Dividend income
Income tax (benefit) expense
Adjusted EBITDA
Financial Position, Liquidity and Capital Resources
Year Ended December 31,
2023
2022
(in thousands)
$
(122,404) $
(187,952)
7,694
19,070
10,118
5,437
114,504
38,600
37,176
—
—
(5)
388
(21,685)
(7,888)
(2,515)
78,490 $
25,306
20,095
4,428
6,590
—
—
58,541
1,500
500
277
(18)
26,014
(3,842)
133,019
84,458
$
For information on fiscal 2021 results and similar comparisons, see Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations—Financial Position, Liquidity and Capital Resources of our Form 10-K for the fiscal year
ended December 31, 2022.
General
As of December 31, 2023, we had $112.1 million of cash and cash equivalents, compared to $298.8 million of cash and
cash equivalents as of December 31, 2022.
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. Our credit facility described below is an additional potential source of liquidity. We will
continue to monitor economic impacts caused by the challenging interest rate environment and high levels of inflation on our
liquidity and capital resources.
Notable transactions affecting cash and cash equivalents during the reported periods are as follows:
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2023
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, all of which are
included in interest income/expense, net in the consolidated statement of operations and comprehensive income.
For more information, see Note 15—Debt, in the notes to the consolidated financial statements included elsewhere in this
report.
2022
In 2022, we repurchased an aggregate of 379,895 shares of our common stock pursuant to a stock repurchase program for
$43.0 million.
In the first quarter of 2022, we acquired an equity interest in EarnUp for $15.0 million. See Note 8—Equity Investments in
the notes to the consolidated financial statements included elsewhere in this report for additional information on the equity
interest.
Credit Facility
On September 15, 2021, we entered into a credit agreement (the “Credit Agreement”), consisting of a $200.0 million
Revolving Facility, which matures on September 15, 2026, and a $250.0 million delayed draw Term Loan 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 February 28, 2024, we have outstanding $246.3 million under the Term Loan Facility, a $0.2 million letter of credit
under the Revolving Facility, and the remaining borrowing capacity is $199.8 million. We have $79.9 million available for
borrowing under the Revolving Facility as of February 28, 2024.
For additional information on the Credit Facility, see Note 15—Debt in the notes to the consolidated financial statements
included elsewhere in this report.
Operating Leases
We have operating lease obligations associated with office space in various cities across the country and office equipment.
Our principal executive office is located in Charlotte, North Carolina under an approximate 15-year lease that commenced in
the second quarter of 2021. We anticipate cash payments under operating lease obligations of $11.4 million in 2024. See Note
11—Leases in the notes to the consolidated financial statements included elsewhere in this report for more information.
Cash Flows
Our cash flows are as follows:
Net cash provided by operating activities
Net cash (used in) provided by investing activities
Net cash (used in) provided by financing activities
Cash Flows from Operating Activities
Year Ended December 31,
2023
2022
(in thousands)
$
$
$
67,571 $
42,967
(12,478) $
(27,876)
(242,006) $
32,536
Our largest source of cash provided by our operating activities is revenue generated by our products. 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, certain contingent consideration payments, and income taxes.
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Cash from changes in working capital increased primarily as a result of favorable changes in accounts receivable and
accounts payable, accrued expenses and other current liabilities.
Cash Flows from Investing Activities
Net cash used investing activities in 2023 of $12.5 million consisted of capital expenditures primarily related to internally
developed software.
Net cash used in investing activities in 2022 of $27.9 million consisted of the purchase of a $16.4 million equity investment
in EarnUp and another small investment, as well as capital expenditures of $11.4 million primarily related to internally
developed software.
Cash Flows from Financing Activities
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 exercise of stock options and $1.9 million
repayment of the Term Loan Facility.
Net cash provided by financing activities in 2022 of $32.5 million consisted primarily of $250.0 million in proceeds from
the term loan and the repayment of $169.7 million to settle our 2022 Notes discussed in the “Credit Facility” section above,
$43.0 million for the repurchase of our stock, $3.4 million in withholding taxes paid upon surrender of shares to satisfy
obligations on equity awards, net of proceeds from the exercise of stock options, and $1.3 million repayment of the term loan.
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. This disclosure includes accounting policies related to both continuing operations and
discontinued operations. Management is required to make certain estimates and assumptions during the preparation of the
consolidated financial statements in accordance with generally accepted accounting principles. These estimates and
assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date
of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results
could differ from those estimates. Because of the size of the financial statement elements to which they relate, some of our
accounting policies and estimates have a more significant impact on our consolidated financial statements than others. A
discussion of some of our more significant accounting policies and estimates follows.
Income Taxes
Estimates of current and deferred income taxes and the significant items giving rise to the deferred assets and liabilities are
shown in Note 14—Income Taxes in the notes to the consolidated financial statements included elsewhere in this report and
reflect management's assessment of actual future taxes to be paid on items reflected in the consolidated financial statements,
giving consideration to both timing and the probability of realization. Actual income taxes could vary from these estimates due
to future changes in income tax law, state income tax apportionment or the outcome of any review of our tax returns by the IRS
and/or state tax authorities, as well as actual operating results that may vary significantly from anticipated results.
We also recognize liabilities for uncertain tax positions based on the two-step process prescribed by the accounting
guidance for uncertainty in income taxes. The first step is to evaluate the tax position for recognition by determining if the
weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution
of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more
than 50% likely of being realized upon ultimate settlement. This measurement step is inherently difficult and requires subjective
estimations of such amounts to determine the probability of various possible outcomes. We consider many factors when
evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not
accurately anticipate actual outcomes.
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. 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
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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. 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, 2023
and 2022, we maintain a valuation allowance of $162.5 million and $145.4 million, respectively, against our net deferred tax
assets.
At December 31, 2021, we recorded a partial valuation allowance of $6.0 million primarily related to state net operating
losses, which we do not expect to be able to utilize prior to expiration.
Stock-Based Compensation
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. 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. The value of stock options issued and Employee Stock Purchase Rights are generally estimated
using a Black-Scholes option pricing model. The value of performance-based grants is measured at their grant dates and
recognized as non-cash compensation expense, considering the probability of the targets being achieved. Performance-based
grants with a market condition are generally valued using a Monte Carlo simulation model. If an award is modified, we
determine if the modification requires a new calculation of fair value or change in the vesting term of the award. See Note 13—
Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report for additional
information on assumptions and inputs to the fair value determination of stock-based awards.
Evaluation of Goodwill Impairment
We test goodwill annually for impairment as of October 1, or more frequently upon the occurrence of certain events or
substantive changes in circumstances. As part of our annual impairment testing of goodwill, we may elect to assess qualitative
factors as a basis for determining whether it is necessary to perform the traditional quantitative impairment testing. If our
assessment of these qualitative factors indicates that it is not more likely than not that the fair value of the reporting unit or
indefinite-lived intangible asset is less than its carrying value, then no further testing is required. Otherwise, the goodwill
reporting unit must be quantitatively tested for impairment.
Performing the quantitative test for goodwill impairment that compares the reporting unit fair value with its carrying value
using a discounted cash flow and market analysis requires the exercise of significant judgments, including judgments about
appropriate discount rates, revenue growth rates, marketing spend, direct operating expenses, the amount and timing of
expected future cash flows, and market multiples. 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.
The closing stock price on September 29, 2023 was $15.50 reflecting a market capitalization below our book value. In addition,
the effects of the challenging interest rate environment, low for-sale home inventories and the rise in home prices in the Home
reporting unit and consumer price inflation negatively impacting carrier underwriting in the Insurance reporting unit continue to
provide revenue headwinds. Based on these factors, we concluded that a triggering event had occurred and an interim
quantitative impairment test was performed as of September 30, 2023. Upon completing the quantitative goodwill impairment
test, we concluded that the carrying value of the Insurance reporting unit exceeded its fair value which resulted in a goodwill
impairment charge of $38.6 million. The fair value of the Home and Consumer reporting units exceeded their carrying amounts,
indicating no goodwill impairment. The fair values of each reporting unit were determined using a combination of the income
approach and the market approach valuation methodologies.
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We will continue to monitor the recovery of the Insurance reporting unit and the Mortgage reporting unit. Changes in the
timing of the recovery compared to current expectations could cause an impairment to the Insurance or Mortgage reporting
units.
The value of goodwill subject to assessment for impairment at December 31, 2023 is $381.5 million.
Recoverability of Long-Lived Assets
We review the carrying value of all long-lived assets, primarily property and equipment, definite-lived intangible assets and
operating lease right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying value
of an asset may be impaired. Impairment is considered to have occurred whenever the carrying value of a long-lived asset
cannot be recovered from cash flows that are expected to result from the use and eventual disposition of the asset. This
recoverability test requires us to make assumptions and judgments related to factors used in a calculation of undiscounted cash
flows, including, but not limited to, management’s expectations for future operations and projected cash flows. The key
assumptions used in this calculation include Adjusted EBITDA, the remaining useful lives of the primary cash flow generating
asset in the asset group and, to a lesser extent, the deduction of capital expenditures and taxes paid in cash to arrive at net cash
flows.
Capitalized implementation costs incurred in a hosting arrangement that is a service contract are also allocated to and
included within long-lived asset groups tested for recoverability.
The combined value of long-lived assets and capitalized implementation costs incurred in a hosting arrangement that is a
service contract subject to assessment for impairment is $154.7 million at December 31, 2023.
Equity Investments
Our equity investments do not have a readily determinable fair value and, upon acquisition, we elected the measurement
alternative to value these investments. Accordingly, the equity investments will be carried at cost less impairment, if any, and
subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar
investments. Additionally, if a qualitative assessment identifies impairment indicators, then the equity investments must be
evaluated for impairment and written down to its fair value, if it is determined that the fair value is less than the carrying value.
Any gains or losses are included within other (expense) income in the consolidated statement of operations and comprehensive
income.
We incurred impairment charges of $114.5 million on our investments in equity securities during 2023. See Note 8—
Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional
information. The carrying value of our equity investments at December 31, 2023 is $60.1 million.
New Accounting Pronouncements
See Note 2—Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in
this report for a description of recent accounting pronouncements.
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ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
Other than our Credit Facility, we do not have any financial instruments that are exposed to significant market risk. We
maintain our cash and cash equivalents in bank deposits and short-term, highly liquid money market investments. A
hypothetical 100-basis point increase or decrease in market interest rates would not have a material impact on the fair value of
our cash equivalents securities, or our earnings on such cash equivalents, but would have a $2.5 million annual effect on the
interest paid on borrowings under the Credit Facility. As of February 28, 2024, the Company had $246.3 million outstanding
on its Term Loan Facility, and there were no outstanding borrowings under its Revolving Facility.
Fluctuations in interest rates affect consumer demand for new mortgages and the level of refinancing activity which, in
turn, affects lender demand for mortgage leads. 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 lead volume. Due to
lower lender demand, our revenue earned per consumer typically decreases but with correspondingly lower selling and
marketing costs. Conversely, when interest rates increase, we typically see decreased consumer demand for mortgage
refinancing, leading to decreased traffic to our website and higher associated selling and marketing efforts associated with that
traffic. At the same time, lender demand for leads from third-party sources typically increases, as there are fewer consumers in
the marketplace and, accordingly, the supply of organic mortgage lead volume decreases. Due to high lender demand, we
typically see an increase in the amount lenders will pay per matched lead, which often leads to higher revenue earned per
consumer. However, increases in the amount lenders will pay per matched lead in this situation is limited by the overall cost
models of our lenders, and our revenue earned per consumer can be adversely affected by the overall reduced demand for
refinancing in a rising rate environment.
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ITEM 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
LENDINGTREE, INC. AND SUBSIDIARIES:
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Income (Loss)
Consolidated Statements of Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Page
Number
54
57
58
59
60
62
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of LendingTree, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of LendingTree, Inc. and its subsidiaries (the “Company”) as of
December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income (loss), of
shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related
notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control
over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Interim Goodwill Impairment Assessment – Home and Insurance Reporting Units
As described in Notes 2 and 7 to the consolidated financial statements, the Company’s consolidated goodwill balance was
$381.5 million as of December 31, 2023, and the goodwill associated with the Home and Insurance reporting units was $59.3
million and $156.1 million, respectively. Goodwill is tested annually for impairment as of October 1, or more frequently upon
the occurrence of certain events or substantive changes in circumstances. Management may elect to assess qualitative factors as
a basis for determining whether it is necessary to perform the traditional quantitative impairment testing. At September 29,
2023, the Company’s market capitalization was below the Company’s book value. In addition, considering the effects of the
challenging interest rate environment, low for-sale home inventories and the rise in home prices in the Home reporting unit and
consumer price inflation negatively impacting carrier underwriting in the Insurance reporting unit, management concluded that
a triggering event had occurred and an interim quantitative impairment test was performed as of September 30, 2023. The
quantitative impairment test for goodwill involves a comparison of the fair value of a reporting unit with its carrying amount,
including goodwill. Upon completing the quantitative interim goodwill impairment test, management concluded that the
carrying value of the Insurance reporting unit exceeded its fair value, which resulted in a goodwill impairment charge of $38.6
million, and that the fair value of the Home reporting unit exceeded its carrying amount, indicating no goodwill impairment.
Management determines the fair value of the Company’s reporting units by using a market approach and a discounted cash flow
analysis. Determining the fair value using a discounted cash flow analysis and market analysis requires the exercise of
significant judgments, including judgments about appropriate discount rates, revenue growth rates, marketing spend, direct
operating expenses, the amount and timing of expected future cash flows, and market multiples.
The principal considerations for our determination that performing procedures relating to the interim goodwill impairment
assessment of the Home and Insurance reporting units is a critical audit matter are (i) the significant judgment by management
when developing the fair value estimate of the Home and Insurance reporting units; (ii) a high degree of auditor judgment ,
subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue
growth rates, marketing spend, direct operating expenses, the discount rate, and market multiples; and (iii) the audit effort
involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment assessment, including controls over the valuation of the Home and Insurance reporting
units. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of
the Home and Insurance reporting units; (ii) evaluating the appropriateness of the discounted cash flow analysis and market
approach used by management; (iii) testing the completeness and accuracy of the underlying data used in the discounted cash
flow analysis and market approach; and (iv) evaluating the reasonableness of the significant assumptions used by management
related to revenue growth rates, marketing spend, direct operating expenses, the discount rate, and market multiples. Evaluating
management’s assumptions related to revenue growth rates, marketing spend, and direct operating expenses involved
considering (i) the current and past performance of the Home and Insurance reporting units and (ii) whether the assumptions
were consistent with evidence obtained in other areas of the audit, and for revenue growth rates (iii) the consistency with
external market and industry data. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the
appropriateness of the discounted cash flow analysis and market approach and (ii) the reasonableness of the assumptions related
to the discount rate and market multiples.
Equity Investment Impairment Assessment – Stash Investment
As described in Notes 2 and 8 to the consolidated financial statements, in the third quarter of 2023, management determined
there was an impairment indicator related to the Company’s Stash investment and performed a valuation of the investment,
which resulted in an impairment charge of $113.1 million. The equity investments do not have a readily determinable fair value
and, upon acquisition, the Company elected the measurement alternative to value its investments. The equity investments are
carried at cost less impairment, if any, and subsequently measured to fair value upon observable price changes in an orderly
transaction for the identical or similar investments. Additionally, if a qualitative assessment identifies impairment indicators,
then the equity investments must be evaluated for impairment and written down to its fair value, if it is determined that the fair
value is less than the carrying value. Management determined the fair value by using a market approach and a discounted cash
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flow analysis. Determining the fair value using a discounted cash flow analysis and market analysis requires the exercise of
significant judgments, including judgments about the appropriate discount rate, perpetual growth rates, including short-term
revenue and EBITDA, the amount and timing of expected future cash flows, and the revenue exit multiple.
The principal considerations for our determination that performing procedures relating to the equity investment impairment
assessment of the Stash investment is a critical audit matter are (i) the significant judgment by management when developing
the fair value estimate of the Stash investment; (ii) a high degree of auditor judgment, subjectivity, and effort in performing
procedures and evaluating management’s significant assumptions related to short-term revenue and EBITDA growth rates, the
discount rate, and the revenue exit multiple; and (iii) the audit effort involved the use of professionals with specialized skill and
knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s equity investment impairment assessment, including controls over the valuation of the Stash investment. These
procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Stash
investment; (ii) evaluating the appropriateness of the discounted cash flow analysis and market approach used by management;
(iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow analysis and market
approach; and (iv) evaluating the reasonableness of the significant assumptions used by management related to short-term
revenue and EBITDA growth rates, the discount rate, and the revenue exit multiple. Evaluating management’s assumptions
related to short-term revenue and EBITDA growth rates involved considering (i) the current and past performance of the Stash
investment and (ii) the consistency with market data. Professionals with specialized skill and knowledge were used to assist in
evaluating (i) the appropriateness of the discounted cash flow analysis and market approach and (ii) the reasonableness of the
assumptions related to the discount rate and the revenue exit multiple.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 28, 2024
We have served as the Company’s auditor since 2012.
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LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS:
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable (net of allowance of $2,222 and $2,317, respectively)
Prepaid and other current assets
Assets held for sale (Note 9)
Total current assets
Property and equipment (net of accumulated depreciation of $36,827 and $33,851, respectively)
Operating lease right-of-use assets
Goodwill
Intangible assets, net
Equity investments (Note 8)
Other non-current assets
Total assets
LIABILITIES:
Current portion of long-term debt
Accounts payable, trade
Accrued expenses and other current liabilities
Liabilities held for sale (Note 9)
Total current liabilities
Long-term debt
Operating lease liabilities
Deferred income tax liabilities
Other non-current liabilities
Total liabilities
Commitments and contingencies (Notes 16 and 17)
SHAREHOLDERS' EQUITY:
December 31,
2023
December 31,
2022
(in thousands, except par value
and share amounts)
$
112,051 $
298,845
5
54,954
29,472
—
196,482
50,481
57,222
381,539
50,620
60,076
124
83,060
26,250
5,689
413,968
59,160
67,050
420,139
58,315
174,580
6,339
6,101
802,759 $ 1,199,313
$
$
3,125 $
1,960
70,544
—
75,629
2,500
2,030
75,095
2,909
82,534
525,617
813,516
75,023
2,091
267
678,627
88,232
6,783
308
991,373
Preferred stock $.01 par value; 5,000,000 shares authorized; none issued or outstanding
Common stock $.01 par value; 50,000,000 shares authorized; 16,396,911 and 16,167,184
shares issued, respectively, and 13,041,445 and 12,811,718 shares outstanding, respectively
—
164
—
162
Additional paid-in capital
Accumulated deficit
Treasury stock; 3,355,466 and 3,355,466 shares, respectively
Total shareholders' equity
Total liabilities and shareholders' equity
1,227,849
1,189,255
(837,703)
(715,299)
(266,178)
(266,178)
124,132
207,940
802,759 $ 1,199,313
$
The accompanying notes to consolidated financial statements are an integral part of these statements.
57
Table of Contents
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Year Ended December 31,
Revenue
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately
below)
Selling and marketing expense
General and administrative expense
Product development
Depreciation
Amortization of intangibles
Goodwill impairment
Change in fair value of contingent consideration
Restructuring and severance
Litigation settlements and contingencies
Total costs and expenses
Operating (loss) income
Other (expense) income, net:
Interest income (expense), net
Other (expense) income
(Loss) income before income taxes
Income tax benefit (expense)
Net (loss) income from continuing operations
Loss from discontinued operations, net of tax
Net (loss) income and comprehensive (loss) income
Weighted average shares outstanding:
Basic
Diluted
(Loss) income per share from continuing operations:
Basic
Diluted
Loss per share from discontinued operations:
Basic
Diluted
Net (loss) income per share:
Basic
Diluted
2023
2022
(in thousands, except per share amounts)
2021
$ 672,502 $ 984,992 $ 1,098,499
38,758
433,588
117,700
47,197
19,070
7,694
38,600
—
10,118
57,769
702,238
152,383
55,553
20,095
25,306
—
—
4,428
57,297
773,990
153,472
52,865
17,910
42,738
—
(8,249)
53
388
713,113
(40,611)
(18)
1,017,754
(32,762)
392
1,090,468
8,031
21,685
(26,014)
(46,867)
(105,993)
(124,919)
2,515
(122,404)
3,843
(54,933)
123,272
84,436
(133,019)
(187,952)
—
—
$ (122,404) $ (187,952) $
(11,298)
73,138
(4,023)
69,115
12,941
12,941
12,793
12,793
13,199
13,695
(9.46) $
(9.46) $
(14.69) $
(14.69) $
5.54
5.34
— $
— $
— $
— $
(0.30)
(0.29)
(9.46) $
(14.69) $
(9.46) $
(14.69) $
5.24
5.05
$
$
$
$
$
$
The accompanying notes to consolidated financial statements are an integral part of these statements.
58
Table of Contents
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Common Stock
Treasury Stock
Total
Number
of Shares
Amount
Additional
Paid-in
Capital
(in thousands)
Accumulated
Deficit
Number
of Shares
Amount
Balance as of December 31, 2020
$
364,761
15,766 $
158 $ 1,188,673 $
(640,909)
2,641 $
(183,161)
Net income and comprehensive
income
Non-cash compensation
Purchase of treasury stock
Issuance of common stock for stock
options, restricted stock awards and
restricted stock units, net of
withholding taxes
Other
69,115
68,555
(40,008)
(14,423)
(8)
—
—
—
305
—
—
—
—
3
—
—
68,555
—
(14,426)
(8)
69,115
—
—
—
—
—
—
335
—
—
—
—
(40,008)
—
—
Balance as of December 31, 2021
$
447,992
16,071 $
161 $ 1,242,794 $
(571,794)
2,976 $
(223,169)
Net loss and comprehensive loss
Non-cash compensation
Purchase of treasury stock
Issuance of common stock for stock
options, restricted stock awards and
restricted stock units, net of
withholding taxes
Cumulative effect adjustment due to
ASU 2020-06
(187,952)
59,624
(43,009)
(3,412)
(65,303)
—
—
—
96
—
—
—
—
1
—
—
(187,952)
59,624
—
(3,413)
—
—
—
(109,750)
44,447
—
—
379
—
—
—
—
(43,009)
—
—
Balance as of December 31, 2022
$
207,940
16,167 $
162 $ 1,189,255 $
(715,299)
3,355 $
(266,178)
Net loss and comprehensive loss
Non-cash compensation
(122,404)
39,682
Issuance of common stock for stock
options, employee stock purchase plan,
restricted stock awards and restricted
stock units, net of withholding taxes
Other
(1,087)
1
—
—
230
—
—
—
2
—
—
(122,404)
39,682
(1,089)
1
—
—
—
—
—
—
—
—
—
—
—
Balance as of December 31, 2023
$
124,132
16,397 $
164 $ 1,227,849 $
(837,703)
3,355 $
(266,178)
The accompanying notes to consolidated financial statements are an integral part of these statements.
59
3,465
42,738
17,910
68,555
10,908
(8,249)
2,472
5,992
1,066
30,695
12,807
—
(123,272)
—
Table of Contents
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities attributable to continuing operations:
Net (loss) income and comprehensive (loss) income
Less: Loss from discontinued operations, net of tax
(Loss) income from continuing operations
Adjustments to reconcile income from continuing operations to net cash provided by operating activities
attributable to continuing operations:
Year Ended December 31,
2023
2022
2021
(in thousands)
$
(122,404) $
(187,952) $
69,115
—
—
(122,404)
(187,952)
4,023
73,138
Loss on impairments and disposal of assets
Amortization of intangibles
Depreciation
Non-cash compensation expense
Deferred income taxes
Change in fair value of contingent consideration
Bad debt expense
Amortization of debt issuance costs
Write-off of previously-capitalized debt issuance costs
Amortization of debt discount
5,437
7,694
19,070
39,682
6,590
25,306
20,095
59,624
(4,692)
132,666
—
1,752
3,137
—
—
—
4,101
6,432
—
1,475
Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities
(4,404)
(1,547)
Gain on settlement of convertible debt
Loss (gain) on investments
Loss on impairment of goodwill
Changes in current assets and liabilities:
Accounts receivable
Prepaid and other current assets
Accounts payable, accrued expenses and other current liabilities
Income taxes receivable
Other, net
(48,562)
114,504
38,600
27,706
(2,977)
(5,541)
(140)
(1,291)
—
—
—
9,143
(10,289)
(4,313)
(28,418)
214
(449)
(4,902)
(1,537)
10,680
(921)
Net cash provided by operating activities attributable to continuing operations
67,571
42,967
131,256
Cash flows from investing activities attributable to continuing operations:
Capital expenditures
Purchase of equity investment
Proceeds from the sale of equity investment
Other investing activities
(12,528)
(11,443)
(35,065)
—
—
50
(16,440)
—
7
(1,180)
46,312
—
Net cash (used in) provided by investing activities attributable to continuing operations
(12,478)
(27,876)
10,067
Cash flows from financing activities attributable to continuing operations:
Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of
stock options
Purchase of treasury stock
Proceeds from term loan
Repayment of term loan
Repurchases of 0.50% Convertible Senior Notes
Repayment of 0.625% Convertible Senior Notes
Payment of debt issuance costs
Payment of original issue discount on term loan
Other financing activities
Net cash (used in) provided by financing activities attributable to continuing operations
Total cash (used in) provided by continuing operations
Discontinued operations:
Net cash provided by operating activities attributable to discontinued operations
Total cash provided by discontinued operations
(1,088)
(3,411)
—
—
(43,009)
250,000
(1,875)
(1,250)
(237,464)
—
—
(169,659)
(1,580)
(135)
—
1
(242,006)
(186,913)
—
—
—
—
32,536
47,627
—
—
Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period
(186,913)
298,969
47,627
251,342
60
(14,423)
(40,008)
—
—
—
—
(6,385)
(2,500)
(31)
(63,347)
77,976
3,317
3,317
81,293
170,049
Table of Contents
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period
$
112,056 $
298,969 $
251,342
Non-cash investing activities:
(Decrease) increase in capital expenditures included in accounts payable and accrued expenses
Supplemental cash flow information:
Interest paid
Income tax payments
Income tax refunds
$
$
(377) $
(294) $
(4,793)
23,685 $
19,017 $
1,283
100
404
287
8,912
186
10,503
The accompanying notes to consolidated financial statements are an integral part of these statements.
61
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1—ORGANIZATION
Company Overview
LendingTree, Inc. is the parent of LT Intermediate Company, LLC, which holds all of the outstanding ownership interests
of LendingTree, LLC, and LendingTree, LLC owns several companies (collectively, “LendingTree” or the “Company”).
LendingTree operates what it believes to be the leading online consumer platform that connects consumers with the choices
they need to be confident in their financial decisions. The Company offers consumers tools and resources, including free credit
scores, that facilitate comparison-shopping for mortgage loans, home equity loans and lines of credit, auto loans, credit cards,
deposit accounts, personal loans, student loans, small business loans, insurance quotes, sales of insurance policies and other
related offerings. The Company primarily seeks to match in-market consumers with multiple providers on its marketplace who
can provide them with competing quotes for loans, deposit products, insurance or other related offerings they are seeking. The
Company also serves as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of
customer acquisition with directly measurable benefits, by matching the consumer inquiries it generates with these providers.
The consolidated financial statements include the accounts of LendingTree and all its wholly-owned entities, except Home
Loan Center, Inc. (“HLC”) subsequent to its bankruptcy filing on July 21, 2019 which resulted in the Company's loss of a
controlling interest in HLC under applicable accounting standards. Intercompany transactions and accounts have been
eliminated. The HLC bankruptcy case was closed on July 14, 2021. The HLC entity was legally dissolved in the first quarter
of 2022. See Note 21—Discontinued Operations for additional information.
Discontinued Operations
The LendingTree Loans business, which consisted of originating various consumer mortgage loans through HLC (the
“LendingTree Loans Business”), is presented as discontinued operations in the accompanying consolidated balance sheets,
consolidated statements of operations and comprehensive income (loss) and consolidated cash flows for all periods presented,
where applicable. The notes accompanying these consolidated financial statements reflect the Company's continuing operations
and, unless otherwise noted, exclude information related to the discontinued operations. See Note 21 —Discontinued
Operations for additional information.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities
and Exchange Commission (“SEC”).
NOTE 2—SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
The Company derives its revenue primarily from match fees and closing fees. Revenue is recognized when performance
obligations under the terms of a contract with a customer are satisfied and promised services have transferred to the customer.
In identifying performance obligations, judgment is required around contracts where there was a possibility of bundled services
and multiple parties. In applying judgment, the Company considers customer expectations of performance, materiality and the
core principles of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. The
Company's services are generally transferred to the customer at a point in time.
Variable consideration is included in revenue if it is probable that a significant future reversal of cumulative revenue under
the contract will not occur.
Revenue from Home products is primarily generated from upfront match fees paid by mortgage Network Partners that
receive a loan request, and in some cases upfront fees for clicks or call transfers. Match fees and upfront fees for clicks and call
transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates. The
Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations
remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the
performance obligation to deliver a loan request to the customer.
62
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Revenue from Consumer products is generated by match and other upfront fees for clicks or call transfers, as well as from
closing fees, approval fees and upfront service and subscription fees. Closing fees are derived from lenders on certain auto
loans, business loans, personal loans and student loans when the lender funds a loan with the consumer. Approval fees are
derived from credit card issuers when the credit card consumer receives card approval from the credit card issuer. Upfront
service fees and subscription fees were derived from consumers in the Company's credit services product. Upfront fees paid by
consumers were recognized as revenue over the estimated time the consumer was expected to remain a customer and receive
services. Subscription fees were recognized over the period a consumer was receiving services. As of the second quarter of
2023, the Company discontinued providing its credit services product to consumers and no longer receives upfront fees and
subscription fees.
Under ASC Topic 606, the timing of recognizing revenue for closing fees and approval fees is accelerated to the point
when a loan request or a credit card consumer is delivered to the customer, as opposed to when the consumer loan is closed by
the lender or credit card approval is made by the issuer. The Company's contractual right to closing fees and approval fees is not
contemporaneous with the satisfaction of the performance obligation to deliver a loan request or a credit card consumer to the
customer. As such, the Company records a contract asset at each reporting period-end related to the estimated variable
consideration on closing fees and approval fees for which the Company has satisfied the related performance obligation but are
still pending the loan closing or credit card approval before the Company has a contractual right to payment. This estimate is
based on the Company's historical closing rates and historical time between when a consumer request for a loan or credit card is
delivered to the lender or card issuer and when the loan is closed by the lender or approved by the card issuer. The time
between satisfaction of the Company's performance obligation and when the Company's right to consideration becomes
unconditional varies across products but is generally less than 90 days for auto loans, personal loans, student loans and credit
card approvals. The time between satisfaction of the Company's performance obligation and when the Company's right to
consideration becomes unconditional for small business loans is generally less than 5 years.
Revenue from the Company's Insurance products is primarily generated from upfront match fees and upfront fees for
website clicks or fees for calls. Match fees and upfront fees for clicks and call transfers are earned through the delivery of
consumer requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a
consumer request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right
to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a consumer
request to the customer.
Our payment terms vary by customer and services offered. The term between invoicing and when payment is due is
generally 30 days or less.
Sales commissions are incremental costs of obtaining contracts with customers. The Company expenses sales commissions
when incurred as the duration of contracts with customers is less than one year, based on the right of either party to terminate
the contract with less than one year's notice without compensation to either party. These costs are recorded within selling and
marketing expense on the consolidated statements of operations and comprehensive income (loss).
Cash and Cash Equivalents
Cash and cash equivalents include cash and short-term, highly liquid money market investments with original maturities of
three months or less.
Restricted Cash
Cash escrowed or contractually restricted for a specific purpose is designated as restricted cash.
Accounts Receivable
Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts.
The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of
time accounts receivable are past due, previous loss history, current and expected economic conditions and the specific
customer's current and expected ability to pay its obligation. Accounts receivable are considered past due when they are
outstanding longer than the contractual payment terms. Accounts receivable are written off when management deems them
uncollectible.
63
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the beginning and ending balances of the allowance for doubtful accounts is as follows (in thousands):
Balance, beginning of the period
Charges to earnings
Write-off of uncollectible accounts receivable
Recoveries collected
Assets held for sale (Note 9)
Balance, end of the period
Segment Reporting
Year Ended December 31,
2023
2022
2021
$
2,317 $
1,456 $
1,752
4,101
1,402
2,472
(2,274)
(2,869)
(2,424)
56
371
—
(371)
6
—
$
2,222 $
2,317 $
1,456
The Company has three reportable segments: Home, Consumer, and Insurance. Characteristics which were relied upon in
making the determination of the reportable segments include the nature of the products, the organization's internal structure, and
the information that is regularly reviewed by the chief operating decision maker, or CODM, for the purpose of assessing
performance and allocating resources.
Property and Equipment
Property and equipment, including internally-developed software and significant improvements, are recorded at cost less
accumulated depreciation. Due to the rapid advancements in technology and evolution of company products, all internally-
developed software is written off at the end of its useful life. Repairs and maintenance and any gains or losses on dispositions
are recognized as incurred in current operations.
Depreciation is recorded on a straight-line basis to allocate the cost of depreciable assets to operations over their estimated
service lives. The following table presents the estimated useful lives for each asset category:
Asset Category
Computer equipment and capitalized software
Leasehold improvements
Furniture and other equipment
Aircraft
Hosting Arrangement that is a Service Contract
Estimated Useful Lives
1 to 5 years
Lesser of asset life or life of lease
7 years
10 years
Subsequent to the adoption of ASU 2018-15 in the first quarter of 2020, as described below, qualifying implementation
costs incurred in a hosting arrangement that is a service contract are capitalized and deferred on a straight-line basis over the
term of the hosting arrangement, which is typically one to five years. These costs are capitalized to prepaid and other current
assets and other non-current assets on the balance sheet, and the associated amortization expense is included within general and
administrative expense on the statement of operations and comprehensive income (loss). The majority of such capitalized
implementation costs arise from internal and external labor associated with software development, described below.
Software Development Costs
Software development costs primarily include internal and external labor expenses incurred to develop the software that
powers the Company's websites. Certain costs incurred during the application development stage are capitalized, either as
property and equipment or as a hosting arrangement that is a service contract, based on specific activities tracked, while costs
incurred during the preliminary project stage and post-implementation/operation stage are expensed as incurred. Capitalized
software development costs are amortized over an estimated useful life of one to five years.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill acquired in business combinations is assigned to the reporting units that are expected to benefit from the
combination as of the acquisition date. Goodwill and indefinite-lived intangible assets, consisting of certain trade names and
64
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
trademarks, are not amortized. Rather, these assets are tested annually for impairment as of October 1, or more frequently upon
the occurrence of certain events or substantive changes in circumstances.
As part of its annual impairment testing of goodwill and indefinite-lived intangible assets, in each instance, the Company
may elect to assess qualitative factors as a basis for determining whether it is necessary to perform the traditional quantitative
impairment testing. If the Company’s assessment of these qualitative factors indicates that it is not more likely than not that the
fair value of the reporting unit or indefinite-lived intangible asset is less than its carrying value, then no further testing is
required. Otherwise, the goodwill reporting unit or long-lived intangible assets, as applicable, must be quantitatively tested for
impairment.
The quantitative impairment test for goodwill involves a comparison of the fair value of a reporting unit with its carrying
amount, including goodwill. The Company determines the fair value of its reporting units by using a market approach and a
discounted cash flow (“DCF”) analysis. Determining fair value using a DCF analysis and market analysis requires the exercise
of significant judgments, including judgments about appropriate discount rates, revenue growth rates, marketing spend, direct
operating expenses, the amount and timing of expected future cash flows, and market multiples. If the fair value of a reporting
unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. If the carrying amount of a reporting unit
exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.
The quantitative impairment test for indefinite-lived intangible assets involves a comparison of the estimated fair value of
the intangible asset with its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds its estimated fair
value, an impairment loss is recognized in an amount equal to that excess. The estimates of fair value of indefinite-lived
intangible assets are determined using a DCF valuation analysis that employs a relief-from-royalty methodology in estimating
the fair value of trade names and trademarks. Significant judgments inherent in this analysis include the determination of
royalty rates, discount rates, perpetual growth rates and the amount and timing of future revenues.
Results of the October 1, 2023, 2022 and 2021 qualitative annual impairment tests indicated that it is not more likely than
not that the fair value of the goodwill and the indefinite-lived intangible assets were each less than their respective carrying
values. Accordingly, no further testing was required.
At December 31, 2023, the Company performed its quarterly review of impairment triggering events for goodwill and
determined that a triggering event had not occurred.
Long-Lived Assets and Intangible Assets with Definite Lives
Long-lived assets include property and equipment, definite-lived intangible assets and operating lease right-of-use assets.
Amortization of definite-lived intangible assets is recorded on a straight-line basis over their estimated lives.
Capitalized implementation costs incurred in a hosting arrangement that is a service contract are also allocated to and
included within long-lived asset groups tested for recoverability.
Long-lived asset groups are tested for recoverability whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable. The carrying amount of a long-lived asset group is not recoverable if it exceeds the
sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If the carrying
amount is deemed to not be recoverable, an impairment loss is recorded as the amount by which the carrying amount of the
long-lived asset group exceeds its fair value.
At December 31, 2023 and 2022, the Company performed its review of impairment triggering events for long-lived asset
groups and determined that a triggering event had not occurred.
Assets and Liabilities Held for Sale
The Company classifies assets or disposal groups to be sold as held for sale in the period in which all of the following
criteria are met:
• Management, having the authority to approve the action, commits to a plan to sell the asset or disposal group;
•
•
The asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual
and customary for sales of such assets or disposal groups;
An active program to locate a buyer and other actions required to complete the plan to sell the asset or disposal group
have been initiated;
65
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
•
•
•
The sale of the asset or disposal group is probable and transfer of the asset or disposal group is expected to qualify for
recognition as a completed sale within one year, except if events or circumstances beyond the Company's control
extend the period of time required to sell the asset or disposal group beyond one year;
The asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair
value; and
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or
that the plan will be withdrawn.
A long-lived asset or disposal group that is classified as held for sale is initially measured at the lower of its carrying value or
fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held-for-sale
criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset or disposal group until the date of sale.
The fair value of a long-lived asset or disposal group, less any costs to sell, is assessed each reporting period it remains
classified as held for sale and any subsequent changes are reported as an adjustment to the carrying value of the asset or
disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially
classified as held for sale.
Equity Investments
The equity investments do not have a readily determinable fair value and, upon acquisition, the Company elected the
measurement alternative to value its investments. Accordingly, the equity investments will be carried at cost less impairment, if
any, and subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar
investments. Additionally, if a qualitative assessment identifies impairment indicators, then the equity investments must be
evaluated for impairment and written down to its fair value, if it is determined that the fair value is less than the carrying value.
Any gains or losses are included within other (expense) income in the consolidated statement of operations and comprehensive
income.
Fair Value Measurements
The Company categorizes its assets and liabilities measured at fair value into a fair value hierarchy that prioritizes the
assumptions used in pricing the asset or liability into the following three levels:
•
•
•
Level 1: Observable inputs, such as quoted prices for identical assets and liabilities in active markets obtained from
independent sources.
Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities in
active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that
are derived principally from or corroborated by observable market data.
Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop its
own assumptions, based on the best information available under the circumstances, about the assumptions market
participants would use in pricing the asset or liability.
The Company's non-financial assets, such as goodwill, intangible assets and property and equipment are recorded at fair
value upon acquisition. These assets are remeasured at fair value when there is an indicator of impairment and recorded at fair
value only when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.
Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3
unobservable inputs. The Company's estimates of fair value are based upon assumptions believed to be reasonable but which
are uncertain and involve significant judgments by management. Any changes in the fair value of these contingent
consideration payments are included in operating income in the consolidated statements of operations and comprehensive
income (loss). At December 31, 2023, the Company had no outstanding contingent consideration arrangements.
Cost of Revenue
Cost of revenue consists primarily of expenses associated with compensation and other employee-related costs (including
stock-based compensation) related to internally-operated customer call centers, third-party customer call center fees, credit
scoring fees, credit card fees, website network hosting and server fees.
66
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Product Development
Product development expense consists primarily of compensation and other employee-related costs (including stock-based
compensation), as well as third-party labor costs that are not capitalized, for employees and consultants engaged in the design,
development, testing and enhancement of technology.
Advertising and Promotional Expense
Advertising and promotional costs are expensed in the period incurred (except for production costs which are initially
capitalized and then recognized as expense when the advertisement first runs) and principally represent offline costs, including
television, print and radio advertising, and online advertising costs, including fees paid to search engines and distribution
partners. Advertising and promotional expense was $391.6 million, $647.3 million and $716.6 million for the years ended
December 31, 2023, 2022 and 2021, respectively, and is included in selling and marketing expense on the consolidated
statements of operations and comprehensive income (loss).
Income Taxes
Income taxes are accounted for under the liability method and deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. In estimating future tax consequences, all expected future events are
considered. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled. 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. Interest is recorded on potential tax
contingencies as a component of income tax expense and recorded net of any applicable related income tax benefit. For the year
ended December 31, 2021, the Company followed the incremental or “with” and “without” approach to intraperiod tax
allocation for determination of the amount of tax benefit to allocate to continuing operations as prescribed in ASC 740-20-45-7.
In accordance with the accounting standard for uncertainty in income taxes, liabilities for uncertain tax positions are
recognized based on the two-step process prescribed by the accounting standards. The first step is to evaluate the tax position
for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be
sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax
benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.
Stock-Based Compensation
The forms of stock-based awards granted to LendingTree 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 the Company's Chairman and Chief Executive
Officer. RSUs are awards in the form of units, denominated in a hypothetical equivalent number of shares of LendingTree
common stock and with the value of each award equal to the fair value of LendingTree common stock at the date of grant.
RSUs may be settled in cash, stock or both, as determined by the Company's Compensation Committee at the time of grant. The
Company does not have a history of settling these awards in cash. Each stock-based award is subject to service-based vesting,
where a specific period of continued employment must pass before an award vests. The Compensation Committee can modify
the vesting provisions of an award. Certain awards also include performance-based vesting, where certain performance targets
set at the time of grant must be achieved before an award vests.
LendingTree recognizes as expense non-cash compensation for all stock-based awards for which vesting is considered
probable. Forfeitures are recognized when they occur.
For service-based awards, non-cash compensation is measured at fair value on the grant date and expensed ratably over the
vesting term. The fair value of stock option awards without a market condition and Employee Stock Purchase Rights are
typically estimated using the Black-Scholes option pricing model, while the fair value of an RSU or RSA is measured as the
closing common stock price at the time of grant. For performance-based grants, the fair value is measured on the grant date and
recognized as non-cash compensation expense, considering the probability of the targets being achieved. Performance-based
grants with a market condition are typically valued using a Monte Carlo simulation model. Non-cash compensation expense for
single cliff-vesting grants with a market condition are recognized on a straight-line basis, while graded-vesting grants with a
market condition use graded vesting expense attribution.
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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Excess tax benefits and deficiencies that arise due to the difference in the measure of stock compensation and the amount
deductible for tax purposes are recorded in income tax expense within the consolidated statement of operations and
comprehensive income (loss), and are classified as a component of operating cash flows within the consolidated statements of
cash flows.
Litigation Settlements and Contingencies
Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements.
The Company is involved in legal proceedings on an ongoing basis. If the Company believes that a loss arising from such
matters is probable and can be reasonably estimated, the estimated liability is accrued in the consolidated financial statements.
If only a range of estimated losses can be determined, an amount within the range is accrued that, in the Company's judgment,
reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the low
end of the range is accrued. For those proceedings in which an unfavorable outcome is reasonably possible but not probable, an
estimate of the reasonably possible loss or range of losses or a conclusion that an estimate of the reasonably possible loss or
range of losses arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are not
material is disclosed. Legal expenses associated with these matters are recognized as incurred.
Accounting Estimates
Management is required to make certain estimates and assumptions during the preparation of the consolidated financial
statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and
disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the
reported amount of net earnings during any period. Actual results could differ from those estimates.
Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations,
include: the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and
deferred income taxes, including related valuation allowances; fair value of assets acquired in a business combination;
contingent consideration related to business combinations; litigation accruals; contract assets; various other allowances,
reserves and accruals; assumptions related to the determination of stock-based compensation; and the determination of right-of-
use assets and lease liabilities.
Certain Risks and Concentrations
LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology
providers, exposure to risks associated with online commerce security and credit card fraud.
Financial instruments, which potentially subject the Company to concentration of credit risk at December 31, 2023, consist
primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash
equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial
institutions of high credit. The Company requires certain Network Partners to maintain security deposits with the Company,
which, in the event of non-payment, would be applied against any accounts receivable outstanding.
Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the
Company's marketplace.
For the years ended December 31, 2023 and December 31, 2022, and December 31, 2021 there were no network partners
accounting for more than 10% of total revenue.
Lenders and lead purchasers participating on the Company's marketplace can offer their products directly to consumers
through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders and lead
purchasers can also offer their products online, either directly to prospective borrowers, through one or more online
competitors, or both. If a significant number of potential consumers are able to obtain loans and other products from Network
Partners without utilizing the Company's services, the Company's ability to generate revenue may be limited. Because the
Company does not have exclusive relationships with the Network Partners whose loans and other financial products are offered
on its online marketplace, consumers may obtain offers from these Network Partners without using its service.
Other than a support services office in India, the Company's operations are geographically limited to and dependent upon
the economic condition of the United States.
68
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Recently Adopted Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, which simplifies the accounting for
convertible instruments, amends the derivatives scope exception guidance for contracts in an entity’s own equity, and amends
the related earnings-per-share guidance. Under the new guidance, the embedded conversion features are no longer separated
from the host contract for convertible instruments with conversion features that are not required to be accounted for as
derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. As a result, a
convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features
require bifurcation and recognition as derivatives. Additionally, the new guidance requires the if-converted method to be
applied for all convertible instruments when calculating diluted earnings per share. This ASU is effective for annual and
interim reporting periods beginning after December 15, 2021, with early adoption permitted for periods beginning after
December 15, 2020. An entity may adopt the amendments through either a modified retrospective method of transition or a
fully retrospective method of transition.
The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective transition approach and
recognized the cumulative effect of initially applying ASU 2020-06 as a $44.4 million adjustment to the opening balance of
accumulated deficit, comprised of $60.8 million for the interest adjustment, net of $16.4 million for the related tax impacts.
The recombination of the equity conversion component of our convertible debt remaining outstanding caused a reduction in
additional paid-in capital and an increase in deferred income tax assets. The removal of the remaining debt discounts recorded
for this previous separation had the effect of increasing our net debt balance. ASU 2020-06 also requires the dilutive impact of
convertible debt instruments to utilize the if-converted method when calculating diluted earnings per share and the result is
more dilutive. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be
reported under the accounting standards in effect for those periods. See Note 15—Debt for further information.
The cumulative effect of the changes made to the consolidated January 1, 2022 balance sheet for the adoption of ASU
2020-06 were as follows (in thousands):
Assets:
Deferred income tax assets
Liabilities:
Current portion of long-term debt
Long-term debt
Shareholders' equity:
Additional paid-in capital
Accumulated deficit
December 31, 2021
Adjustments due to
ASU 2020-06
January 1, 2022
$
$
$
87,581 $
23,979 $
111,560
166,008 $
478,151
3,213 $
86,069
169,221
564,220
1,242,794 $
(571,794)
(109,750) $
44,447
1,133,044
(527,347)
The adoption of ASU 2020-06 did not impact our cash flows or compliance with debt covenants.
In May 2021, the FASB issued ASU 2021-04 to clarify and reduce diversity in accounting for modifications or exchanges
of freestanding equity-classified written call options that remain equity classified after modification or exchange. The
amendments clarify that a modification of the terms or conditions, or an exchange of a freestanding equity-classified written
call option that remains equity classified after modification or exchange, should be accounted for as an exchange of the original
instrument for a new instrument. This ASU is effective for annual and interim reporting periods beginning after December 15,
2021. Early adoption is permitted, including adoption in interim periods. An entity should adopt the guidance as of the
beginning of its annual fiscal year. The amendments should be applied prospectively to modifications or exchanges occurring
on or after the date of adoption. The Company adopted ASU 2021-04 in the second quarter of 2021.
In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain
exceptions to the general principles in ASC Topic 740, Income Taxes, and clarifies certain aspects of the current guidance to
improve consistency among reporting entities. This ASU is effective for annual and interim reporting periods beginning after
December 15, 2020. Early adoption is permitted, including adoption in interim periods. Entities electing early adoption must
adopt all amendments in the same period. Most amendments must be applied prospectively while others are to be applied on a
69
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained
earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2019-12 in the first quarter of 2021. The
amendments applicable to the Company required prospective application, and do not have material impacts to its consolidated
financial statements.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07 which expands annual and interim disclosure requirements for
reportable segments, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for
annual periods beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024.
Early adoption is permitted, including adoption in interim periods. An entity should adopt the guidance as of the beginning of
the earliest period presented. The Company is evaluating the impact this ASU will have on its consolidated financial statements
and whether to early adopt.
In December 2023, the FASB issued ASU 2023-09 which expands annual disclosure requirements for income taxes,
primarily through disclosure about disaggregated information about an entity's effective tax rate reconciliation and information
on income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption
permitted. The guidance will be applied on a prospective basis with the option to adopt the guidance retrospectively. The
Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.
NOTE 3—REVENUE
Revenue is as follows (in thousands):
Revenue:
Home
Credit cards
Personal loans
Other Consumer
Consumer
Insurance
Other
Total revenue
Year Ended December 31,
2023
2022
2021
$
143,753 $
289,383 $
62,000
100,124
116,821
278,945
249,605
199
100,229
144,148
151,732
396,109
299,073
427
441,738
93,420
110,099
126,426
329,945
326,153
663
$
672,502 $
984,992 $
1,098,499
The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated
variable consideration was $13.7 million and $12.2 million on December 31, 2023 and 2022, respectively.
The contract liability recorded within accrued expenses and other current liabilities on the consolidated balance sheets
related to upfront fees paid by consumers in the Company's Consumer business was $0.9 million at December 31, 2022. As the
contract liability was in the Ovation business that was closed during 2023, there is no contract liability at December 31, 2023.
During 2023, the Company recognized revenue of $0.9 million that was included in the contract liability balance at December
31, 2022. During 2022, the Company recognized revenue of $0.8 million that was included in the contract liability balance at
December 31, 2021.
Revenue recognized in any reporting period includes estimated variable consideration for which the Company has satisfied
the related performance obligations but are still pending the occurrence or non-occurrence of a future event outside the
Company's control (such as lenders providing loans to consumers or credit card approvals of consumers) before the Company
has a contractual right to payment. The Company recognizes increases or decreases to such revenue from prior periods. The
Company recognized an immaterial increase to such revenue from prior periods in 2023, and increases to such revenue from
prior periods of $0.5 million and $0.7 million in 2022 and 2021, respectively.
70
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4—CASH AND RESTRICTED CASH
Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands):
Cash and cash equivalents
Restricted cash and cash equivalents
Total cash, cash equivalents, restricted cash and restricted cash equivalents
NOTE 5—PROPERTY AND EQUIPMENT
The balance of property and equipment, net is as follows (in thousands):
December 31,
2023
December 31,
2022
$
$
112,051 $
5
112,056 $
298,845
124
298,969
December 31,
2023
December 31,
2022
Computer equipment and capitalized software
$
39,421 $
Leasehold improvements
Furniture and other equipment
Aircraft
Projects in progress
Total gross property and equipment
Accumulated depreciation
Total property and equipment, net
32,502
8,853
2,598
3,934
87,308
(36,827)
42,710
33,776
9,635
2,598
4,292
93,011
(33,851)
$
50,481 $
59,160
Unamortized capitalized software development costs recorded in property and equipment, whether in service or under
development, are $17.5 million and $19.0 million at December 31, 2023 and 2022, respectively. Capitalized software
development depreciation expense was $13.4 million, $14.1 million and $13.3 million for the years ended December 31, 2023,
2022 and 2021, respectively.
Long-lived assets located outside the United States, the Company's country of domicile, were immaterial at December 31,
2023 and December 31, 2022.
NOTE 6—HOSTING ARRANGEMENTS
The balance of capitalized implementation costs incurred in a hosting arrangement that is a service contract, which are
recorded within prepaid and other current assets and other non-current assets, is as follows (in thousands):
December 31, 2023
December 31, 2022
Current
portion
Non-current
portion
Current
portion
Non-current
portion
Capitalized implementation costs
$
2,646 $
5,679 $
Projects in progress
Total gross
Accumulated amortization
Total net
934
3,580
1,869
7,548
(1,179)
2,401 $
(3,457)
4,091 $
$
2,558 $
247
2,805 $
(576)
2,229 $
4,997
560
5,557
(2,754)
2,803
Amortization expense included within general and administrative expense on the consolidated statement of operations and
comprehensive income (loss) associated with these capitalized implementation costs was $3.5 million, $2.5 million and
$1.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.
71
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7—GOODWILL AND INTANGIBLE ASSETS
The balance of goodwill, net is as follows (in thousands):
Balance at December 31, 2021
Changes in goodwill
Balance at December 31, 2022
Changes in goodwill
Balance at December 31, 2023
The balance of intangible assets, net is as follows (in thousands):
Intangible assets with indefinite lives
Intangible assets with definite lives, net
Total intangible assets, net
Goodwill and Indefinite-Lived Intangible Assets
Goodwill
Accumulated
Impairment Loss
Net Goodwill
$
$
$
903,227 $
(483,088) $
420,139
—
—
—
903,227 $
(483,088) $
420,139
—
(38,600)
(38,600)
903,227 $
(521,688) $
381,539
December 31,
2023
December 31,
2022
$
$
10,142 $
40,478
50,620 $
10,142
48,173
58,315
The Company's goodwill at December 31, 2023 consists of $59.3 million associated with the Home reporting unit,
$166.1 million associated with the Consumer reporting unit, and $156.1 million associated with the Insurance reporting unit.
During the third quarter of 2023, the Company’s market capitalization declined significantly compared to the second
quarter of 2023. The closing stock price on September 29, 2023 was $15.50 reflecting a market capitalization below the
Company's book value. In addition, the effects of the challenging interest rate environment, low for-sale home inventories and
the rise in home prices in the Home reporting unit and consumer price inflation negatively impacting carrier underwriting in the
Insurance reporting unit continued to provide revenue headwinds. Based on these factors, it was concluded that a triggering
event had occurred and an interim quantitative impairment test was performed as of September 30, 2023. Upon completing the
quantitative goodwill impairment test, the Company concluded that the carrying value of the Insurance reporting unit exceeded
its fair value which resulted in a goodwill impairment charge of $38.6 million. The fair value of the Home and Consumer
reporting units exceeded their carrying amounts, indicating no goodwill impairment. The fair values of each reporting unit were
determined using a combination of the income approach and the market approach valuation methodologies.
Intangible assets with indefinite lives relate to the Company's trademarks.
Intangible Assets with Definite Lives
Intangible assets with definite lives relate to the following (dollars in thousands):
Customer lists
Trademarks and tradenames
Balance at December 31, 2023
Customer lists
Trademarks and tradenames
Balance at December 31, 2022
Cost
76,100
1,300
Accumulated
Amortization
(35,644)
(1,278)
Net
40,456
22
$
77,400 $
(36,922) $
40,478
Cost
77,300
10,100
Accumulated
Amortization
(30,775)
(8,452)
$
87,400 $
(39,227) $
Net
46,525
1,648
48,173
Weighted
Average
Amortization
Life
13.3 years
5.0 years
Weighted
Average
Amortization
Life
13.2 years
4.9 years
72
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During 2023 certain trademarks and tradenames and customer list intangible assets became fully amortized, reducing the
cost and accumulated amortization in the table above.
Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of
December 31, 2023, future amortization is estimated to be as follows (in thousands):
Year ending December 31, 2024
Year ending December 31, 2025
Year ending December 31, 2026
Year ending December 31, 2027
Year ending December 31, 2028
Thereafter
Total intangible assets with definite lives, net
NOTE 8—EQUITY INVESTMENTS
Amortization
Expense
$
$
5,889
5,830
5,504
5,198
4,685
13,372
40,478
In January 2022, the Company acquired an equity interest in EarnUp Inc. (“EarnUp”) for $15.0 million. EarnUp is a
consumer-first mortgage payment platform that intelligently automates loan payment scheduling and helps consumers better
manage their money and improve their financial well-being.
On February 28, 2020, the Company acquired an equity interest in Stash Financial, Inc. (“Stash”) for $80.0 million. On
January 6, 2021, the Company acquired an additional equity interest for $1.2 million. On October 18, 2021, the Company
entered into a stock transfer agreement with third parties to sell a portion of its Stash equity securities for $46.3 million. The
Company sold $35.3 million in October and closed on an additional $11.0 million in November 2021. The Company recorded
a realized gain of $27.9 million based on the sale of Stash equity securities under the stock transfer agreement, which is
included within other income on the consolidated statement of operations and comprehensive income. Stash is a consumer
investing and banking platform. Stash brings together banking, investing, and financial services education into one seamless
experience offering a full suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and
banking services, including checking accounts and debit cards with a Stock-Back® rewards program.
In 2021, the Company recorded a net unrealized gain on the investment in Stash of $95.4 million as a result of an
adjustment to the fair value of the Stash equity securities based on observable market events.
In the third quarter of 2023, the Company determined there was an impairment indicator related to its Stash investment and
performed a valuation of the investment. Based on the valuation, the Company determined the estimated fair value was below
the carrying value of the investment and recorded an impairment charge of $113.1 million. The Company determined the fair
value by using a market approach and a DCF analysis. Determining the fair value using a DCF analysis and a market analysis
requires the exercise of significant judgments, including judgments about the appropriate discount rate, perpetual growth rates,
including short-term revenue and EBITDA, the amount and timing of expected future cash flows, and the revenue exit multiple.
In the second quarter of 2023, the Company recorded an impairment charge of $1.4 million on one of its investment in
equity securities.
These impairments are included within other income on the consolidated statement of operations and comprehensive income.
As of December 31, 2022, there had been no impairments to the acquisition cost of the equity securities.
NOTE 9—ASSETS AND LIABILITIES HELD FOR SALE
In the fourth quarter of 2022, the Company approved a plan to sell an asset group associated with the Company's Consumer
segment. The asset group was expected to be sold in 2023 to an unrelated third party and is classified, at its carrying value, as
current assets held for sale and current liabilities held for sale in the consolidated balance sheet as of December 31, 2022.
In the first quarter of 2023, the third party withdrew the letter of intent to purchase the asset group held for sale. The
Company made the decision to close the Ovation credit services business. As a result, the Company recorded asset impairment
73
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
charges of $4.2 million, of which $2.1 million related to intangible assets, $1.7 million related to property and equipment, and
$0.4 million related to an operating lease right-of-use asset. Ovation was closed in mid-2023.
The following table presents information related to the major classes of assets and liabilities that were classified as held for
sale (in thousands):
Accounts receivable, net of allowance
Prepaid and other current assets
Property and equipment, net of accumulated depreciation of $1,102
Operating lease right-of-use assets
Intangible assets, net of accumulated amortization of $3,857
Other non-current assets
Total assets held for sale
Accounts payable, trade
Accrued expenses and other current liabilities
Operating lease liabilities
Total liabilities held for sale
NOTE 10—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
Accrued advertising expense
Accrued compensation and benefits
Accrued professional fees
Customer deposits and escrows
Contribution to LendingTree Foundation
Current lease liabilities
Other
Total accrued expenses and other current liabilities
December 31, 2022
$
$
$
$
1,353
79
1,665
436
2,143
13
5,689
253
2,551
105
2,909
December 31,
2023
December 31,
2022
$
27,859 $
15,091
1,101
7,732
—
7,387
11,374
70,544 $
$
37,703
11,444
1,393
7,273
500
8,513
8,269
75,095
NOTE 11—LEASES
The Company is a lessee to leases of corporate offices and certain office equipment. The majority of leases for corporate
offices include one or more options to renew, with renewal terms ranging from two to five years. These renewal options have
not been included in the calculation of right-of-use assets and lease liabilities, as the Company is not reasonably certain of the
exercise of these renewal options. The Company used its incremental borrowing rate to calculate the right-of-use asset and lease
liability for each lease.
As of December 31, 2023, right-of-use assets totaled $57.2 million and lease liabilities, the current portion of which is
included in accrued expenses and other current liabilities in the accompanying balance sheet, totaled $82.4 million. At
December 31, 2022, right-of-use assets totaled $67.1 million and lease liabilities totaled $96.7 million.
74
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Lease expense, which is included in general and administrative expense on the accompanying consolidated statements of
operations and comprehensive income (loss), consists of the following (in thousands):
Operating lease cost
Short-term lease cost
Total lease cost
Year Ended December 31,
2023
2022
2021
$
$
9,506 $
26
9,532 $
11,862 $
45
11,907 $
13,160
39
13,199
Weighted average remaining lease term and discount rate for operating leases are as follows:
Weighted average remaining lease term
Weighted average discount rate
December 31, 2023
December 31, 2022
December 31, 2021
11.6 years
5.0 %
12.1 years
5.0 %
12.3 years
5.0 %
Supplemental cash flow information related to leases is as follows (in thousands):
Net cash paid for amounts included in the measurement of lease
liabilities:
Operating cash flows from operating leases
Right-of-use assets obtained in exchange for new operating lease
liabilities
$
$
13,705 $
13,357 $
329
861 $
975 $
1,250
Year Ended December 31,
2023
2022
2021
Maturities of lease liabilities as of December 31, 2023 are as follows (in thousands):
Year ending December 31, 2024
Year ending December 31, 2025
Year ending December 31, 2026
Year ending December 31, 2027
Year ending December 31, 2028
Thereafter
Total lease payments
Less: Interest
Present value of lease liabilities
Operating Leases
11,352
9,452
9,564
7,891
7,507
65,348
111,114
28,704
82,410
$
$
75
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12—SHAREHOLDERS' EQUITY
Basic and diluted (loss) income per share was determined based on the following share data (in thousands):
Weighted average basic common shares
Effect of stock options
Effect of dilutive share awards
Weighted average diluted common shares
Year Ended December 31,
2023
2022
2021
12,941
—
—
12,941
12,793
—
—
12,793
13,199
407
89
13,695
For the year ended December 31, 2023, the Company had a loss from continuing operations and, as a result, no potentially
dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been
anti-dilutive. Accordingly, the weighted average basic shares outstanding was used to compute loss per share. An immaterial
amount of shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the
year ended December 31, 2023 because their inclusion would have been anti-dilutive. For the year ended December 31, 2023
the weighted average shares that were anti-dilutive included options to purchase 1.2 million shares of common stock and
0.5 million restricted stock units.
For the year ended December 31, 2022, the Company had a loss from continuing operations and, as a result, no potentially
dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been
anti-dilutive. Accordingly, the weighted average basic shares outstanding was used to compute loss per share. Approximately
0.2 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the
year ended December 31, 2022 because their inclusion would have been anti-dilutive. For the year ended December 31, 2022
the weighted average shares that were anti-dilutive included options to purchase 1.0 million shares of common stock and
0.4 million restricted stock units.
For the year ended December 31, 2021, the weighted average shares that were anti-dilutive, and therefore excluded from
the calculation of diluted income per share, included options to purchase 0.9 million shares of common stock and 0.1 million
restricted stock units.
The convertible notes and the warrants issued by the Company could be converted into the Company’s common stock,
subject to certain contingencies. See Note 15—Debt for additional information. On January 1, 2022, the Company adopted
ASU 2020-06 using the modified retrospective method. Following the adoption, the if-converted method is used for diluted net
income per share calculation of our convertible notes. Prior to the adoption of ASU 2020-06 the dilutive impact of the
convertible notes was calculated using the treasury stock method. See Note 2—Significant Accounting Policies for additional
information.
Approximately 1.2 million shares related to the potentially dilutive shares of the Company's common stock associated with
the 0.50% Convertible Senior Notes due July 15, 2025 were excluded from the calculation of diluted loss per share for the year
ended December 31, 2023 because their inclusion would have been anti-dilutive. Approximately 2.1 million shares related to
the potentially dilutive shares of the Company's common stock associated with the 0.50% Convertible Senior Notes due July
15, 2025 and the 0.625% Convertible Senior Notes due June 1, 2022 were excluded from the calculation of diluted loss per
share for the year ended December 31, 2022 because their inclusion would have been anti-dilutive and were excluded from
diluted income per share for the year ended December 31, 2021 since the conversion price of the Notes was greater than the
average market price of the Company's common stock during the period. Shares of the Company's stock associated with
warrants issued by the Company in 2017 and 2020 were excluded from the calculation of diluted (loss) income per share for the
years ended December 31, 2023 and 2022 because their inclusion would have been anti-dilutive and were excluded for the year
ended December 31, 2021 since the strike price of the warrants was greater than the average market price of the Company's
common stock during the relevant periods.
In 2021, the Company implemented an employee stock purchase plan, which did not have a material impact to the
calculation of diluted shares.
See Note 13—Stock-Based Compensation for a full description of outstanding equity awards.
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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Stock Repurchases
The Company has a plan authorized for the repurchase of LendingTree's common stock. The Company did not purchase
shares of its common stock during the year ended December 31, 2023. During the years ended December 31, 2022 and 2021,
the Company purchased 379,895 and 334,253 shares, respectively, of its common stock for aggregate consideration of
$43.0 million and $40.0 million, respectively. At December 31, 2023, $96.7 million remains authorized for share repurchase.
NOTE 13—STOCK-BASED COMPENSATION
The Company currently has two active plans; the LendingTree 2023 Stock Plan (the “Equity Award Plan”) and the
LendingTree 2023 Inducement Grant Plan (the "Inducement Plan"), under which future awards may be granted. The Equity
Award Plan currently covers outstanding stock options to acquire shares of the Company's common stock, restricted stock,
restricted stock with performance conditions, RSUs and RSUs with performance conditions, and provides for the future grants
of these and other equity awards. Under the Equity Award Plan and the Inducement Plan, the Company is authorized to grant
stock options, restricted stock, RSUs, and other equity-based awards for up to 1.6 million and 0.1 million, respectively, of
LendingTree shares of common stock to employees, and, under the Equity Plan only, to non-employee consultants and
directors.
The Equity Award Plan and Inducement Plan each have a stated term of ten years and provides that the exercise price of
stock options granted will not be less than the market price of the common stock on the grant date. The Equity Award Plan and
Inducement Plan do not specify grant dates or vesting schedules, as those determinations are delegated to the Compensation
Committee of the board of directors. Each grant agreement reflects the vesting schedule for that particular grant, as determined
by the Compensation Committee. The Compensation Committee has the authority to modify the vesting provisions of an award.
Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated
statements of operations and comprehensive income (loss) (in thousands):
Cost of revenue
Selling and marketing expense
General and administrative expense
Product development
Restructuring and severance
Total non-cash compensation
Year Ended December 31,
2023
2022
2021
$
396 $
1,608 $
5,267
25,180
6,333
2,506
8,282
40,233
8,418
1,083
1,639
7,480
50,989
8,447
—
$
39,682 $
59,624 $
68,555
For the years ended December 31, 2023, 2022, and 2021, the Company recognized $7.4 million, $12.0 million, and $14.1
million, respectively, of income tax benefit, including state taxes, related to non-cash compensation. Additionally, for the year
ended December 31, 2023 and 2022, the Company recognized excess tax expense of $7.8 million and $5.1 million,
respectively, and for the year ended December 31, 2021, the Company recognized excess tax benefit of $11.7 million, including
state taxes, in income tax expense. See Note 2—Significant Accounting Policies, for additional information regarding excess
tax benefits and deficiencies.
77
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Stock Options
A summary of changes in outstanding stock options is as follows:
Number of
Options
Weighted
Average
Exercise
Price
(per option)
Weighted
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value(a)
(in thousands)
Outstanding at December 31, 2022
805,079 $
155.10
Granted
Exercised
Forfeited
Expired
Outstanding at December 31, 2023
Options exercisable
—
—
(17,746)
(52,558)
734,775 $
601,405 $
—
—
115.79
229.34
150.74
135.43
3.72 $
2.91 $
1,111
1,111
(a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing
stock price of $30.32 on the last trading day of 2023 and the exercise price, multiplied by the number of shares
covered by in-the-money options) that would have been received by the option holder had the option holder exercised
these options on December 31, 2023. The intrinsic value changes based on the market value of the Company's
common stock.
As of December 31, 2023, there was approximately $8.6 million of unrecognized compensation cost related to stock
options. These costs are expected to be recognized over a weighted-average period of approximately 1.9 years.
Upon exercise, the intrinsic value represents the pre-tax difference between the Company's closing stock price on the
exercise date and the exercise price, multiplied by the number of stock options exercised. During the years ended December 31,
2023 and 2022, there were no stock options exercised. During the year ended December 31, 2021, the total intrinsic value of
stock options that were exercised was $51.4 million. As there were no options exercised for the year ended December 31,
2023, no cash was received from stock option exercises.
During the year ended December 31, 2023, there were no stock options granted. During the years ended December 31,
2022 and 2021, the Company granted stock options with a weighted average grant date fair value per share of $53.21 and
$128.86, respectively, of which the vesting periods include (a) immediately upon grant, (b) earlier of one year from grant date
and the Company's annual meeting of stockholders for 2023, (c) 33% over a period of three years from the grant date, (d) 25%
over a period of four years from the grant date, and (e) certain grants to executive officers that vest over periods of up to six
years.
For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the
stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions.
The weighted average assumptions used are as follows:
Expected term (1)
Expected dividend (2)
Expected volatility (3)
Risk-free interest rate (4)
Year Ended December 31,
2023
2022
2021
—
—
—
—
5.00 - 6.00 years
5.00 - 6.00 years
—
—
53%- 56%
53% - 59%
1.62%- 3.23%
0.59% - 1.15%
(1) The expected term of stock options granted was calculated using the 'Simplified Method', which utilizes the midpoint
between the weighted average time of vesting and the end of the contractual term. This method was utilized for the
stock options due to a lack of historical exercise behavior by the Company's employees.
(2) For all stock options granted during the years ended December 31, 2022 and 2021, no dividends are expected to be
paid over the contractual term of the stock options, resulting in a zero expected dividend rate.
(3) The expected volatility rate is based on the historical volatility of the Company's common stock.
78
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for
notes with comparable expected terms as the awards, in effect at the grant date.
During the years ended December 31, 2023, 2022 and 2021, the total grant date fair value of options vested was $11.9
million, $9.2 million and $10.8 million, respectively.
Stock Options with Market Conditions
A summary of changes in outstanding stock options with market conditions at target is as follows:
Outstanding at December 31, 2022
Granted
Exercised
Forfeited
Expired
Outstanding at December 31, 2023
Options exercisable
Number of
Options with
Market
Conditions
Weighted
Average
Exercise
Price
(per option)
734,685 $
230.79
—
—
—
(16,247)
718,438 $
481,669 $
—
—
—
308.96
229.02
195.10
Weighted
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value(a)
(in thousands)
4.67 $
3.60 $
—
—
(a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing
stock price of $30.32 on the last trading day of 2023 and the exercise price, multiplied by the number of shares
covered by in-the-money options) that would have been received by the option holder had the option holder exercised
these options on December 31, 2023. The intrinsic value changes based on the market value of the Company's
common stock.
As of December 31, 2023, there was approximately $11.6 million of unrecognized compensation cost related to stock
options with market conditions. These costs are expected to be recognized over a weighted-average period of approximately
1.9 years. For single cliff-vesting stock options with market conditions, the fair value will be recognized on a straight-line basis
through each grant’s vest date, whether or not any of the total shareholder return targets are met. For graded-vesting stock
options with market conditions, the fair value will be recognized using graded vesting expense attribution, whether or not any
of the total shareholder return targets are met.
No stock options with market conditions were granted in 2021, 2022 or 2023. During the year ended December 31, 2020,
the Company granted stock options with a weighted-average grant date fair value per share of $142.54. The single cliff-vesting
stock options granted during the year ended December 31, 2020 have a vest date of March 31, 2024. The graded-vesting stock
options granted during the year ended December 31, 2020 have a vesting schedule with vesting dates of December 31, 2024,
December 31, 2025 and December 31, 2026.
In December 2020, the Company granted graded-vesting stock options with a market condition to its Chairman and Chief
Executive Officer at a premium exercise price of $300, representing an approximate 25% premium over the closing market
price of LendingTree's common stock on the date of grant. The net after-tax shares acquired through exercise of these stock
options are subject to a two-year post-exercise holding requirement.
The single cliff-vesting stock options with a market condition granted in 2020 have a target number of shares that vest
upon achieving a targeted total shareholder return performance of 81% stock price appreciation and a maximum of 31,940
shares for achieving superior performance. No shares will vest unless 41% of the targeted performance is achieved. The
performance measurement period ends on March 31, 2024. The graded-vesting stock options with a market condition granted in
2020 have a target number of shares that vest upon achieving a targeted total shareholder return performance of 135% stock
price appreciation and a maximum of 363,464 shares for achieving superior performance. No shares will vest unless 81% of the
targeted performance is achieved. The performance measurement period ends on March 31, 2025.
The performance measurement period for stock options with a market condition granted in 2019 ended on March 31, 2023.
The grant had a target number of shares of 16,247 that would vest upon achieving a targeted total shareholder return
performance of 81% stock price appreciation and a maximum of 27,132 shares for achieving superior performance. No shares
will vest unless 41% of the targeted performance is achieved. At March 31, 2023, the target number of shares expired due to the
79
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
actual total shareholder return performance not meeting the 41% of the targeted performance measure, as reflected in the table
above.
For all stock options with market conditions, time-based service vesting conditions would also have to be satisfied in order
for shares to become fully vested and no longer subject to forfeiture.
As of December 31, 2023, a maximum of 395,404 may be earned for achieving superior performance up to 167% of the
remaining unvested target number of shares. As of December 31, 2023, no additional performance-based nonqualified stock
options with a market condition had been earned.
Restricted Stock Units
A summary of changes in outstanding nonvested RSUs is as follows:
Nonvested at December 31, 2022
Granted (a)
Vested
Forfeited
Nonvested at December 31, 2023
Number of Units
RSUs
Weighted Average
Grant Date
Fair Value
(per unit)
485,053 $
391,953
(244,580)
(160,833)
471,593 $
127.46
31.69
129.30
70.13
66.42
(a) The grant date fair value per share of the RSUs is calculated as the closing market price of LendingTree's common
stock at the time of grant.
As of December 31, 2023, there was approximately $16.5 million of unrecognized compensation cost related to RSUs.
These costs are expected to be recognized over a weighted-average period of approximately 1.6 years.
The total fair value of RSUs that vested during the years ended December 31, 2023, 2022, and 2021 was $6.9 million,
$11.5 million and $21.7 million, respectively.
Restricted Stock Units with Performance Conditions
A summary of changes in outstanding nonvested RSUs with performance conditions is as follows:
Nonvested at December 31, 2022
Granted
Vested
Forfeited
Nonvested at December 31, 2023
RSUs with Performance Conditions
Number of Units
Weighted Average
Grant Date
Fair Value
(per unit)
16,000 $
—
—
(16,000)
— $
83.25
—
—
83.25
—
No RSUs with performance conditions were granted in 2023 or 2021.
As of December 31, 2023, there was no unrecognized compensation cost related to RSUs with performance conditions.
The total fair value of RSUs with performance conditions that vested during the year ended December 31, 2021 was $0.9
million.
80
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Restricted Stock Awards with Performance Conditions
No RSAs with performance conditions were granted in 2023, 2022, or 2021. During 2018, the Company granted time-
vested RSAs with a performance condition to its Chairman and Chief Executive Officer, which vested through December 31,
2021. The terms of this award were fixed in compensation agreements in July 2017 with a total grant date fair value of $21.9
million. The performance condition was tied to the Company's operating results during the first six months of 2018, and was
met.
The total fair value of RSAs with performance conditions that vested during the year ended December 31, 2021 was $4.1
million.
Restricted Stock Awards with Market Conditions
No RSAs with market conditions were granted in 2023, 2022 or 2021. During 2018, the Company granted RSAs with
market conditions to its Chairman and Chief Executive Officer with a total grant date fair value of $1.9 million. The
performance measurement period ended on September 30, 2022, and 29,601 shares were earned.
The total fair value of RSAs with market conditions that vested during the year ended December 31, 2022 was $0.7
million. As of December 31, 2023, there was no unrecognized compensation cost related to RSAs with market conditions.
Employee Stock Purchase Plan
During 2021, the Company implemented an employee stock purchase plan (“ESPP”), under which a total of 262,731 shares
of the Company's common stock were reserved for issuance. The ESPP is a tax-qualified plan under Section 423 of the Internal
Revenue Code. Under the terms of the ESPP, eligible employees are granted options to purchase shares of the Company's
common stock at 85% of the lesser of (1) the fair market value at time of grant or (2) the fair market value at time of exercise.
The offering periods and purchase periods are typically 6-month periods ending on June 30 and December 31 of each year.
During the year ended December 31, 2023, 64,549 shares were purchased under the ESPP at a weighted average purchase
price of $19.03 per share, resulting in cash proceeds of $1.2 million. During the year ended December 31, 2022, 30,375 shares
were purchased under the ESPP at a weighted average purchase price of $27.19 per share, resulting in cash proceeds of
$0.8 million. As of December 31, 2023 and 2022, 162,264 and 226,813 shares, respectively, were available for issuance under
the ESPP.
For the years ended December 31, 2023 and 2022, the Company granted Employee Stock Purchase Rights to certain
employees with a weighted average grant date fair value per share of $8.51 and $20.96 respectively, calculated using the Black-
Scholes option pricing model. For purposes of determining stock-based compensation expense, the grant date fair value per
share estimated using the Black-Scholes option pricing model required the use of the following key assumptions:
Expected term (1)
Expected dividend (2)
Expected volatility (3)
Risk-free interest rate (4)
Year Ended December 31,
2023
0.50 years
—
82%
2022
0.50 years
—
49% - 73%
4.76% - 5.50%
0.19% - 2.51%
(1) The expected term was calculated using the time period between the grant date and the purchase date.
(2) No dividends are expected to be paid, resulting in a zero expected dividend rate.
(3) The expected volatility rate is based on the historical volatility of the Company's common stock.
(4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for
notes with comparable expected terms as the Employee Stock Purchase Rights, in effect at the grant date.
81
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14—INCOME TAXES
Income Tax Provision
The components of the income tax expense (benefit) are as follows (in thousands):
Current income tax expense:
Federal
State
Current income tax expense
Deferred income tax (benefit) expense:
Federal
State
Deferred income tax (benefit) expense
Income tax (benefit) expense
Year Ended December 31,
2023
2022
2021
$
1,155 $
— $
1,022
2,177
353
353
(3,383)
(1,309)
98,772
33,894
(4,692)
132,666
128
262
390
9,912
996
10,908
$
(2,515) $ 133,019 $
11,298
A reconciliation of the income tax expense (benefit) to the amounts computed by applying the statutory federal income tax
rate to income (loss) from continuing operations before income taxes is shown as follows (in thousands):
Federal statutory income tax
State income taxes, net
Excess tax deductions on non-cash compensation
Research and experimentation tax credit
Nondeductible executive compensation
Increase (decrease) in valuation allowance
Other, net
Income tax (benefit) expense
Year Ended December 31,
2023
2022
2021
$
(26,233) $
(11,538) $
17,731
(2,215)
6,373
(1,512)
2,174
17,087
1,811
365
4,117
(2,906)
2,692
139,374
915
1,269
(9,401)
(3,207)
3,058
595
1,253
$
(2,515) $ 133,019 $
11,298
82
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred Income Taxes
The tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and
deferred tax liabilities are as follows (in thousands):
Deferred tax assets:
Provision for accrued expenses
Leasing
Net operating loss carryforwards (a)
Capitalized research and experimentation
Non-cash compensation expense
Intangible assets
Interest
Equity Investment
Tax credits
Other
Total gross deferred tax assets
Less: valuation allowance (b)
Total deferred tax assets, net of the valuation allowance
Deferred tax liabilities:
Leasing
Property and equipment
Equity investment
Other
Total gross deferred tax liabilities
Net deferred taxes
December 31,
2023
2022
$
1,168 $
21,263
47,463
30,396
28,126
11,379
21,295
4,561
15,385
95
181,131
3,257
25,213
59,302
17,843
30,451
10,240
30,054
—
16,174
104
192,638
(162,504)
(145,401)
18,627
47,237
(18,329)
(1,563)
—
(826)
(20,718)
$
(2,091) $
(21,445)
(6,227)
(25,756)
(592)
(54,020)
(6,783)
(a) At December 31, 2023, the Company had pre-tax consolidated federal net operating losses (“NOLs”) of
$139.0 million. The federal NOLs no longer expire under the Tax Cuts and Jobs Act. The Company's NOLs will be
available to offset taxable income, subject to the Internal Revenue Code Section 382 annual limitation. In addition, the
Company has state NOLs of approximately $466.4 million at December 31, 2023, a portion of which will expire at
various times between 2024 and 2043.
(b) The valuation allowance is related to items for which it is “more likely than not” that the tax benefit will not be
realized.
Deferred income taxes are presented in the accompanying consolidated balance sheets as follows (in thousands):
Deferred income tax assets
Deferred income tax liabilities
Net deferred taxes
Valuation Allowance
December 31,
2023
2022
$
$
— $
(2,091)
(2,091) $
—
(6,783)
(6,783)
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. As of each reporting date, management considers both positive and negative evidence
regarding the likelihood of future realization of the deferred tax assets.
83
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During 2023, the Company continued to maintain a full valuation allowance against its net deferred tax assets due to
historical cumulative pre-tax losses and continued pre-tax losses. Management regularly reviews the 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. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income. In determining the amount of the valuation allowance, the Company considered
the scheduled reversal of deferred tax liabilities. The Company 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. 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. At December 31, 2023 and 2022, the Company recorded a full valuation allowance of $162.5 million and $145.4
million, respectively.
A reconciliation of the beginning and ending balances of the deferred tax valuation allowance is as follows (in thousands):
Balance, beginning of the period
Charges to earnings
Balance, end of the period
Unrecognized Tax Benefits
Year Ended December 31,
2023
2022
2021
$ 145,401 $
6,039 $
5,802
17,103
139,362
237
$ 162,504 $ 145,401 $
6,039
A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as
follows (in thousands):
Balance, beginning of the period
Additions based on tax positions of the current period
Additions (subtractions) based on tax positions of the prior period
Balance, end of the period
Year Ended December 31,
2023
2022
$
$
3,282 $
2,914
227
(85)
405
(37)
3,424 $
3,282
Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense. Interest
and penalties on unrecognized tax benefits included in income tax expense of an immaterial amount has been recognized for the
tax year ended December 31, 2022. For the years ended December 31, 2023 and 2021 interest is not currently required to be
recorded, as there have been no tax attributes included in income tax returns filed for those tax periods to require consideration
of interest expense.
As of December 31, 2023 and 2022, the accrual for unrecognized tax benefits, including interest, was $3.4 million and
$3.3 million, respectively, which would benefit the effective tax rate if recognized.
Tax Audits
LendingTree is subject to audits by federal, state and local authorities in the area of income tax. These audits include
questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income
taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns;
however, any amounts paid upon resolution of issues raised may differ from the amount provided. Differences between the
reserves for tax contingencies and the amounts owed by the Company are recorded in the period they become known. As of
December 31, 2023, the Company is subject to a federal income tax examination for the tax years 2015 through 2022. In
addition, the Company is subject to state and local tax examinations for the tax years 2018 through 2022.
84
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15—DEBT
Convertible Senior Notes
2025 Notes
On July 24, 2020, the Company issued $575.0 million aggregate principal amount of its 0.50% Convertible Senior Notes
due July 15, 2025 (the “2025 Notes”) in a private placement. The issuance included $75.0 million aggregate principal amount
of 2025 Notes under a 13-day purchase option which was exercised in full. The 2025 Notes bear interest at a rate of 0.50% per
year, payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2021. The 2025 Notes will
mature on July 15, 2025, unless earlier repurchased, redeemed or converted.
On March 8, 2023, the Company repurchased approximately $190.6 million in principal amount of its 2025 Notes, through
individual privately-negotiated transactions with certain holders of the 2025 Notes, for $156.3 million in cash plus accrued and
unpaid interest of approximately $0.1 million. On December 7, 2023, the Company repurchased approximately $100.2 million
in principal amount of its 2025 Notes, through individual privately-negotiated transactions with certain holders of the 2025
Notes, for $81.2 million in cash plus accrued and unpaid interest of approximately $0.2 million. During the year ended
December 31, 2023, the Company 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 statements of operations and comprehensive income.
The initial conversion rate of the 2025 Notes is 2.1683 shares of the Company's common stock per $1,000 principal amount
of 2025 Notes (which is equivalent to an initial conversion price of approximately $461.19 per share). The conversion rate is
subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In
addition, upon the occurrence of a make-whole fundamental change prior to the maturity of the 2025 Notes or if the Company
issues a notice of redemption for the 2025 Notes, the Company will, in certain circumstances, increase the conversion rate by a
specified number of additional shares for a holder that elects to convert the 2025 Notes in connection with such make-whole
fundamental change or to convert its 2025 Notes called for redemption, as the case may be. Upon conversion, the 2025 Notes
will settle for cash, shares of the Company’s stock, or a combination thereof, at the Company’s option. It is the intent of the
Company to settle the principal amount of the 2025 Notes in cash and any conversion premium in shares of its common stock.
The 2025 Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the
Company’s indebtedness that is expressly subordinated in right of payment to the 2025 Notes; equal in right of payment to any
of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the
Company’s secured indebtedness, including borrowings under the senior secured credit facility, described below, to the extent
of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including
trade payables) of the Company’s subsidiaries.
Prior to the close of business on the business day immediately preceding March 13, 2025, the 2025 Notes will be
convertible at the option of the holders thereof only under the following circumstances:
•
•
•
•
during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during
such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not
consecutive) during the 30 consecutive trading day period ending on, and including the last trading day of the
immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable
trading day;
during the five business day period after any five consecutive trading day period in which, for each trading day of that
period, the trading price (as defined in the 2025 Notes) per $1,000 principal amount of 2025 Notes for such trading day
was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each
such trading day;
if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the scheduled
trading day immediately preceding the redemption date, but only with respect to the notes called for redemption; or
upon the occurrence of specified corporate events including but not limited to a fundamental change.
Holders of the 2025 Notes were not entitled to convert the 2025 Notes during the calendar quarter ended December 31,
2023 as the last reported sale price of the Company's common stock, for at least 20 trading days (whether or not consecutive)
during the period of 30 consecutive trading days ending on September 30, 2023, was not greater than or equal to 130% of the
conversion price of the 2025 Notes on each applicable trading day. Holders of the 2025 Notes are not entitled to convert the
85
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2025 Notes during the calendar quarter ended March 31, 2024 as the last reported sale price of the Company's common stock,
for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on December
31, 2023, was not greater than or equal to 130% of the conversion price of the 2025 Notes on each applicable trading day.
On or after March 13, 2025, until the close of business on the second scheduled trading day immediately preceding the
maturity date of the 2025 Notes, holders of the 2025 Notes may convert all or a portion of their 2025 Notes regardless of the
foregoing conditions.
The Company could not redeem the remaining 2025 Notes prior to July 20, 2023. On or after July 20, 2023 and before the
41st scheduled trading day immediately before the maturity date, the Company may redeem for cash all or a portion of the 2025
Notes, at its option, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive)
during the 30 consecutive trading day period (and including the last trading day of such period) ending on, and including the
last trading day immediately preceding the date of notice of redemption is greater than or equal to 130% of the conversion price
on each applicable trading day. The redemption price will be equal to 100% of the principal amount of the 2025 Notes to be
redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025
Notes.
Upon the occurrence of a fundamental change prior to the maturity date of the 2025 Notes, holders of the 2025 Notes may
require the Company to repurchase all or a portion of the 2025 Notes for cash at a price equal to 100% of the principal amount
of the 2025 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase
date.
If the market price per share of the common stock, as measured under the terms of the 2025 Notes, exceeds the conversion
price of the 2025 Notes, the 2025 Notes could have a dilutive effect, unless the Company elects, subject to certain conditions, to
settle the principal amount of the 2025 Notes and any conversion premium in cash.
Accounting for the Notes After Adoption of ASU 2020-06
The Company adopted ASU 2020-06 on January 1, 2022 as further described in Note 2—Significant Accounting Policies
in the notes to the consolidated financial statements included elsewhere in this report. Following the adoption of ASU 2020-06,
the 2025 Notes are recorded as a single unit within liabilities on the consolidated balance sheets as the conversion features
within the 2025 Notes are not derivatives that require bifurcation and the 2025 Notes do not involve a substantial premium.
Debt issuance costs to issue the 2025 Notes were recorded as a direct deduction from the related liability and amortized to
interest expense over the term of Notes. The new guidance also requires the if-converted method to be applied for all
convertible instruments when calculating diluted earnings per share. See Note 2—Significant Accounting Policies in the notes
to the consolidated financial statements included elsewhere in this report for additional information.
Accounting for the Notes Before Adoption of ASU 2020-06
The initial measurement of convertible debt instruments that may be settled in cash was separated into a debt and an equity
component whereby the debt component was based on the fair value of a similar instrument that does not contain an equity
conversion option. The separate components of debt and equity of the Company’s 2025 Notes were determined using an
interest rate of 5.30%, which reflects the nonconvertible debt borrowing rate of the Company at the date of issuance. As a
result, the initial components of debt and equity were $455.6 million and $119.4 million, respectively. Financing costs related
to the issuance of the 2025 Notes were approximately $15.1 million, of which $12.0 million were allocated to the liability
component and were being amortized to interest expense over the term of the debt and $3.1 million were allocated to the equity
component.
During 2023, the Company recorded interest expense on the 2025 Notes of $4.3 million which consisted of $2.1 million
associated with the 0.50% coupon rate and $2.2 million associated with the amortization of the debt issuance costs. During
2022, the Company recorded interest expense on the 2025 Notes of $5.9 million which consisted of $2.9 million associated with
the 0.50% coupon rate and $3.0 million associated with the amortization of the debt issuance costs. During 2021, the Company
recorded interest expense on the 2025 Notes of $27.2 million which consisted of $2.9 million associated with the 0.50% coupon
rate, $22.1 million associated with the accretion of the debt discount, and $2.2 million associated with the amortization of the
debt issuance costs. The debt discount was being amortized over the term of the debt prior to the adoption of ASU 2020-06.
As of December 31, 2023, the fair value of the 2025 Notes is estimated to be approximately $235.2 million using the Level
1 observable input of the last quoted market price on December 31, 2023.
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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the gross carrying amount, debt issuance costs, and net carrying value of the liability component of the 2025
Notes, all of which is recorded as a non-current liability in the December 31, 2023 consolidated balance sheet, are as follows (in
thousands):
Gross carrying amount
Debt issuance costs
Net carrying amount
2022 Notes
December 31,
2023
December 31,
2022
$
$
284,188 $
575,000
2,321
7,734
281,867 $
567,266
On May 31, 2017, the Company issued $300.0 million aggregate principal amount of its 0.625% Convertible Senior Notes
due June 1, 2022 (the “2022 Notes”) in a private placement. The Company settled the outstanding balance of the 2022 Notes of
$169.7 million in cash on June 1, 2022. The initial conversion rate of the 2022 Notes was 4.8163 shares of the Company's
common stock per $1,000 principal amount of 2022 Notes (which is equivalent to an initial conversion price of approximately
$207.63 per share).
Accounting for the Notes After Adoption of ASU 2020-06
The Company adopted ASU 2020-06 on January 1, 2022 as further described in Note 2—Significant Accounting Policies
in the notes to the consolidated financial statements included elsewhere in this report. Following the adoption of ASU 2020-06,
the 2022 Notes are recorded as a single unit within liabilities on the consolidated balance sheets as the conversion features
within the 2022 Notes are not derivatives that require bifurcation and the 2022 Notes do not involve a substantial premium.
Debt issuance costs to issue the 2022 Notes were recorded as a direct deduction from the related liability and amortized to
interest expense over the term of Notes. The new guidance also requires the if-converted method to be applied for all
convertible instruments when calculating diluted earnings per share. See Note 2—Significant Accounting Policies in the notes
to the consolidated financial statements included elsewhere in this report for additional information.
Accounting for the Notes Before Adoption of ASU 2020-06
The separate components of debt and equity of the Company’s 2022 Notes were determined using an interest rate of
5.36%, which reflects the nonconvertible debt borrowing rate of the Company at the date of issuance. As a result, the initial
components of debt and equity were $238.4 million and $61.6 million, respectively. Financing costs related to the issuance of
the 2022 Notes were approximately $9.3 million, of which $7.4 million were allocated to the liability component and were
being amortized to interest expense over the term of the debt and $1.9 million were allocated to the equity component.
On July 24, 2020, the Company used approximately $234.0 million of the net proceeds from the issuance of the 2025 Notes
to repurchase approximately $130.3 million principal amount of the 2022 Notes, including the payment of accrued and unpaid
interest of approximately $0.1 million, through separate transactions with certain holders of the 2022 Notes. Of the
consideration paid, $126.0 million was allocated to the extinguishment of the liability component of the notes, while the
remaining $107.9 million was allocated to the reacquisition of the equity component and recorded as a reduction to additional
paid-in capital in the consolidated statement of shareholders’ equity. The Company recognized a loss on debt extinguishment of
$7.8 million in the third quarter of 2020.
During 2022, the Company recorded interest expense on the 2022 Notes of $0.8 million which consisted of $0.4 million
associated with the 0.625% coupon rate and $0.4 million associated with the amortization of the debt issuance costs. During
2021, the Company recorded interest expense on the 2022 Notes of $9.5 million which consisted of $1.1 million associated with
the 0.625% coupon rate, $7.5 million associated with the accretion of the debt discount, and $0.9 million associated with the
amortization of the debt issuance costs.
Convertible Note Hedge and Warrant Transactions
2020 Hedge and Warrants
On July 24, 2020, in connection with the issuance of the 2025 Notes, the Company entered into Convertible Note Hedge
(the “2020 Hedge”) and warrant transactions with respect to the Company’s common stock. The Company used approximately
$63.0 million of the net proceeds from the 2025 Notes to pay for the cost of the 2020 Hedge, after such cost was partially offset
by the proceeds from the warrant transactions.
On July 24, 2020, the Company paid $124.2 million to the counterparties for the 2020 Hedge transactions. The 2020 Hedge
transactions cover 1.2 million shares of the Company’s common stock, the same number of shares initially underlying the 2025
87
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Notes, and are exercisable upon any conversion of the 2025 Notes. The 2020 Hedge transactions are expected generally to
reduce the potential dilution to the Company's common stock upon conversion of the 2025 Notes and/or offset any cash
payments the Company is required to make in excess of the principal amount of the converted 2025 Notes, as the case may be,
in the event that the market price per share of common stock, as measured under the terms of the 2020 Hedge transactions, is
greater than the strike price of the 2020 Hedge transactions, which initially corresponds to the initial conversion price of the
2025 Notes, or approximately $461.19 per share of common stock. The 2020 Hedge transactions will expire upon the maturity
of the Notes.
On July 24, 2020, the Company sold to the counterparties warrants (the “2020 Warrants”) to acquire 1.2 million shares of
the Company's common stock at an initial strike price of $709.52 per share, which represents a premium of 100% over the last
reported sale price of the common stock of $354.76 on July 21, 2020. On July 24, 2020, the Company received aggregate
proceeds of approximately $61.2 million from the sale of the 2020 Warrants. If the market price per share of the common stock,
as measured under the terms of the 2020 Warrants, exceeds the strike price of the 2020 Warrants, the 2020 Warrants could have
a dilutive effect, unless the Company elects, subject to certain conditions, to settle the 2020 Warrants in cash.
In connection with the December 7, 2023 and the March 8, 2023 repurchases of the 2025 Notes noted above, the Company
entered into agreements with the counterparties for the 2020 Hedge and 2020 Warrants transactions to terminate a portion of
these call spread transactions effective December 7, 2023 and March 8, 2023, respectively, in notional amounts corresponding
to the principal amount of the 2025 Notes repurchased. Subsequent to such terminations, the outstanding portion of the 2020
Hedge covers 0.6 million shares of the Company's common stock and the 2020 Warrants to acquire 0.6 million shares of the
Company's common stock remain outstanding.
The 2020 Hedge and 2020 Warrants transactions are indexed to, and potentially settled in, the Company's common stock
and the net cost of $63.0 million has been recorded as a reduction to additional paid-in capital in the consolidated statement of
shareholders’ equity.
2017 Hedge and Warrants
On May 31, 2017, in connection with the issuance of the 2022 Notes, the Company entered into Convertible Note Hedge
(the “2017 Hedge”) and warrant transactions with respect to the Company’s common stock. The Company used approximately
$18.1 million of the net proceeds from the 2022 Notes to pay for the cost of the 2017 Hedge, after such cost was partially offset
by the proceeds from the warrant transactions.
On May 31, 2017, the Company paid $61.5 million to the counterparties for the 2017 Hedge transactions. The 2017 Hedge
transactions initially covered 1.4 million shares of the Company’s common stock, the same number of shares initially
underlying the 2022 Notes, and were exercisable upon any conversion of the 2022 Notes. The 2017 Hedge transactions expired
on June 1, 2022 upon the maturity of the Notes.
On May 31, 2017, the Company sold to the counterparties, warrants (the “2017 Warrants”) to acquire 1.4 million shares of
the Company's common stock at an initial strike price of $266.39 per share, which represented a premium of 70% over the last
reported sale price of the common stock of $156.70 on May 24, 2017 receiving proceeds of approximately $43.4 million. The
warrants expired on December 12, 2022.
Credit Facility
On September 15, 2021, the Company entered into a credit agreement (the “Credit Agreement”), consisting of a $200.0
million revolving credit facility (the “Revolving Facility”), which matures on September 15, 2026, and a $250.0 million
delayed draw term loan facility (the “Term Loan Facility” 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. On May 31, 2022 the Company
received proceeds of $250.0 million from the Term Loan Facility and, on June 1, 2022, 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 not prohibited by the Credit Agreement. The Credit Facility replaces the Company's $500.0 million five-
year senior secured revolving credit facility (the “Amended Revolving Credit Facility”) which was entered into on December
10, 2019. As of December 31, 2023, the Company had $246.9 million borrowings outstanding under the Term Loan Facility
bearing interest at the SOFR option rate of 9.21% and had no borrowings under the Revolving Facility. As of December 31,
2022, the Company had $248.8 million borrowings outstanding under the Term Loan Facility and had no borrowings under the
Revolving Facility. As of December 31, 2023, borrowings of $3.1 million under the Term Loan Facility are recorded as current
portion of long-term debt on the consolidated balance sheet.
88
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The full amount of the Revolving Facility will be available on a same-day basis, with respect to base rate loans and upon
advance notice with respect to SOFR rate loans, subject to customary terms and conditions. Under certain conditions, the
Company will be permitted to add one or more term loans and/or increase revolving or term loan commitments under the Credit
Facility by an amount set at the greater of $116.0 million and 100% of consolidated EBITDA (subject to adjustments for certain
prepayments), plus an unlimited amount provided that the first lien net leverage ratio does not exceed 3.00 to 1.00.
Additionally, up to $20.0 million of the Revolving Facility will be available for the issuance of letters of credit. At each of
December 31, 2023 and December 31, 2022, the Company had outstanding one letter of credit issued in the amount of $0.2
million.
The Company’s borrowings under the Credit Facility bear interest at annual rates that, at the Company’s option, will be
either:
•
•
a base rate generally defined as the sum of (i) the greater of (a) the prime rate of Truist Bank, (b) the federal funds
effective rate plus 0.5% and (c) the Benchmark rate (defined below) on a daily basis applicable for an interest period of
one month plus 1.0% and (ii) an applicable percentage of 1.25% to 1.75% for loans under the Revolving Facility and
2.75% to 3.00% for loans under the Term Loan Facility, in each case, based on a first lien net leverage ratio; or
a Benchmark rate generally defined as the sum of (i) (a) Term SOFR and (b) the related Benchmark replacement
adjustment and (ii) an applicable percentage of 2.25% to 2.75% for loans under the Revolving Facility and 3.75% and
4.00% for loans under the Term Loan Facility, in each case, based on a first lien net leverage ratio.
Interest on the Company’s borrowings is payable quarterly in arrears for base rate loans and on the last day of each interest
rate period (but not less often than three months) for SOFR rate loans.
The Credit Facility contains a restrictive financial covenant, which is set at a first lien net leverage ratio of 2.50 to 1.00,
except that this may increase by 0.50:1.00 for the four fiscal quarters following a material acquisition. The financial covenant
will be tested only if the loans and certain other obligations under the Revolving Facility exceed $20.0 million as of the last date
of any fiscal quarter (starting with the fiscal quarter ending on December 31, 2021). In addition, the Credit Facility contains
mandatory prepayment events, affirmative and negative covenants and events of default customary for a transaction of this type.
The covenants, among other things, restrict additional indebtedness, liens, mergers or certain fundamental changes, asset
dispositions, dividends and other restricted payments, transactions with affiliates, loans and investments and other matters
customarily restricted in credit agreements of this type. The Company is required to make mandatory prepayments of the
outstanding principal amount of loans under the Term Loan Facility with the net cash proceeds from certain disposition of
assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not
reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of
certain indebtedness. The Company has the right to prepay its term loans under the Credit Agreement, in whole or in part, at
any time without premium or penalty, subject to certain limitations and a 1.0% soft call premium applicable during the first six
months following the closing date.
The Company was in compliance with all covenants at December 31, 2023.
The Credit Facility requires the Company and certain of its subsidiaries to pledge as collateral, subject to certain customary
exclusions, substantially all of its assets, including 100% of the equity in certain domestic subsidiaries and 65% of the voting
equity, and 100% of the non-voting equity, in certain foreign subsidiaries. The obligations under the Credit Facility are
unconditionally guaranteed on a senior basis by the Company's material domestic subsidiaries, which guaranties are secured by
the collateral.
With respect to the Revolving Facility, the Company is required to pay an unused commitment fee quarterly in arrears on
the difference between committed amounts and amounts actually borrowed under the Revolving Facility equal to an applicable
percentage of 0.25% to 0.50% per annum based on a first lien net leverage ratio. The Company is required to pay a letter of
credit participation fee and a letter of credit fronting fee quarterly in arrears. The letter of credit participation fee is based upon
the aggregate face amount of outstanding letters of credit at an applicable percentage of 2.25% to 2.75% based on a first lien net
leverage ratio. The letter of credit fronting fee is 0.125% per annum on the face amount of each letter of credit.
With respect to the Term Loan Facility, the Company is required to pay an unused commitment fee quarterly in arrears on
the difference between committed amounts and amounts actually borrowed under the Term Loan Facility equal to an applicable
SOFR rate plus an applicable percentage of 3.75% to 4.00% per annum based on a first lien net leverage ratio.
The Company recognized $1.1 million in additional interest expense in the third quarter of 2021 due to the write-off of
certain unamortized debt issuance costs associated with the Amended Revolving Credit Facility. In addition to the remaining
unamortized debt issuance costs associated with the Amended Revolving Credit Facility, debt issuance costs of $2.8 million
89
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
related to the Revolving Facility are being amortized to interest expense over the life of the Revolving Facility. Debt issuance
costs of $3.5 million related to the Term Loan Facility and the original issue discount $2.5 million paid on the undrawn term
loan facility were amortized to interest expense over the delayed draw access period. These deferred costs are included in
prepaid and other current assets and other non-current assets in the Company's consolidated balance sheet.
During 2023, the Company recorded interest expense related to its Revolving Facility of $1.5 million which consisted of
$0.6 million in unused commitment fees and $0.9 million associated with the amortization of the debt issuance costs. During
2023, the Company recorded interest expense related to the Term Loan Facility of $22.2 million associated with borrowings
bearing interest at the LIBO rate during the first six months of 2023 and the SOFR option rate during the last six months of
2023.
During 2022, the Company recorded interest expense related to its Revolving Facility of $1.5 million which consisted of
$0.6 million in unused commitment fees and $0.9 million associated with the amortization of the debt issuance costs. During
2022, the Company recorded interest expense related to the Term Loan Facility of $18.2 million which consisted of $9.6
million associated with borrowings bearing interest at the LIBO rate, $5.1 million in unused commitment fees, $2.0 million
associated with the amortization of the debt issuance costs, and $1.5 million associated with the amortization of the original
issue discount. During 2021, the Company recorded interest expense related to its revolving facilities of $3.4 million which
consisted of $2.0 million in unused commitment fees and $1.4 million associated with the amortization of the debt issuance
costs.
NOTE 16—COMMITMENTS
Bonds
The Company has funding commitments that could potentially require performance in the event of demands by third
parties or contingent events, as follows (in thousands):
Commitments Due By Period
Total
Less Than
1 year
1-3 years
3-5 years
More Than
5 years
Surety bonds (a)
$
3,803 $
3,803 $
— $
— $
—
(a) State laws and regulations generally require businesses which engage in mortgage brokering activity to maintain a
mortgage broker or similar license. Mortgage brokering activity is generally defined to include, among other things,
receiving valuable consideration for offering assistance to a buyer in obtaining a residential mortgage or soliciting
financial and mortgage information from the public and providing that information to an originator of residential
mortgage loans. The Company maintains surety bonds in all states requiring them in the event of a claim.
NOTE 17—CONTINGENCIES
Overview
LendingTree is involved in legal proceedings on an ongoing basis. In assessing the materiality of a legal proceeding, the
Company evaluates, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-
monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require it to change its business practices in a manner
that could have a material and adverse impact on the Company's business. With respect to the matters disclosed in this Note 17,
unless otherwise indicated, the Company is unable to estimate the possible loss or range of losses that could potentially result
from the application of such non-monetary remedies.
As of December 31, 2023 and 2022, the Company had litigation settlement accruals of $0.6 million and $0.1 million,
respectively. The litigation settlement accruals relate to litigation matters that were either settled or a firm offer for settlement
was extended, thereby establishing an accrual amount that is both probable and reasonably estimable. See Note 21—
Discontinued Operations in the notes to the consolidated financial statements included elsewhere in this report for additional
information.
NOTE 18—FAIR VALUE MEASUREMENTS
Other than the convertible notes and warrants, and the equity investments, the carrying amounts of the Company's financial
instruments are equal to fair value at December 31, 2023. See Note 15—Debt for additional information on the convertible
90
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
notes and warrants, and see Note 8—Equity Investments in the notes to the consolidated financial statements included
elsewhere in this report for additional information on the equity investments.
Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3
unobservable inputs. There were no changes in the fair value of the Company's Level 3 liabilities during the years ended
December 31, 2023 and 2022 and the changes for the year ended December 31, 2021 are as follows (in thousands):
Contingent consideration, beginning of period
Transfers into Level 3
Transfers out of Level 3
Total net losses included in earnings (realized and unrealized)
Purchases, sales and settlements:
Additions
Payments
Contingent consideration, end of period
Year Ended
December 31,
2021
$
8,249
—
—
(8,249)
—
—
—
$
There was no contingent consideration liability at December 31, 2023 or 2022 because the final earnout period for the
QuoteWizard acquisition ended on October 31, 2021.
NOTE 19—RELATED PARTY TRANSACTIONS
In 2017, the Company's Board of Directors approved a $10.0 million contribution to fund the newly formed LendingTree
Foundation. In each of 2020 and 2019, the Company paid $3.3 million of the $10.0 million contribution, and paid the final
installment in 2022. In the fourth quarter of 2022, the Company's Board of Directors approved an additional $0.5 million
contribution to the LendingTree Foundation that the Company paid in 2023. Officers of the Company serve as officers of the
LendingTree Foundation.
NOTE 20—BENEFIT PLANS
The Company operates a retirement savings plan for its employees in the United States that is qualified under
Section 401(k) of the Internal Revenue Code. Employees are eligible to enroll in the plan upon date of hire. Participating
employees may contribute up to 50% of their pre-tax earnings, but not more than statutory limits ($22,500 for 2023, $20,500 for
2022, and $19,500 for 2021). The company match contribution is fifty cents for each dollar a participant contributes to the
plan, with a maximum contribution of 6% of a participant's eligible earnings. Matching contributions are invested in the same
manner as each participant's voluntary contributions in the investment options provided under the plan. LendingTree stock is
not included in the available investment options or the plan assets. Funds contributed to the plan vest according to the
participant's years of service, with one year of service vesting at 33%, two years of service vesting at 66%, and three years or
more of service vesting at 100%. Matching contributions were approximately $2.2 million, $2.8 million and $2.9 million for
the years ended December 31, 2023, 2022 and 2021, respectively.
NOTE 21—DISCONTINUED OPERATIONS
The LendingTree Loans Business is presented as discontinued operations in the accompanying consolidated financial
statements. The LendingTree Loans Business originated various consumer mortgage loans through HLC. On June 6, 2012, the
Company sold substantially all of the operating assets of HLC, including the LendingTree Loans Business, to a wholly-owned
subsidiary of Discover Financial Services (“Discover”). Discover generally did not assume liabilities of HLC that arose before
the closing date, except for certain liabilities directly related to assets Discover acquired.
Upon closing of the sale of substantially all of the operating assets of HLC on June 6, 2012, HLC ceased to originate
consumer loans. Certain liability for losses on previously sold loans remained with HLC.
Litigation settlements and contingencies and legal fees associated with related bankruptcy and legal proceedings against the
Company are included in discontinued operations in the accompanying consolidated financial statements.
91
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Home Loan Center, Inc. Bankruptcy Filing
On June 21, 2019, the U.S. District Court of Minnesota entered judgment in ResCap Liquidating Trust v. Home Loan
Center, Inc., against HLC for $68.5 million, see Litigation Related to Discontinued Operations below. The judgment against
HLC exceeded the assets of HLC, which were $11.2 million at July 21, 2019, including cash of $5.9 million.
On July 21, 2019, at the direction of the sole independent director of HLC, HLC voluntarily filed a petition under Chapter
11 of the United States Bankruptcy Code (the “Bankruptcy Code”) with the U.S. Bankruptcy Court in the Northern District of
California in San Jose, California (the “Bankruptcy Court”) in order to preserve assets for the benefit of all creditors of HLC.
On September 16, 2019, the Bankruptcy Court converted the bankruptcy to Chapter 7 of the Bankruptcy Code and appointed a
Trustee to liquidate HLC's assets.
As a result of the voluntary petition, LendingTree, LLC was, as of the initial July 21, 2019 bankruptcy petition filing date,
no longer deemed to have a controlling interest in HLC under applicable accounting standards. As a result, HLC and its
consolidated subsidiary were deconsolidated from the Company’s consolidated financial statements as of July 21, 2019. The
effect of such deconsolidation was the elimination of the consolidated assets and liabilities of HLC (and its consolidated
subsidiary) from the Company’s consolidated balance sheets.
During its bankruptcy, HLC indicated that it believed that it had claims against HLC’s sole shareholder, LendingTree,
LLC, and certain of its officers and directors, relating to the declaration of a dividend by HLC in January 2016 of $40.0 million.
In 2020, LendingTree, LLC and HLC entered into a settlement agreement in the amount of $36.0 million for the release of any
and all claims against the Company defendants by HLC, including the dividend claim. The Bankruptcy Court approved the
settlement on July 16, 2020. The $36.0 million settlement payment was made in the third quarter of 2020.
During the HLC bankruptcy, a bar date for claims against HLC was set, establishing a deadline for all HLC’s creditors to
assert any claim they may have had against HLC. Distributions were made to holders of allowed claims deemed timely filed.
After all distributions to creditors were made and HLC’s Chapter 7 bankruptcy estate was fully administered, the HLC
bankruptcy case was closed on July 14, 2021.
Litigation Related to Discontinued Operations
Residential Funding Company
ResCap Liquidating Trust v. Home Loan Center, Inc., Case No. 14-cv-1716 (U.S. Dist. Ct., Minn.), successor to Residential
Funding Company, LLC v Home Loan Center, Inc., No. 13-cv-3451 (U.S. Dist. Ct., Minn.). On or about December 16, 2013,
Home Loan Center, Inc. was served in the original captioned matter, which involves claims of Residential Funding Company,
LLC (“RFC”) for damages for breach of contract and indemnification for certain residential mortgage loans as well as
residential mortgage-backed securitizations (“RMBS”) containing mortgage loans. Plaintiff then alleged that, after RFC filed
for Chapter 11 protection, hundreds of proofs of claim were filed, many of which mirrored the litigation filed against RFC prior
to its bankruptcy. It filed substantially similar complaints against approximately 80 of the loan originators from whom RFC had
purchased loans, including HLC. In 2019, the U.S. District Court of Minnesota entered a judgment against HLC. See Home
Loan Center, Inc. Bankruptcy Filing above.
HLC’s filing under the Bankruptcy Code discussed above in Home Loan Center, Inc. Bankruptcy Filing created an
automatic stay of enforcement of the judgment entered against HLC. On August 27, 2019, plaintiff filed a lawsuit captioned
ResCap Liquidating Trust v. LendingTree, LLC, et al., Case No. 19-cv-2360 (U.S. Dist. Ct., Minn.), seeking to hold the
Company liable for the judgment against HLC. In June 2020, the Company entered into a settlement with ResCap, pursuant to
which, the Company agreed to, among other things, pay ResCap $58.5 million, less any amounts ResCap receives in the HLC
bankruptcy. In the third and fourth quarters of 2020, the Company made payments of $26.5 million and $6.4 million,
respectively, to the ResCap Liquidating Trust and the ResCap Liquidating Trust, in turn, assigned its allowed claims against
HLC to the Company. In the second quarter of 2021, the Company received $8.6 million related to these amounts, from the
final distributions in the HLC bankruptcy on account of the allowed claims that the ResCap Liquidating Trust had assigned to
the Company.
Lehman Brothers Holdings, Inc.
Lehman Brothers Holdings Inc. v. 1st Advantage Mortgage, LLC et al., Case No. 08-13555 (SCC), Adversary Proceeding
No. 16-01342 (SCC) (Bankr. S.D.N.Y.). In February 2016, Lehman Brothers Holdings, Inc. (“LBHI”) filed an Adversary
Complaint against HLC and approximately 149 other defendants (the “Complaint”).
92
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HLC’s filing under the Bankruptcy Code discussed above in Home Loan Center, Inc. Bankruptcy Filing created an
automatic stay of this proceeding. On June 11, 2020, LBHI filed a lawsuit captioned Lehman Brothers Holdings Inc. v.
LendingTree, LLC, et al., Case No. 20-cv-01351 (U.S. Dist. Ct., Minn.), seeking to hold the Company liable for their allowed
bankruptcy claim of $13.3 million. In July 2021, the Company entered into a settlement with LBHI, which payment was made
in the third quarter of 2021.
Financial Information of Discontinued Operations
The components of net loss reported as discontinued operations in the accompanying consolidated statements of operations
and comprehensive income (loss) are as follows (in thousands):
Revenue
Other operating expenses
Loss before income taxes
Income tax benefit
Net loss
Year Ended
December 31,
2021
$
—
(4,719)
(4,719)
696
(4,023)
$
The results of discontinued operations include litigation settlements and contingencies and legal fees associated with legal
proceedings against LendingTree, Inc. or LendingTree, LLC that arose due to the LendingTree Loans Business or the HLC
bankruptcy filing.
NOTE 22—SEGMENT INFORMATION
The Company manages its business and reports its financial results through the following three operating and reportable
segments: Home, Consumer, and Insurance. Characteristics which were relied upon in making the determination of the
reportable segments include the nature of the products, the organization's internal structure, and the information that is regularly
reviewed by the CODM for the purpose of assessing performance and allocating resources.
The Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and
lines of credit. We ceased offering reverse mortgage loans in the fourth quarter of 2022. The 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. The credit repair business was closed at the end of the second quarter
of 2023. The Insurance segment consists of insurance quote products and sales of insurance policies in our agency businesses.
The following tables are a reconciliation of segment profit, which is the Company's primary segment profitability measure,
to income before income taxes and discontinued operations. Segment cost of revenue and marketing expense represents the
portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related
expenses, that are directly attributable to the segments' products. This measure excludes overhead, fixed costs and personnel-
related expenses.
93
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Revenue
$ 143,753 $ 278,945 $ 249,605 $
199 $ 672,502
Segment cost of revenue and marketing expense
95,871
140,068
146,101
708
382,748
Segment profit (loss)
47,882
138,877
103,504
(509)
289,754
Year Ended December 31, 2023
Home
Consumer
Insurance
Other
Total
(in thousands)
Cost of revenue
Brand and other marketing expense
General and administrative expense
Product development
Depreciation
Amortization of intangibles
Goodwill impairment
Restructuring and severance
Litigation settlements and contingencies
Operating loss
Interest income, net
Other expense
Loss before income taxes
38,758
50,840
117,700
47,197
19,070
7,694
38,600
10,118
388
(40,611)
21,685
(105,993)
$ (124,919)
Revenue
$ 289,383 $ 396,109 $ 299,073 $
427 $ 984,992
Segment cost of revenue and marketing expense
186,299
221,531
207,239
982
616,051
Segment profit (loss)
103,084
174,578
91,834
(555)
368,941
Year Ended December 31, 2022
Home
Consumer
Insurance
Other
Total
(in thousands)
Cost of revenue
Brand and other marketing expense
General and administrative expense
Product development
Depreciation
Amortization of intangibles
Restructuring and severance
Litigation settlements and contingencies
Operating loss
Interest expense, net
Other income
Loss before income taxes
57,769
86,187
152,383
55,553
20,095
25,306
4,428
(18)
(32,762)
(26,014)
3,843
$
(54,933)
94
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Revenue
$ 441,738 $ 329,945 $ 326,153 $
663 $ 1,098,499
Segment cost of revenue and marketing expense
288,386
186,448
212,689
610
688,133
Year Ended December 31, 2021
Home
Consumer
Insurance
Other
Total
(in thousands)
Segment profit
Cost of revenue
Brand and other marketing expense
General and administrative expense
Product development
Depreciation
Amortization of intangibles
Change in fair value of contingent consideration
Restructuring and severance
Litigation settlements and contingencies
Operating income
Interest expense, net
Other income
153,352
143,497
113,464
53
410,366
57,297
85,857
153,472
52,865
17,910
42,738
(8,249)
53
392
8,031
(46,867)
123,272
Income before income taxes and discontinued operations
$
84,436
The CODM does not review information on segment assets and as such, no segment asset information is reported herein.
95
LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23—RESTRUCTURING ACTIVITIES
During September 2023, the Company initiated workforce reductions of 14 employees. The Company incurred
approximately $0.9 million in severance charges 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 are expected to be substantially completed by the third quarter of
2024.
On April 6, 2023, the Company made the decision to close the Ovation credit services business ( the "Ovation Closure".)
The Ovation Closure includes the elimination of approximately 197 employees, or 18%, of the Company's current workforce.
As a result of the Ovation Closure, the Company incurred $2.1 million in restructuring expense in connection with cash
expenditures for employee separation costs. The Ovation Closure, including cash payments, is expected to be completed by the
first quarter of 2024.
On March 24, 2023, the Company committed to a workforce reduction plan (the “Reduction Plan”), to reduce operating
costs. The Reduction Plan includes the elimination of approximately 162 employees, or 13%, of the Company’s current
workforce. As a result of the Reduction Plan, the Company 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, is expected to be substantially completed by the end of the second quarter of 2024.
During 2022, the Company completed workforce reductions in each of the first, second, and fourth quarters of
approximately 75 employees, 25 employees, and 50 employees, respectively. The Company incurred total expense in 2022 of
$4.4 million consisting of employee separation costs of $3.3 million and non-cash compensation expense of $1.1 million due to
the accelerated vesting of certain equity awards. All employee separation costs for 2022 actions were paid by the end of 2023.
Accrued Balance at
December 31, 2022
Income Statement
Impact
Payments
Non-Cash
Accrued Balance at
December 31, 2023
Q3 2023 action
Employee separation payments
Non-cash compensation
Q2 2023 action
Employee separation payments
Q1 2023 action
Employee separation payments
Non-cash compensation
2022 action
—
—
—
—
—
Employee separation payments
$
304
304 $
683
205
(429)
—
—
(205)
2,063
(2,029)
—
4,253
1,066
13
8,283 $
(3,832)
—
—
(1,066)
(317)
(6,607) $
—
(1,271) $
254
—
34
421
—
—
709
Accrued Balance at
December 31, 2021
Income Statement
Impact
Payments
Non-Cash
Accrued Balance at
December 31, 2022
2022 actions
Employee separation payments $
Non-cash compensation
$
— $
—
— $
3,345 $
1,083
4,428 $
(3,041) $
—
(3,041) $
— $
(1,083)
(1,083) $
304
—
304
96
Table of Contents
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Not applicable.
ITEM 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) of the Exchange Act, management, with the participation of our principal executive officer
(Chief Executive Officer) and our principal financial officer (Chief Financial Officer), evaluated, as of the end of the period
covered by this report, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e).
Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by
their nature can provide only reasonable assurance regarding management's control objectives. Management does not expect
that our disclosure controls and procedures will prevent or detect all errors and fraud. A control system, irrespective of how
well it is designed and operated, can only provide reasonable assurance and cannot guarantee that it will succeed in its stated
objectives.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31,
2023, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be
disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined
in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions
of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with
authorizations of our management and our directors; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial
statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness
of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the
criteria for effective internal control over financial reporting described in “Internal Control-Integrated Framework” (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation under
the framework in the Internal Control-Integrated Framework, issued by the COSO, management has concluded that our internal
control over financial reporting was effective as of December 31, 2023. The effectiveness of our internal control over financial
reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as stated in their attestation report appearing under “Item 8. Financial Statements and Supplementary Data”
included elsewhere in this annual report.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in the Exchange Act, Rules 13a-15(f)) that
occurred during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
ITEM 9B. Other Information
During the fiscal quarter ended December 31, 2023, none of the Company's directors or executive officers adopted or
terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy
97
the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement." Further, during the fiscal
quarter ended December 31, 2023 the Company did not adopt or terminate a Rule 10b5-1 trading arrangement.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
98
Table of Contents
PART III
As set forth below, the information required by Part III (Items 10, 11, 12, 13 and 14) is incorporated herein by reference to
the Company's definitive proxy statement to be used in connection with its 2023 Annual Meeting of Stockholders and which
will be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company's fiscal year
ended December 31, 2023 (the “2023 Proxy Statement”), in accordance with General Instruction G(3) of Form 10-K.
ITEM 10. Directors, Executive Officers and Corporate Governance
The information required by Item 10 will be contained in, and is hereby incorporated by reference to, the 2023 Proxy
Statement.
ITEM 11. Executive Compensation
The information required by Item 11 will be contained in, and is hereby incorporated by reference to, the 2023 Proxy
Statement.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 will be contained in, and is hereby incorporated by reference to, the 2023 Proxy
Statement.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 will be contained in, and is hereby incorporated by reference to, the 2023 Proxy
Statement.
ITEM 14. Principal Accounting Fees and Services
The information required by Item 14 will be contained in, and is hereby incorporated by reference to, the 2023 Proxy
Statement.
99
Table of Contents
PART IV
ITEM 15. Exhibits, Financial Statement Schedules
(a) List of documents filed as part of this report:
(1) Consolidated Financial Statements of LendingTree, Inc.
Report of Independent Registered Public Accounting Firm: PricewaterhouseCoopers LLP.
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2023, 2022
and 2021.
Consolidated Balance Sheets as of December 31, 2023 and 2022.
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2023, 2022 and 2021.
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021.
Notes to Consolidated Financial Statements.
(2) Consolidated Financial Statement Schedules of LendingTree, Inc.
All consolidated financial statements and schedules have been omitted since the required information is included in the
consolidated financial statements or the notes thereto, or is not applicable or required.
(3) Exhibits
The documents set forth below, numbered in accordance with Item 601 of Regulation S-K, are filed herewith or
incorporated herein by reference to the location indicated below.
Exhibit
Number
Description
2.1 Separation and Distribution Agreement among IAC/
InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc.,
Ticketmaster and Tree.com, Inc., dated August 20, 2008.
2.2 Tax Sharing Agreement among IAC/InterActiveCorp,
HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and
Tree.com, Inc., dated August 20, 2008.
2.3 Employee Matters
IAC/
InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc.,
Ticketmaster and Tree.com, Inc., dated August 20, 2008.
Agreement
among
2.4 Transition
Services Agreement
IAC/
InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc.,
Ticketmaster and Tree.com, Inc., dated August 20, 2008.
among
2.5 Spinco Assignment and Assumption Agreement among
IAC/InterActiveCorp, Tree.com, Inc., Liberty Media
Corporation and Liberty USA Holdings, LLC, dated
August 20, 2008.
2.6 Asset Purchase Agreement among Home Loan Center,
Inc., First Residential Mortgage Network, Inc. dba
SurePoint Lending, and
the shareholders of First
Residential Mortgage Network named therein, dated
November 15, 2010.
2.7 First Amendment to Asset Purchase Agreement among
HLC, SurePoint and the shareholders party thereto, dated
March 14, 2011.
2.8 Second Amendment to Asset Purchase Agreement among
HLC, SurePoint and the shareholders party thereto, dated
March 15, 2011.
2.9 Asset Purchase Agreement among Tree.com, Inc., Home
Loan Center, Inc., LendingTree, LLC, HLC Escrow, Inc.
and Discover Bank, dated May 12, 2011**
100
Location
Exhibit 2.1 to the Registrant's Registration Statement
on Form S-1 (No. 333-152700), filed August 1, 2008
Exhibit 10.2 to the Registrant's Current Report on
Form 8-K filed August 25, 2008
Exhibit 10.3 to the Registrant's Current Report on
Form 8-K filed August 25, 2008
Exhibit 10.4 to the Registrant's Current Report on
Form 8-K filed August 25, 2008
Exhibit 10.6 to the Registrant's Current Report on
Form 8-K filed August 25, 2008
Exhibit 2.1
Form 8-K filed November 16, 2010
to Registrant's Current Report on
Exhibit 2.1 to the Registrant's Current Report on
Form 8-K filed March 21, 2011
Exhibit 2.2 to the Registrant's Current Report on
Form 8-K filed March 21, 2011
Exhibit 2.1 to the Registrant's Current Report on
Form 8-K filed May 16, 2011
Exhibit
Number
Description
2.10 Asset Purchase Agreement among LendingTree, LLC,
RealEstate.com, Inc. and Market Leader, Inc., dated
September 15, 2011**
2.11 Amendment to Asset Purchase Agreement among Home
Loan Center, Inc., HLC Escrow, Inc., LendingTree, LLC,
Tree.com, Inc., Discover Bank and Discover Financial
Services, dated February 7, 2012**
2.12 Membership Interest Purchase Agreement, dated as of
November 16, 2016, by and among LendingTree, LLC,
Iron Horse Holdings, LLC, all of the members of Iron
Horse Holdings, LLC and Christopher J. Mettler. **
2.13 Assignment
2,
and Assumption Agreement,
dated
November
among General
by
Communication, Inc., Liberty Interactive Corporation,
Liberty USA Holdings, LLC, Ventures Holdco, LLC, and
LendingTree, Inc.
2017,
and
Location
Exhibit 2.1 to the Registrant's Current Report on
Form 8-K filed September 21, 2011
Exhibit 2.1 to the Registrant's Current Report on
Form 8-K filed February 8, 2012
Exhibit 2.1 to the Registrant's Current Report on
Form 8-K filed November 22, 2016
Exhibit 99.7(D) to the Registrant's Current Report on
Form SC 13D/A filed November 3, 2017
2.14 Unit Purchase Agreement dated as of October 4, 2018 by
and among LendingTree, LLC, QuoteWizard.com, LLC,
all of the members of QuoteWizard.com, LLC, and Scott
Peyree as the Securityholders Representative. **
2.15 Stock Purchase Agreement dated as of December 20,
2018 by and among LendingTree, LLC, Value Holding
Inc., all of the shareholders of Value Holding Inc., and
Jonathan Wu as the Sellers’ Representative. **
3.1 Amended and Restated Certificate of Incorporation of
LendingTree, Inc.
3.2 Fourth Amended and Restated By-laws of LendingTree,
Inc.
4.1 Amended and Restated Restricted Share Grant and
Shareholders' Agreement, among Forest Merger Corp.,
LendingTree, Inc., InterActiveCorp and the Grantees
named therein, dated July 7, 2003*
4.2 Registration Rights Agreement among Tree.com, Inc.,
Liberty Media Corporation and Liberty USA Holdings,
LLC, dated August 20, 2008.
Exhibit 2.1 to the Registrant’s Current Report on
Form 8-K/A filed October 12, 2018
Exhibit 2.1 to the Registrant’s Current Report on
Form 8-K filed December 27, 2018
Exhibit 3.1 to the Registrant's Current Report on
Form 8-K filed August 25, 2008
Exhibit 3.1 to the Registrant's Current Report on
Form 8-K filed November 15, 2017
Exhibit 10.8
the Registrant's Registration
to
Statement on Form S-1 (No. 333-152700), filed
August 1, 2008
Exhibit 10.5 to the Registrant's Current Report on
Form 8-K filed August 25, 2008
4.3
Indenture for .0625% Convertible Senior Notes due 2022 Exhibit 4.1 to the Registrant's Current Report on
4.4 Purchase Agreement for .0625% Convertible Senior
Notes due 2022
4.5 Base Issuer Warrant Transaction
4.6 Additional Issuer Warrant Transaction
4.7 Description of the Registrant's Securities Registered
Pursuant to Section 12 of the Securities Exchange Act of
1934
4.8
Indenture, dated as of July 24, 2020, between
LendingTree, Inc. and Wilmington Trust, National
Association
10.1 Employment Agreement between Douglas Lebda, the
Company and LendingTree, LLC, dated November 30,
2020*
10.2 LendingTree, Inc. 2017 Inducement Grant Plan*
10.3 Notice of Restricted Stock Unit Award Granted Under
the LendingTree, Inc. 2017 Inducement Plan*
Form 8-K filed May 31, 2017
Exhibit 99.1 to the Registrant's Current Report on
Form 8-K filed May 31, 2017
Exhibit 99.4 to the Registrant's Current Report on
Form 8-K filed May 31, 2017
Exhibit 99.5 to the Registrant's Current Report on
Form 8-K filed May 31, 2017
Exhibit 4.7 to the Registrant's Annual Report on
Form 10-K filed February 27, 2020
Exhibit 4.1 to the Registrant’s Current Report on
Form 8-K filed on July 24, 2020
Exhibit 10.2 to Registrant's Annual Report on Form
10-K filed March 1, 2021
the Registrant's Registration
Exhibit 4.4(A)
Statement on Form S-8 (No. 333-218747), filed
June 14, 2017
to
Exhibit 4.4(B)
the Registrant's Registration
Statement on Form S-8 (No. 333-218747), filed
June 14, 2017
to
101
Exhibit
Number
Description
10.4 Restricted Stock Award Agreement*
10.5 2011 Deferred Compensation Plan for Non-Employee
Directors*
10.6 Deferred Compensation Plan
for Non-Employee
Directors*
10.7 Standard Terms and Conditions to Restricted Stock
Award Letters of Tree.com BU Holding Company, Inc.*
10.8 Base Convertible Bond Hedge Transaction
10.9 Additional Convertible Bond Hedge Transaction
10.10 Credit Agreement, dated as of September 15, 2021
10.11 Agreement of Purchase and Sale, by and among
LendingTree, LLC and an affiliate of Greenstreet Real
Estate Partners, L.P., dated October 17, 2016
10.12 First Amendment to Purchase and Sale, by and among
LendingTree, LLC and an affiliate of Greenstreet Real
Estate Partners, L.P., dated November 28, 2016
10.13 Employment Agreement dated December 21, 2017,
among John David Moriarty, LendingTree, Inc., and
LendingTree, LLC.*
10.14 Seventh Amended and Restated LendingTree, Inc. 2008
Stock Plan*
10.15 Form of Notice of Stock Option Award Granted Under
the LendingTree, Inc. 2008 Stock and Annual Incentive
Plan*
10.16 Form of Notice of Restricted Stock Unit Award Granted
Under the LendingTree, Inc. 2008 Stock and Annual
Incentive Plan*
10.17 Form of Notice of Stock Option Award Granted to Non-
Employee Directors Under the LendingTree, Inc. 2008
Stock and Annual Incentive Plan*
10.18 Form of Notice of Restricted Stock Unit Award Granted
to Non-Employee Directors Under the LendingTree, Inc.
2008 Stock and Annual Incentive Plan*
10.19 Form of Base Convertible Note Hedge Confirmation
10.19 Form
of Additional Convertible Note Hedge
Confirmation
10.21 Form of Base Warrant Confirmation
10.22 Form of Additional Warrant Confirmation
10.23 LendingTree Executive Severance Pay Plan*
10.24 Memorandum on compensation changes for Trent
Ziegler, dated May 12, 2021*
10.25 LendingTree, Inc. Employee Stock Purchase Plan*
102
Location
the Registrant's Registration
Exhibit 4.4(C)
Statement on Form S-8 (No. 333-218747), filed
June 14, 2017
to
Exhibit 10.2 to the Registrant's Quarterly Report on
Form 10-Q filed April 30, 2015
the Registrant's Registration
Exhibit 10.15
Statement on Form S-1 (No. 333-152700), filed
August 1, 2008
to
Exhibit 10.2 to the Registrant's Current Report on
Form 8-K filed February 3, 2011
Exhibit 99.2 to the Registrant's Current Report on
Form 8-K filed May 31, 2017
Exhibit 99.3 to the Registrant's Current Report on
Form 8-K filed May 31, 2017
Exhibit 99.1 to the Registrant's Current Report on
Form 8-K filed September 16, 2021
Exhibit 10.31 to the Registrant's Annual Report on
Form 10-K filed February 28, 2017
Exhibit 10.32 to the Registrant's Annual Report on
Form 10-K filed February 28, 2017
Exhibit 10.1 to the Registrant’s Quarterly Report on
Form 10-Q filed April 27, 2018
Incorporated by reference from Appendix C to the
Registrant's Definitive Proxy Statement on Schedule
14A, filed on April 29, 2021
Exhibit 10.1 to the Registrant’s Quarterly Report on
Form 10-Q filed August 4, 2020
Exhibit 10.16 to the Registrant’s Annual Report on
Form 10-K filed February 28, 2023
Exhibit 10.3 to the Registrant’s Quarterly Report on
Form 10-Q filed August 4, 2020
Exhibit 10.4 to the Registrant’s Quarterly Report on
Form 10-Q filed August 4, 2020
Exhibit 99.2 to the Registrant’s Current Report on
Form 8-K filed July 24, 2020
Exhibit 99.3 to the Registrant’s Current Report on
Form 8-K filed July 24, 2020
Exhibit 99.4 to the Registrant’s Current Report on
Form 8-K filed July 24, 2020
Exhibit 99.5 to the Registrant’s Current Report on
Form 8-K filed July 24, 2020
Exhibit 10.41 to the Registrant's Annual Report on
Form 10-K filed March 03, 2021
Exhibit 10.1 to the Registrant’s Quarterly Report on
Form 10-Q filed July 30, 2021
Incorporated by reference from Appendix B to the
Registrant's Definitive Proxy Statement on Schedule
14A, filed on April 29, 2021
Exhibit
Number
Description
10.26 First Amendment to LendingTree, Inc. Employee Stock
Purchase Plan*
10.27 LendingTree, Inc. 2023 Stock Plan
10.28 LendingTree, Inc. 2023 Inducement Grant Plan
10.29 Form of Restricted Stock Unit Award pursuant to the
2023 Stock Plan
10.30 Form of Stock Option Award pursuant to the 2023 Stock
Plan
10.31 Form of Restricted Stock Unit Award pursuant to the
2023 Inducement Grant Plan
10.32 Form of Stock Option Award pursuant to the 2023
Inducement Grant Plan
to
Location
the Registrant's Registration
Exhibit 99.3
Statement on Form S-8 (No. 333-258391), filed
August 3, 2021
Incorporated by reference from Appendix B to the
Registrant’s Definitive Proxy Statement on Schedule
14A, filed on May 1, 2023
Exhibit 10.1 to the Registrant’s Quarterly Report on
Form 10-Q filed with the SEC on July 28, 2023
Exhibit 10.3 to the Registration Statement on Form
S-8 (No. 333-273547) , filed July 31, 2023
Exhibit 10.4 to the Registration Statement on Form
S-8 (No. 333-273547) , filed July 31, 2023
Exhibit 10.3 to the Registrant’s Quarterly Report on
Form 10-Q filed with the SEC on July 28, 2023
Exhibit 10.2 to the Registrant’s Quarterly Report on
Form 10-Q filed with the SEC on July 28, 2023
10.33 Employment Agreement between Jill Olmstead and the
Company, dated October 1, 2018*
Exhibit 10.39 to the Registrant's Annual Report on
Form 10-K filed March 1, 2022
10.34 Separation Agreement between Neil Salvage and the
Company, dated January 1, 2022*
Exhibit 10.40 to the Registrant's Annual Report on
Form 10-K filed March 1, 2022
10.35 Form of Note Repurchase Agreement dated March 6,
2023
10.36 Separation Agreement between John David Moriarty and
the Company, dated August 7, 2023*
10.37 First Amendment, dated December 29, 2023,
to
Employment Agreement between Douglas Lebda, the
Company and LendingTree, LLC, dated November 30,
2020*
10.38 Second Amendment, dated February 16, 2024,
to
Employment Agreement between Douglas Lebda, the
Company and Lendingtree, LLC, dated November 30,
2020*
Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K filed March 9, 2023
†
†
†
10.39 Consulting Agreement between John David Moriarty and
†
the Company, dated August 7, 2023*
19 LendingTree, Inc. Securities Trading and Related Matters
†
Policy
21.1 Subsidiaries of LendingTree, Inc.
23.1 Consent of independent registered public accounting
firm.
†
†
24.1 Power of Attorney (included on signature page of this
†
Annual Report on Form 10-K)
31.1 Certification of the Chief Executive Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a) of the Securities
Exchange Act of 1934 as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Financial Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a) of the Securities
Exchange Act of 1934 as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
32.1 Certification of the Chief Executive Officer pursuant to
to
18 U.S.C. Section 1350 as adopted pursuant
Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
†
†
††
††
103
Exhibit
Number
Description
Location
97 LendingTree, Inc. Clawback Policy*
†
101.CAL XBRL Taxonomy Extension Calculation Linkbase
†††
Document
101.DEF XBRL Taxonomy Extension Definition Linkbase
†††
Document
101.INS XBRL Instance Document — The instance document
does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL
document.
†††
101.LAB XBRL Taxonomy Extension Label Linkbase Document
†††
101.PRE XBRL Taxonomy Extension Presentation Linkbase
†††
Document
101.SCH XBRL Taxonomy Extension Schema Document
†††
104 Cover Page Interactive Data File (embedded within the
†††
Inline XBRL document contained in Exhibit 101)
_______________________________________________________________________________________________________________________________
† Filed herewith.
†† Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is
not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by
reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation
language in such filing.
††† Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed
not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as
amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise
are not subject to liability under those sections.
* Management contract or compensation plan or arrangement.
** Certain schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Company agrees
to furnish supplementally a copy of all omitted schedules to the SEC upon its request.
+ Portions of this exhibit have been omitted pursuant to a request for confidential treatment and this exhibit has been submitted
separately to the SEC.
ITEM 16. Form 10-K Summary
None.
104
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 28, 2024
LendingTree, Inc.
By:
/s/ DOUGLAS R. LEBDA
Douglas R. Lebda
Chairman and Chief Executive Officer
105
Table of Contents
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and
appoints each of Trent Ziegler and Heather Novitsky as his or her true and lawful attorney and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and
all amendments to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and to file the
same with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney and agent full power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney and agent may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities indicated and on the dates indicated.
Signature
Title
Date
/s/ DOUGLAS R. LEBDA
Douglas R. Lebda
/s/ TRENT ZIEGLER
Trent Ziegler
/s/ CARLA SHUMATE
Carla Shumate
Chairman, Chief Executive Officer and Director
(Principal Executive Officer)
February 28, 2024
Chief Financial Officer
(Principal Financial Officer)
February 28, 2024
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 28, 2024
/s/ GABRIEL DALPORTO
Director
February 28, 2024
Gabriel Dalporto
/s/ THOMAS DAVIDSON
Director
February 28, 2024
Thomas Davidson
/s/ MARK ERNST
Mark Ernst
Director
February 28, 2024
/s/ ROBIN HENDERSON
Director
February 28, 2024
Robin Henderson
/s/ STEVEN OZONIAN
Director
February 28, 2024
Steven Ozonian
/s/ DIEGO RODRIGUEZ
Director
February 28, 2024
Diego Rodriguez
/s/ SARAS SARASVATHY
Director
February 28, 2024
Saras Sarasvathy
/s/ G. KENNEDY THOMPSON
Director
February 28, 2024
G. Kennedy Thompson
106