LendingTree (TREE) Tops Q2 EPS by 21c, Revenues Miss; Lowers FY18 Revenue Outlook

LendingTree (NASDAQ: TREE) reported Q2 EPS of $1.47, $0.21 better than the analyst estimate of $1.26. Revenue for the quarter came in at $184.1 million versus the consensus estimate of $194.57 million.

"Our second quarter results once again prove the resiliency of the LendingTree business model," said Doug Lebda, Chairman and CEO. \"Despite well-publicized challenges in the mortgage and credit card industries, similar to mortgage and personal loan worries we\'ve seen in the past, our marketplace model enabled us to continue to grow variable marketing margin and adjusted EBITDA. We have once again proven our ability to grow in varying macroeconomic environments and our product diversification is continuing to build a moat around our business."

J.D. Moriarty, Chief Financial Officer, added "The diversification of the business over the last several years is enabling us to weather a very difficult environment. Several of our non-mortgage businesses continue to perform extremely well, and we\'re also beginning to reap the margin benefits of ongoing efforts to diversify our marketing mix. Our team continues to execute extremely well, and in the face of a difficult macro backdrop, we still intend to grow adjusted EBITDA roughly 30% in 2018."

Second Quarter 2018 Business Highlights

• Mortgage revenue for both purchase and refinance outpaced the broader industry. Revenue from our purchase mortgage product grew 11% over the second quarter 2017 while the industry originations grew 4% in the same period according to the Mortgage Bankers Association. Revenue from our refinance product declined 15% compared to a 20% decline in industry originations according to the MBA. MBA\'s refinance application index hit an 18-year low earlier in July.
• Record revenue from non-mortgage products of $117.2 million in the second quarter represents an increase of 44% over the second quarter 2017.
• Record personal loans revenue of $36.2 million grew 76% over second quarter 2017 and 39% sequentially.
• Revenue from our credit card offerings grew to $38.7 million, up 5% over the second quarter 2017.
• Home equity revenue continued to climb, growing 48% over second quarter 2017.
• More than 8.8 million consumers have now signed up for My LendingTree. Revenue contribution from MyLendingTree grew 105% in the second quarter compared to the prior year period as new features, such as free credit monitoring and email personalization, are driving increased engagement.

Business Outlook - 2018

LendingTree is introducing Revenue, Variable Marketing Margin and Adjusted EBITDA guidance for third quarter 2018 and revising full-year 2018, as follows:

3Q 2018:

• Revenue is anticipated to be in the range of $195 - $205 million.
• Variable Marketing Margin is anticipated to be $76 - $81 million.
• Adjusted EBITDA is anticipated to be in the range of $43 - $46 million. Third quarter Adjusted EBITDA guidance reflects an estimated $0.5 - $1.5 million of expense related to payroll taxes owed upon the exercise of employee stock options and vesting of restricted stock units.

Full-year 2018:

• Revenue is now anticipated to be in the range of $745 - $765 million, down from prior range of $770 - $790 million.
• Variable Marketing Margin is expected in the range of $275 - $285 million, up from prior range of $270 - $280.
• Adjusted EBITDA is now anticipated in the range of $148 - $152 million, up from prior range of $145 - $150 million, and representing growth of 29% - 32% over 2017.

GUIDANCE:

LendingTree sees FY2018 revenue of $745-765 million, versus the consensus of $782.55 million.

For earnings history and earnings-related data on LendingTree (TREE) click here.

You May Also Be Interested In

• Intuitive Surgiical (ISRG) beats earnings, revenue expectations in Q1
• SB Financial Group (SBFG) Tops Q1 EPS by 1c
• PPG Industries (PPG) Reports In-Line Q1 EPS, offers outlook