LendingTree, Inc.

Good day and thank you for standing by. Welcome to the LendingTree Incorporated first quarter 2026 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 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 Wessel, Head of Investor Relations. Please go ahead.

Thank you, Kelly, and hello to everyone joining us on the call to discuss our first quarter 2026 financial results. On with us today are Scott Pari, our President and CEO, and Jason Bangle, our CFO. This afternoon, we posted a detailed letter to shareholders on our Investor Relations website. We've also posted a new investor presentation that we would encourage everyone to look at on our website. For the purposes of today's discussion, we will assume that listeners have gone through those materials and will focus on Q&A. Before I hand over the call to Scott for his remarks, I remind everyone that during this 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, and I refer you to today's press release and shareholder letter, both available on our website, for comparable GAAP definitions and full reconciliations of non-GAAP measures to GAAP. And with that, Scott, please go ahead.

Thanks, Andrew, and I appreciate everyone joining us on the call today. I'm going to start with some highlights from our first quarter results and then spend a few minutes on how we're executing on our strategy before opening up the line for questions. We've posted an updated presentation on our investor relations website that goes deeper on some of the remarks I have today. We had an exceptional start to the year. Adjusted EBITDA grew 71% year over year on a 37% increase in revenue, driven by a very strong performance in our insurance segment and a healthy contribution from consumer. We had a record revenue quarter, and it was the highest quarterly adjusted EBITDA we've had in six years. Just as importantly, we continued to strengthen our financial position. Net leverage declined to 2.1 times from 3.4 times a year ago, and we were pleased to receive a credit upgrade from S&P to B-plus with a stable outlook. Stepping back, what these results reinforce is the strength of our model. We operate a high-margin, asset-light marketplace with a scalable cost structure and we are demonstrating meaningful operating leverage as we grow. That combination, strong growth and expanding margin, is core to our investment proposition. Turning to our segments, insurance continues to lead the way. Revenue and segment profit both achieve new records in the quarter, growing 51% and 50% respectively year over year. We are now the largest marketplace for consumers to shop for their insurance needs, be that auto, home, health, or other products. Our scale with our largest carriers combined with growing demand from midsize insurers competing for market share provides our network with unparalleled depth and breadth. That translates into better outcomes for consumers and optimizes our monetization. Looking ahead, we expect price decreases in auto insurance across select states to further stimulate shopping activity and competition amongst carriers, which should support continued momentum. It is becoming clearer and clearer that the P&C industry has entered into a period of strong health and stability. In consumer, we delivered another quarter of healthy growth led by small business lending. Revenue increased 49% year over year. As the quarter progressed, we did begin to see some softening in consumer demand for loans. We believe this is tied to the broader macro dynamics, including elevated tax refunds earlier in the year and more recently a decline in consumer sentiment, which reached historically low levels in April. We are seeing similar patterns from small business borrowers as well. While we are mindful of these near-term headwinds, we remain confident in the long-term growth opportunity in consumer. As broader macro uncertainty begins to normalize, we expect demand to recover and credit supply to be ample. In the meantime, we continue to invest in our small business concierge capabilities, which remains a key differentiator in driving conversion and customer satisfaction. Home remains pressured by elevated mortgage rates, but we continue to view the current level of revenue and profit as cyclical lows, and we have meaningful upside as rates normalize and transaction volumes recover. After making a dedicated marketing investment during the first quarter, we expect revenue growth will continue and margins should expand in Q2. Unlike most of our competitors that over-index to specific verticals, we lead with our diversified platform. Each of our operating segments has unique macroeconomic drivers. Insurance cycles tend to be uncorrelated with changes in interest rates and benefit from long-term secular shift towards digital acquisition. Our consumer segment is most closely tied to credit availability, while home is most highly tied to rate and interest rates and tied to the mortgage cycles. This diversification enables us to navigate varying market and economic cycles while still offering a clear path to growth. At the midpoint of our updated 26 outlook, adjusted EBITDA is running at a three-year compound annual growth rate of 26%. We believe this growth profile combined with our advantage margin structure and capital efficiency are unique and valuable components of our business model. Now I'd like to provide an update on execution against our strategy. As a reminder, our North Star is to be the number one destination to shop for financial products. Everything we do is anchored in that objective, which is focused on four pillars. accelerating the core business, improving the consumer experience, expanding our product offerings, and rebuilding our brand. At the heart of this strategy is a simple idea. If we deliver a better experience and build stronger brand awareness, we increase organic traffic, improve conversion, and drive better unit economics across the platform. On the consumer side, a compelling brand promise brings users into our ecosystem. We deliver an easy and memorable experience that helps them accomplish what they came to do, which improves satisfaction, repeat usage, and referrals. That increases lifetime value while reducing customer acquisition costs. On the partner side, more high intent traffic leads to more monetization opportunities. As partners see better outcomes, they deepen integrations, increase spend, and compete more aggressively within our marketplace, which further improves pricing and selection for our consumers. One of the clearest opportunities we see in shifting more of our traffic mix is shifting more of our traffic mix towards organic channels. Every five-point increase in organic revenue mix represents about $40 million of incremental segment profit and roughly 400 basis point uplift in our variable marketing margin. This is the economic opportunity we're actively investing into. Through improvements in consumer experience that drive repeat visits and brand initiatives that increase unaided awareness. AI is a critical enabler across all of these efforts. We understand investor focus on AI and its potential impact to our business. Our view is very clear. AI is a tailwind, not a disruptor. AI is changing how consumers discover information, but it is not changing how financial products are ultimately purchased. These are complex, highly regulated transactions that require trust, compliance, identity verification, and deep integration with providers. In that context, marketplaces like ours become even more important. AI can guide consumers, but it cannot complete the transaction. It cannot underwrite a loan, bind an insurance policy, or securely handle sensitive financial data across multiple providers. That is where our platform plays a critical role. We are leaning into this shift. We are using AI to improve every stage of the consumer journey, from personalized engagement and financial guidance to smarter matching and more efficient application handoffs. At the same time, we are deploying AI internally to drive efficiency across marketing sales and operations. During the quarter, we launched an internally developed AI agent for our search marketing teams that provides real-time optimization insights. Based on early success, we are expanding this capability across additional channels and into our sales organization. We are also continuing to see strong results from AI-powered voice tools in our call centers and are extending those capabilities and to outbound and SMS engagement as well. Taken together, these initiatives are improving conversion, reducing costs, and reinforcing our role as the transaction layer in the financial ecosystem. To wrap up, we believe our investment proposition is compelling. We are a high-margin asset-light marketplace with proven operating leverage. We have multiple growth engines with embedded upside across insurance, consumer, and home. We have a strengthened balance sheet that provides flexibility and resilience. and we are leveraging AI to enhance our platform. We're encouraged by our strong results to start the year and remain confident in both our strategy and our ability to execute. While we are mindful of near-term macro headwinds, we believe we are well positioned to deliver durable growth and increased profitability over time. With that, I'll pause here and open the line for questions.