Calling 2022 “perhaps one of the most difficult operating environments we have faced in our history as a public company,” LendingTree on Monday reported its fourth-straight quarterly loss.
The Charlotte, N.C.,-based operator of the online financial services marketplace LendingTree.com, reported a net loss from continuing operations of $10.4 million, or 81 cents per diluted share, in the fourth quarter of 2022, an improvement from a loss of $158.7 million, or $12.44 per diluted share, in the third quarter.
The company last reported a profit in the fourth quarter of 2021, when it earned $48.4 million, or $3.67 per diluted share.
LendingTree reported consolidated revenue of $202.1 million in the fourth quarter of 2022, down 22% year over year, with its Home segment revenue down 50% from the prior year period due to reduced demand from homeowners for refinancing transactions and a weaker overall home purchase environment, the company said.
In a letter to shareholders signed by LendingTree Chairman & CEO Doug Lebda and CFO Trent Ziegler, they state that the company “was tested in 2022, in perhaps one of the most difficult operating environments we have faced in our history as a public company.” LendingTree went public in February 2000.
The letter continued, “Significantly higher interest rates weighed heavily on mortgage activity while persistent inflationary pressures wrought havoc on virtually all of our insurance carrier partners. Despite those challenges, we believe our performance this past year proves we have built a durable business that can successfully navigate a very difficult economic cycle, while also enabling us to invest for the future.”
Home segment revenue was $48.6 million, down from $96.3 million a year earlier.
“Within Home, our core mortgage business generated revenue of $22.6 million, down 72% YOY, as demand for refinancing transactions has diminished with almost no outstanding mortgages today carrying a higher rate than current loan offerings,” the company said. “Other Home revenue — consisting almost entirely of our home equity loan product — increased 55% from 2021, as owners benefit from near record levels of equity in their homes to borrow against for other debt repayments and to finance home improvements.”
The company noted that its Home segment includes purchase mortgage, refinance mortgage, home equity loans, and reverse mortgage loans, but added that it “ceased offering reverse mortgage loans in Q4 2022.”
Its Insurance segment performed well, reporting a segment profit of $25.6 million on revenue of $67 million, up 23% and 2%, respectively, from a year earlier. Lebda said the results reflected “the team's focus on maximizing profitability in a depressed revenue environment.”
The letter also noted that, ”During the quarter we implemented our previously announced expense reduction efforts, and we have additional expense plans ready should business performance fall short of expectations as we progress through the year ahead.”
The company reported general and administrative expenses of $36.58 million for the fourth quarter, down 76% from $153.5 million a year earlier.
Along with announcing its fourth-quarter results, LendingTree also announced the launch of its LendingTree Win Card, “our first product designed to reward consumers for their healthy financial habits available exclusively to MyLendingTree members,” Lebda said.
As of Dec. 31, 24.8 million consumers had signed up for MyLendingTree, the company said.
The Win Card is the company’s first branded consumer credit offering, in partnership with fintech company Upgrade. According to LendingTree, the Win Card leverages Upgrade's unique card structure, offering the flexibility and convenience of a credit card with the predictability and simplicity of a personal loan. In addition to zero annual fees, cardholders can earn 2% cash back on all purchase categories.
“We spent a significant portion of last year speaking with thousands of consumers, identifying key financial problems that most burdened them,” Lebda and Ziegler state in the shareholder letter. “This input led to designing a number of unique features for the Win Card, which offers a cashback incentive tied to regular usage of our MyLendingTree logged-in experience. We look forward to sharing more milestones in coming quarters as we build a destination for our customers to get timely advice on how to improve their financial lives, which is more relevant to them now than ever.”
