LendingTree, Inc.

Good day, and thank you for standing by. Welcome to LendingTree Incorporated's third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 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 Wessel, Vice President, Investory License. Please go ahead, sir.

Thank you, Norma, and good morning to everyone joining us on the call to discuss LendingTree's third 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 the call, we will assume the listeners read that letter and will 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 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. With that, Doug, please go ahead.

Thank you, Andrew, and thank you to all of you who are joining us today. We earned $22 million of adjusted EBITDA in the third quarter, generating a 14% operating margin, which was at the high end of our forecast. We again generated strong segment margins in both consumer and insurance and continue to benefit from our focus on operating efficiency. We remain soundly profitable with a strong balance, with a strong balance sheet, despite the significant revenue challenges we've been navigating over the last few quarters. We have made significant changes at the company. Most notably, including our senior leadership positions, our operating expenses have decreased by 30% from peak levels, thanks to proactive cost initiatives taken by management, which should generate strong operating leverage in a recovering revenue scenario. We have redesigned our product function with dedicated project staffing and clearly defined quarterly goals. by group that are tracked and published internally so that all employees can follow them. Finally, we focused our resources on optimizing our core marketplace business and remove distractions from our employees to accomplish targeted VMD improvements. For example, during the quarter, we identified areas where we can increase monetization of consumer traffic through more effective routing and cross selling. Also, we began recently live testing with six credit card issuers for our redesigned TreeQual platform. It is the first service to offer full credit pre-qualification to unauthenticated consumer traffic with complete fraud protection enabled by our partnership with the top credit bureau. TreeQual has received significant interest from top credit card issuers. In combination with the margin enhancements we've seen from our light speed implementation, We are quite optimistic about how our credit card business can improve going forward as we work and grow share in this very large market. Our outlook for insurance has improved significantly over the last quarter. We know from publicly available data that we are taking share from competitors. Over a year ago, our team committed to delivering the highest quality volume in the face of reduced demand from carriers. That focus on quality and meeting each one of our insurance partners where they needed us most drove those market share gains. Recent conversations with the marketing teams at large carriers reinforce that we are accounting for an increased portion of their budgets. Carriers also have indicated that underwriting results are supportive of increased marketing for customer acquisition, which we expect will be in the very near term. We aim to continue increasing our share of their growing budgets, which would provide a material uplift to our earnings profile. We are also acutely aware of the pressure our July 2025 convertible note maturity has on our share price. The management team continues to explore a variety of paths to replace this debt with capital that has an extended maturity profile, providing us with an additional time for our numerous actions to improve the business to take hold. And now, operator, I'd be happy to open it for questions.