LendingTree, Inc.

Good day, and thank you for standing by, and welcome to the LendingTree conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Andrew Wessler, Head of Investor Relations. Please go ahead.

Thanks, Operator. Good morning to everyone joining us on the call to discuss LendingTree's second quarter 2023 financial results. On the call today are Doug Lebda, LendingTree's Chairman and CEO, Scott Puri, COO and President of Marketplace Businesses, and Trent Ziegler, CFO. As a reminder to everyone, we posted a detailed letter to shareholders on our investor relations website earlier today. And for the purposes of today's call, we'll assume that listeners have read that letter and we'll focus on Q&A. Before I hand the call over to Doug for his remarks, I remind everyone that during today's call, we may discuss LendingTree's expectations for future performance. Any forward-looking statements that we make are subject to risks and uncertainties, and LendingTree's actual results could differ materially from the views expressed today. Many, but not all, of the risks we face are described in our periodic reports filed with the SEC. We will also discuss a variety of non-GAAP measures on the call today, and I refer you to today's press release and shareholder letter, both available on our website, for the comparable GAAP definitions and full reconciliations of non-GAAP measures to GAAP. And with that, Doug, please go ahead.

Thank you, Andrew, and thank you, everyone, for joining us today. We earned $27 million of adjusted EBITDA in the second quarter, generating a 15% margin, which was well ahead of our forecast. Our outperformance was due to strong segment margin performance in consumer and insurance, combined with our laser focus on managing operating expenses. Although the revenue environment remains challenging across all three of our segments, our team's work on improving operating efficiency allowed us to meet our VMD forecasts. As the second quarter progressed, credit markets broadly tightened across the banking and lending industries, causing demand for many of our lending partners to decline. In-home, several mortgage originators were forced to reduce their bids as cost per funded loan had reached levels that were no longer sustainable. Personal and small business lenders broadly tightened their criteria lending further, causing approval rates for our customers to decline. The insurance carriers, we work with we're continuing to decrease their marketing budgets as inflationary impacts will require further increases to auto and home premium rates. This revenue degradation continued into July and is baked into our updated financial outlook we're providing this morning. That's the bad news. The good news is that these macroeconomic should prove temporary. We're encouraged that the Fed is signaling it's nearing the end of its campaign to tighten financial conditions with higher interest rates. The pace of inflation continues to slow. We also recognize that a healthy labor market with historically low unemployment is a key component for lenders to expand their relationships with their customers, want capital markets volatility, and short-term economic uncertainty subsides. We have made changes to adapt to the challenges we're facing. We've focused our management team to capture incremental revenue while improving our expense profile. We have improved our product function and have identified key areas for potential additional savings as a result. For example, Scott Topman, our CTO, has taken over personally our data initiative. We've also brought our people back to the office, which has helped us speed decision-making and reinforce the entrepreneurial culture that has made us such a successful company historically. In the third quarter, the management team is focused on maintaining cost discipline and identifying areas of incremental revenue growth despite the various headwinds that we've been facing. We're going to release our reimagined and rebranded MyLendingTree platform and continue working on improving the customer experience to drive more engagement with our customers, higher conversion rates, and thus higher unit economics. Before turning the call over to Scott for his comments, I would like to thank J.D. Moriarty for the impact he has had to his time at LendingTree. He helped lead our diversification strategy, completing seven acquisitions in three years, which have helped us remain solidly profitable despite the financial the very difficult operating environment that we're facing. I could not be more excited for Scott to assume his additional responsibilities of leading our lending marketplace businesses. Our sales and marketing teams will also report directly to him. His performance, the founder and president of Quote Wizard, has been exemplary through multiple cycles, including the current one. He's proven to be an exceptional operator, inspirational leader, and truly embodies the entrepreneurial spirit of LendingTree. We are looking forward to the positive impact he's going to have on our own business moving forward. Scott?