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What changed in LendingTree, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of LendingTree, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+300 added−300 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-28)

Top changes in LendingTree, Inc.'s 2023 10-K

300 paragraphs added · 300 removed · 222 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur QuoteWizard business is one of the largest insurance comparison 6 Table of Contents marketplaces in the growing online insurance advertising market. ValuePenguin, a personal finance website that offers consumers objective analysis on a variety of financial topics from insurance to credit cards, is also part of our Insurance segment.
Biggest changeValuePenguin, a personal finance website that offers consumers objective analysis on a variety of financial topics from insurance to credit cards, is also part of our Insurance segment. We intend to continue adding new offerings for consumers, small businesses and Network Partners on our online marketplace, in order to grow and diversify our sources of revenue.
Further, we have been building and improving our MyLendingTree platform, which provides a relationship-based consumer experience, rather than just a transaction-based experience. 3 Table of Contents Evolution and Future Growth of Our Business At its inception, our original business was to serve consumers seeking home mortgage loans by matching them with various lenders.
Further, we have been building and improving our Spring platform (previously MyLendingTree), which provides a relationship-based consumer experience, rather than just a transaction-based experience. 3 Table of Contents Evolution and Future Growth of Our Business At its inception, our original business was to serve consumers seeking home mortgage loans by matching them with various lenders.
Any amendments to or waivers of the code of business conduct and ethics that are of the type described in Item 406(b) and (d) of Regulation S-K will be disclosed on our website or in public filings to the extent required by the applicable rules. 9 Table of Contents
Any amendments to or waivers of the code of business conduct and ethics that are of the type described in Item 406(b) and (d) of Regulation S-K will be disclosed on our website or in public filings to the extent required by the applicable rules. 8 Table of Contents
Consumers can return to the site and view their offer(s) at any time by logging in to their MyLendingTree profile. Additionally, matched lenders and offers are also sent to the email address associated with the consumer request.
Consumers can return to the site and view their offer(s) at any time by logging in to their Spring profile. Additionally, matched lenders and offers are also sent to the email address associated with the consumer request.
We achieve this through dedication to our core principles which include: building truly outstanding products, being open and 8 Table of Contents candid, acting with urgency and creativity, taking charge, setting goals and being accountable, and committing to excellence. Employees are stockholders of the Company, allowing them to take charge and have a direct impact on company choices.
We achieve this through dedication to our core principles which include: building truly outstanding products, being open and candid, acting with urgency and creativity, taking charge, setting goals and being accountable, and committing to excellence. Employees are stockholders of the Company, allowing them to take charge and have a direct impact on company choices.
Through multiple branded marketplaces, LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 600 partners (which we refer to as “Network Partners”) in one simple search, and choose the option that best fits their financial needs.
Through multiple branded marketplaces, LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of approximately 500 partners (which we refer to as “Network Partners”) in one simple search, and choose the option that best fits their financial needs.
As a result, we are subject to a variety of federal and state laws and regulations, including: • The Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, Fair and Accurate Credit Transactions Act of 2003 (“FACTA”), the Fair Housing Act, the Real Estate Settlement Procedures Act (“RESPA”), and similar state laws, all of which place certain restrictions on the manner in which consumer loans are marketed and originated, and some of which impose restrictions on the amount and nature of fees that may be charged to lenders and real estate professionals for providing or obtaining consumer loan requests. 7 Table of Contents • The Dodd-Frank Wall Street Reform and Consumer Protection Act, which imposes, among other things, limitations on fees charged by mortgage lenders, and requirements related to mortgage disclosures. • Federal and state licensing laws. • Federal and state laws, which impose restrictions on activities conducted through telephone, mail, email, mobile device or the Internet, including the Telemarketing Sales Rule (“TSR”), the Telephone Consumer Protection Act (“TCPA”), the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) and the Federal Trade Commission Act. • Federal and state laws relating to offering of credit repair services to consumers, including such laws that impose restrictions on the usage and storage of consumer credit information such as the Credit Repair Organizations Act (“CROA”) and the Fair Credit Reporting Act. • Federal and state laws and regulations relating to data privacy and security, including the Gramm-Leach-Bliley Act (“GLBA”), which may impact how we collect, use, store, share and otherwise process personal information of consumers and other individuals.
As a result, we are subject to a variety of federal and state laws and regulations, including: • The Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, Fair and Accurate Credit Transactions Act of 2003 (“FACTA”), the Fair Housing Act, the Real Estate Settlement Procedures Act (“RESPA”), and similar state laws, all of which place certain restrictions on the manner in which consumer loans are marketed and originated, and some of which impose restrictions on the amount and nature of fees that may be charged to lenders and real estate professionals for providing or obtaining consumer loan requests. • The Dodd-Frank Wall Street Reform and Consumer Protection Act, which imposes, among other things, limitations on fees charged by mortgage lenders, and requirements related to mortgage disclosures. • Federal and state licensing laws. • Federal and state laws, which impose restrictions on activities conducted through telephone, mail, email, mobile device or the Internet, including the Telemarketing Sales Rule (“TSR”), the Telephone Consumer Protection Act (“TCPA”), the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) and the Federal Trade Commission Act. • Federal and state laws and regulations relating to data privacy and security, including the Gramm-Leach-Bliley Act (“GLBA”), which may impact how we collect, use, store, share and otherwise process personal information of consumers and other individuals.
Network Partners that receive a consumer request form evaluate the information contained in it to determine whether to make a conditional loan offer. 5 Table of Contents (4) Communication of a Conditional Offer. All matched Network Partners and any conditional offers are presented to the consumer upon completion of the consumer request form.
Network Partners that receive a consumer request form evaluate the information contained in it to determine whether to make a conditional loan offer. (4) Communication of a Conditional Offer. All matched Network Partners and any conditional offers are presented to the consumer upon completion of the consumer request form.
Other factors affecting our businesses include macro factors such as credit availability in the market, interest rates, the strength of the economy and employment. Competition Our businesses compete with other online marketing companies, including online intermediaries that operate network-type arrangements. We also face competition from lenders and insurance agents that source consumers directly.
Other factors affecting our businesses include macro factors such as credit availability in the market, interest rates, inflation, the strength of the economy and employment. 6 Table of Contents Competition Our businesses compete with other online marketing companies, including online intermediaries that operate network-type arrangements. We also face competition from lenders and insurance agents that source consumers directly.
We believe the consumer and small business financial services industry is still in the early stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established.
We believe the consumer and small business financial services industry is in the middle stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established.
In addition, we reserve and register domain names when and where we deem appropriate. As of December 31, 2022, we owned approximately 1,500 registered domain names. We also have agreements with third parties that provide for the licensing of patented, copyrighted and other proprietary technology used in our business.
In addition, we reserve and register domain names when and where we deem appropriate. As of December 31, 2023, we owned approximately 1,550 registered domain names. We also have agreements with third parties that provide for the licensing of patented, copyrighted and other proprietary technology used in our business.
As we develop or identify new or improved proprietary technologies, we seek patent protection in the United States and abroad, as appropriate. As of December 31, 2022, we owned one issued U.S. patent related to the system and method for collecting financial information over a global communications network, which expires in 2032.
As we develop or identify new or improved proprietary technologies, we seek patent protection in the United States and abroad, as appropriate. As of December 31, 2023, we owned one (1) issued U.S. patent related to the system and method for collecting financial information over a global communications network, that expires in 2032.
Consumers complete a single request form with information regarding the type of mortgage loan product they are seeking, loan preferences and other data. Consumers also consent to a soft inquiry regarding their credit. (2) Consumer Request Form Matching and Transmission.
Consumers complete a single request form with information regarding the type of mortgage loan product they are seeking, loan preferences and other data. Consumers also consent to a soft inquiry regarding their credit and to have lenders contact them. (2) Consumer Request Form Matching and Transmission.
During 2022, the challenging interest rate environment and persistent inflationary pressures have presented additional challenges for many of our mortgage lending and insurance partners. We have seen the most significant impact in our Home segment as mortgage rates have nearly doubled in 2022, causing a sharp decline in refinance volumes and more recent pressure on purchase activity.
During 2022, the challenging interest rate environment and persistent inflationary pressures presented challenges for many of our mortgage lending and insurance partners. We saw the most significant impact in our Home segment as mortgage rates nearly doubled in 2022, causing a sharp decline in refinance volumes and pressure on purchase activity.
However, in certain historical periods additional factors affecting the mortgage and real estate markets, such as the 2008-2009 financial crisis and related recession as well as the economic conditions related to the COVID-19 pandemic, have impacted customary seasonal trends.
However, in certain historical periods additional factors affecting the mortgage and real estate markets, such as the current high interest rate economic period, the 2008-2009 financial crisis and related recession as well as the economic conditions related to the COVID-19 pandemic, have impacted customary seasonal trends.
As of December 31, 2022, we owned 44 trademarks and service marks, 37 of which are registered with the United States Patent and Trademark Office (“USPTO”), and seven of which have applications pending with the USPTO but have not yet been registered. These registrations can typically be renewed at 10-year intervals.
As of December 31, 2023, we owned 60 trademarks and service marks, 53 of which are registered with the United States Patent and Trademark Office (“USPTO”), and seven of which have applications pending with the USPTO but have not yet been registered. These registrations can typically be renewed at 10-year intervals.
We believe that consumers with existing LendingTree-branded associations will be more likely to utilize our other service offerings than those of other providers whose brands consumers may not recognize. Our MyLendingTree platform offers a personalized comparison-shopping experience, by providing free credit scores and credit score analysis.
We believe that consumers with existing LendingTree-branded associations will be more likely to utilize our other service offerings than those of other providers whose brands consumers may not recognize. Our Spring platform (previously called MyLendingTree) offers a personalized comparison-shopping experience, financial health advice and credit simulations by providing free access to credit scores and credit score analysis.
The Company and our employees are committed to helping our communities thrive through a variety of Company-sponsored annual and ongoing community outreach efforts. As of December 31, 2022, we had 1,253 employees, of which approximately 1,240 are full-time and 13 are temporary or part-time.
The Company and our employees are committed to helping our communities thrive through a variety of Company-sponsored annual and ongoing community outreach efforts. As of December 31, 2023, we had 870 employees, of which approximately 860 are full-time and 10 are temporary or part-time.
Products Our Home segment includes the following products: purchase mortgage, refinance mortgage, home equity loans and lines of credit, and real estate. Our Consumer segment includes the following products: credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products such as credit repair and debt settlement.
Segment Reporting We have three reportable segments: Home, Consumer, and Insurance. Products Our Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and lines of credit. Our Consumer segment includes the following products: credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products such as debt settlement.
Insurance Segment Our Insurance segment includes information, tools and access to insurance quote products, including automobile, home, health and Medicare, through which consumers are matched with insurance lead aggregators to obtain insurance offers, as well as insurance policies in our agency businesses.
Insurance Segment Our Insurance segment includes information, tools and access to insurance quote products, including automobile, home, health and Medicare, through which consumers are matched with insurance lead aggregators to obtain insurance offers, as well as insurance policies in our agency businesses. Our QuoteWizard business is one of the largest insurance comparison marketplaces in the growing online insurance advertising market.
We generate revenue from credit repair and debt relief services through subscription fees from consumers that enroll in our credit repair product, or a fee for a customer referral to a service provider partner or through a fee at the time a consumer enrolls in a program with one of our Network Partners.
We generate revenue from the deposit account product when a consumer clicks from our website through to a financial institution's website. We generate revenue from debt relief services through a fee for a customer referral to a service provider partner or through a fee at the time a consumer enrolls in a program with one of our Network Partners.
This platform enables us to monitor consumers' credit profiles and then identify and alert them to loans and other offerings on our marketplace that may be more favorable than the terms they have at a given point in time. This is designed to provide consumers with measurable savings opportunities over their lifetime.
This authenticated and secure platform enables us to monitor consumers' credit profiles, identify and alert them to changes in their financial health, and to recommend loans and other offerings on our marketplace that may be more favorable than the terms they have at a given point in time.
By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of revenue. We intend to capitalize on our expertise in performance marketing, product development and technology by leveraging the widespread recognition of the LendingTree brand.
We intend to capitalize on our expertise in performance marketing, product development and technology by leveraging the widespread recognition of the LendingTree brand.
We intend to continue adding new offerings for consumers, small businesses and Network Partners on our online marketplace, in order to grow and diversify our sources of revenue. We may develop such new offerings through internal product development efforts, strategic business relationships with third parties and/or acquisitions. Seasonality Revenue in our Home segment is subject to cyclical and seasonal trends.
We may develop such new offerings through internal product development efforts, strategic business relationships with third parties and/or acquisitions. Seasonality Revenue in our Home segment is subject to cyclical and seasonal trends.
Segment revenue is as follows (in thousands) : For the Year Ended December 31, 2022 2021 2020 Home $ 289,383 $ 441,738 $ 320,992 Consumer 396,109 329,945 253,198 Insurance 299,073 326,153 333,765 Other 427 663 2,035 Total revenue $ 984,992 $ 1,098,499 $ 909,990 LendingTree does not charge consumers for the use of our services, except for credit repair services.
Our Insurance segment consists of insurance quote products and insurance policies in our agency businesses. 4 Table of Contents Segment revenue is as follows (in thousands) : For the Year Ended December 31, 2023 2022 2021 Home $ 143,753 $ 289,383 $ 441,738 Consumer 278,945 396,109 329,945 Insurance 249,605 299,073 326,153 Other 199 427 663 Total revenue $ 672,502 $ 984,992 $ 1,098,499 LendingTree does not charge consumers for the use of our services.
Home Segment We partner with lenders throughout the United States to provide full geographic lending coverage and to offer a complete suite of loan offerings on our marketplace.
For the years ended December 31, 2023, 2022 and 2021 no Network Partners accounted for more than 10% of total consolidated revenue. Home Segment We partner with lenders throughout the United States to provide full geographic lending coverage and to offer a complete suite of loan offerings on our marketplace.
We also anticipate less consumer demand for credit cards in the fourth quarter of each year, and we anticipate higher consumer demand for deposit accounts in the first quarter of each year. The majority of consumer demand for in-school student loan products occurs in the third quarter coinciding with collegiate enrollment in late summer.
The majority of consumer demand for in-school student loan products occurs in the third quarter coinciding with collegiate enrollment in late summer.
We also own one provisional U.S. patent related to systems and methods for optimizing software development and testing which expires in January 2024, at which time a non-provisional patent application will be filed. Many of our services are offered under proprietary trademarks and service marks.
We also owned one (1) 7 Table of Contents provisional U.S. patent related to systems and methods for optimizing software development and testing that expired on January 30, 2024. Many of our services are offered under proprietary trademarks and service marks.
Although our Insurance segment continues to rebound from the trough in the fourth quarter of 2021, the recovery has been slower than expected as demand from our carrier partners remains volatile as premium increases continue to chase inflation.
Although our Insurance segment rebounded from the trough in the fourth quarter of 2021, the recovery was slower than expected as demand from our carrier partners remained volatile as they continued to attempt to implement premium increases to offset the effect of inflation on claims.
Our Ovation business is a leading provider of credit services with a strong customer service reputation. • Debt relief services, through which consumers can obtain assistance negotiating existing loans. We refer to the various purchasers of leads from our other marketplaces as lead purchasers.
We ceased offering credit repair products at the end of the second quarter of 2023 when we shut-down our Ovation business. • Debt relief services, through which consumers can obtain assistance negotiating existing loans. We refer to the various purchasers of leads from our other marketplaces as lead purchasers.
We generate revenue from real estate brokerage services through match fees paid to us by real estate brokers participating in our online marketplace. Consumer Segment Consumer lending products on our online marketplace include information, tools and access to multiple conditional loan offers for the following: • Auto, which includes our auto refinance and purchase loan products.
We ceased offering matches to providers of reverse mortgage loans in the fourth quarter of 2022. 5 Table of Contents Consumer Segment Consumer lending products on our online marketplace include information, tools and access to multiple conditional loan offers for the following: • Auto, which includes our auto refinance and purchase loan products.
In addition, the auto and home insurance industry was impacted in 2022 by persistent industry headwinds, supply chain issues, rising accident severity and frequency, and hurricane losses. 4 Table of Contents Segment Reporting We have three reportable segments: Home, Consumer, and Insurance.
In addition, the auto and home insurance industry was impacted in 2022 by persistent industry headwinds, supply chain issues, rising accident severity and frequency, and hurricane losses. During 2023, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending and insurance partners.
We believe the strength of our brands and of our Network Partners places us in a strong position to continue to benefit from this market shift. Recent Business Acquisitions & Investments In January 2022, we acquired an equity interest in EarnUp Inc. (“EarnUp”).
We believe the strength of our brands and of our Network Partners places us in a strong position to continue to benefit from this market shift. Economic Conditions We continue to monitor the current global economic environment, specifically inflationary pressures and interest rates, and any resulting impacts on our financial position and results of operations.
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EarnUp is a consumer-first payment platform that intelligently automates loan payment scheduling and helps consumers better manage their money and improve their financial well-being. In February 2020, we acquired an equity interest in Stash Financial, Inc. (“Stash”). Stash is a consumer investing and banking platform.
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Customers can track the progress of their financial health over time based on actions they have taken, and see recommended credit score improvement actions, loans or other products offered by LendingTree. By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of revenue.
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Stash brings together banking, investing, and financial services education into one seamless experience offering a full suite of personal investment accounts, traditional and Roth investment retirement accounts (“IRAs”), custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back® rewards program. These investments continue our diversification strategy.
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In our Home segment, mortgage rates hit multi-decade highs of nearly 8% in October, then proceeded to drop below 7% by December, ending the year at 6.6%. The continued high mortgage rates in 2023 and home affordability issues continued to cause declines in refinance volumes and purchase activity.
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Economic Conditions During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The pandemic significantly impacted the economic conditions in the U.S., as federal, state and local governments reacted to the public health crisis, creating significant uncertainties in the U.S. economy.
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In our Insurance segment, demand from our carrier partners remained volatile for much of the year as they continued to deal with persistent industry headwinds. In the last months of 2023, we began to see advertising budgets from our carrier partners increase and we are optimistic about the prospect for continued increases into 2024.
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The downstream impact of various lockdown orders and related economic pullback affected our business and marketplace participants to varying degrees. We are continuously monitoring the impacts of the current economic conditions related to the COVID-19 pandemic and the effect on our business, financial condition and results of operations.
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We ceased offering reverse mortgage loans on our marketplace in the fourth quarter of 2022. We ceased offering credit repair products at the end of the second quarter of 2023 when we shut-down our Ovation business.
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Of our three reportable segments, our Consumer segment was impacted the most as unsecured credit and the flow of capital in certain areas of the market contracted. The impact to our Home and Insurance segments was much less substantial. We believe our three reportable segments have generally recovered from the impacts of the pandemic.
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Our personal loan product experiences less consumer demand during the fourth and first quarters of each year. We also anticipate less consumer demand for credit cards in the fourth quarter of each year, and we anticipate higher consumer demand for deposit accounts in the first quarter of each year.
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Most of our selling and marketing expenses are variable costs that we adjust dynamically in relation to revenue opportunities to profitably meet demand. Thus, as our revenue was negatively impacted during the recession, our marketing expenses generally decreased in line with revenue.
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We ceased offering reverse mortgage loans on our marketplace in the fourth quarter of 2022. Our Insurance segment consists of insurance quote products and insurance policies in our agency businesses. Revenue within the “other” category below includes revenue from the resale of online advertising space to third parties. We ceased reselling online advertising space during the first quarter of 2020.
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For the years ended December 31, 2022 and 2021, no Network Partners accounted for more than 10% of total consolidated revenue. For the year ended December 31, 2020, one Network Partner, Progressive Casualty Insurance, accounted for 15% of total consolidated revenue, all of which was recorded within our Insurance segment.
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We also offer consumers other mortgage products such as: • An alternative matching process, which provides them with lender contact information rather than conditional offers from Network Partners. • A “rate table” loan marketplace, where consumers can enter their loan and credit profile and dynamically view real-time rates or other relevant information from lenders without entering their contact information.
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We ceased offering matches to providers of reverse mortgage loans in the fourth quarter of 2022. In addition, we offer real estate brokerage services, through which consumers are matched with local realtors who can assist them in their home purchase or sale efforts.
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We generate revenue from the deposit account product from a consumer clicking from our website through to a financial institution's website.
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Other Products Other products not included in the Home, Consumer and Insurance segments included revenue earned through resale of online advertising space to third parties is also classified in other products. Effective in the first quarter of 2020, we no longer resell online advertising space.
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We anticipate revenue in our newer products, primarily within the Consumer segment, to be cyclical as well; however, we have limited historical data to predict the nature and magnitude of this cyclicality. Based on industry data, we anticipate that as our personal loan product matures we will experience less consumer demand during the fourth and first quarters of each year.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIncreases in interest rates driven by the Federal Reserve Board’s Federal Open Market Committee to combat a historically high rate of inflation may continue. Additional rate increases could pressure consumer demand for mortgage products, as well as our business, personal and credit card products, and thus, could negatively impact our business.
Biggest changeThese factors can affect the number of consumers applying for loans and overall loan approval rates, which can adversely affect our business. Increases in interest rates driven by the Federal Reserve Board’s Federal Open Market Committee to combat a historically high rate of inflation may continue or decreases in interest rates may be delayed.
Failure to maintain our reputation and brand recognition and attract and retain consumers in a cost-effective manner could materially and adversely affect our business, financial condition and results of operations. As such, adverse publicity from litigation or governmental investigations could impact our business and financial condition and results of operations.
Failure to maintain our reputation and brand recognition and attract and retain consumers in a cost-effective manner could materially and adversely affect our business and results of operations. As such, adverse publicity from litigation or governmental investigations could impact our business and financial condition and results of operations.
Additionally, the lending products our Network partners offer within our Home and Consumer segments are dependent upon, among other things, overall level of interest rates, home prices, availability of credit in the financial market and changes in underwriting standards.
Additionally, the lending products our Network partners offer within our Home and Consumer segments are dependent upon, among other things, the overall level of interest rates, home prices, availability of credit in the financial market and changes in underwriting standards.
Some of the factors that could negatively affect the price of our common stock or result in fluctuations in the price or trading volume of our common stock include: • our ability to attract new customers and retain existing customers; • the timing and success of introductions of new products and services; • rapid technological change, frequent new product introductions and evolving industry standards; • variations in our quarterly operating and financial results or our projected operating and financial results; • failure to meet analysts' earnings estimates; • publication of research reports about us, our Network Partners or our industry; • additions or departures of key management personnel; • adverse market reaction to any indebtedness we may incur or preferred or common stock we may issue in the future; • actions by stockholders, including “activist” investors; • changes in market valuations of other companies in our industry, including our Network Partners and competitors; 27 Table of Contents • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; • increased competition from one or more large, well-established technology companies; • systems, data center, website and internet failures, breaches and service interruptions; • speculation in the press or investment community, including the short selling of our common stock; • changes or proposed changes in laws or regulations affecting our industry or enforcement of these laws and regulations, or announcements relating to these matters; • threatened or actual ligation; • loss of key employees; and • changes in general economic or market conditions.
Some of the factors that could negatively affect the price of our common stock or result in fluctuations in the price or trading volume of our common stock include: • our ability to attract new customers and retain existing customers; • the timing and success of introductions of new products and services; • rapid technological change, frequent new product introductions and evolving industry standards; • variations in our quarterly operating and financial results or our projected operating and financial results; • failure to meet analysts' earnings estimates; • publication of research reports about us, our Network Partners or our industry; • additions or departures of key management personnel; • adverse market reaction to any indebtedness we may incur or preferred or common stock we may issue in the future; • actions by stockholders, including “activist” investors; • changes in market valuations of other companies in our industry, including our Network Partners and competitors; • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; • increased competition from one or more large, well-established technology companies; • systems, data center, website and internet failures, breaches and service interruptions; • speculation in the press or investment community, including the short selling of our common stock; 27 Table of Contents • changes or proposed changes in laws or regulations affecting our industry or enforcement of these laws and regulations, or announcements relating to these matters; • threatened or actual ligation; • loss of key employees; and • changes in general economic or market conditions.
Even if we successfully acquire additional businesses or technologies, we may not achieve the anticipated benefits or synergies due to a number of factors, including, among others: • senior management’s attention may be diverted from the management of daily operations to the integration of the businesses acquired in the acquisition; • inability to generate sufficient revenue to offset acquisition costs; • inability to maintain relationships with customers and partners of the acquired business; • challenges maintaining quality and security standards consistent with our brand; • inability to achieve anticipated synergies or unanticipated difficulty with integration into our corporate culture; • the need to integrate or implement additional controls, procedures, and policies; • harm to our existing business relationships with business partners as a result of the acquisition; • use of substantial portions of our available cash or the incurrence of debt to consummate the acquisition; • inability to retain key employees of businesses acquired; • inability to fully integrate the businesses acquired; 15 Table of Contents • costs and expenses associated with any undisclosed or potential liabilities; • that the businesses acquired in the acquisition may not perform as well as anticipated; • adverse conditions in the economy may affect the lenders or insurance carriers or other customers of the acquired businesses and their willingness to issue new credit, write new policies or otherwise expand their businesses; • advertisers in the business verticals in which we or the acquired businesses operate may be unwilling to advertise on our websites or mobile applications; • increased competition and its effect on our or the acquired businesses' website traffic, click-through rates, submitted consumer requests, advertising rates, revenue, margins, and market share; • our ability to maintain brand recognition for both us and the acquired businesses and to effectively leverage the LendingTree brand with the newly acquired brands; • our ability to develop new products and services and enhance existing ones; and • assumed liabilities associated with the historical operations of the acquired businesses, including as a result of data privacy and security laws and regulations or security breaches.
Even if we successfully acquire additional businesses or technologies, we may not achieve the anticipated benefits or synergies due to a number of factors, including but not limited to: • senior management’s attention may be diverted from the management of daily operations to the integration of the businesses acquired in the acquisition; • inability to generate sufficient revenue to offset acquisition costs; • inability to maintain relationships with customers and partners of the acquired business; • challenges maintaining quality and security standards consistent with our brand; • inability to achieve anticipated synergies or unanticipated difficulty with integration into our corporate culture; • the need to integrate or implement additional controls, procedures, and policies; • harm to our existing business relationships with business partners as a result of the acquisition; • use of substantial portions of our available cash or the incurrence of debt to consummate the acquisition; • inability to retain key employees of businesses acquired; • inability to fully integrate the businesses acquired; • costs and expenses associated with any undisclosed or potential liabilities; • that the businesses acquired in the acquisition may not perform as well as anticipated; • adverse conditions in the economy may affect the lenders or insurance carriers or other customers of the acquired businesses and their willingness to issue new credit, write new policies or otherwise expand their businesses; • advertisers in the business verticals in which we, or the acquired businesses we operate, may be unwilling to advertise on our websites or mobile applications; • increased competition and its effect on our or the acquired businesses' website traffic, click-through rates, submitted consumer requests, advertising rates, revenue, margins, and market share; 15 Table of Contents • our ability to maintain brand recognition for both us and the acquired businesses and to effectively leverage the LendingTree brand with the newly acquired brands; • our ability to develop new products and services and enhance existing ones; and • assumed liabilities associated with the historical operations of the acquired businesses, including as a result of data privacy and security laws and regulations or security breaches.
Our Medicare and Property and Casualty insurance agency businesses employ a different business model than the rest of our businesses and are subject to unique risks because of our role in selling insurance policies direct to consumers. In that role, we act as agents of insurance carriers or of other insurance agents, known as uplines, that we contract with.
Our Property and Casualty insurance agency businesses employ a different business model than the rest of our businesses and are subject to unique risks because of our role in selling insurance policies direct to consumers. In that role, we act as agents of insurance carriers or of other insurance agents, known as uplines, that we contract with.
Many statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of data breaches involving certain personal information, which have in the past resulted from and may in the future result from, breaches experienced by us or our external service providers.
Many regulatory and statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of data breaches involving certain personal information, which have in the past resulted from, and may in the future result from, breaches experienced by us or our external service providers.
If we experience one or more ownership changes in the future as a result of future transactions in our stock, our ability to utilize NOLs could be limited. Our ability to use our NOLs was limited on an annual basis by the TCJA.
If we experience one or more ownership changes in the future as a result of future transactions in our stock, our ability to utilize NOLs could be limited. Our ability to use our federal NOLs was limited on an annual basis by the TCJA.
Furthermore, if any free search engine traffic on which we rely begins charging fees for listing or placement, or if one or more of the search engines or other online sources on which we rely for purchased listings, modifies or terminates its relationship with us, our expenses could rise, we could lose customers, and traffic to our websites could decrease, all of which could have a material adverse effect on our business, financial condition and results of operations. 11 Table of Contents We rely on technology to operate our business and continue to implement substantial changes to our information systems.
Furthermore, if any free search engine traffic on which we rely begins charging fees for listing or placement, or if one or more of the search engines or other online sources on which we rely for purchased listings, modifies or terminates its relationship with us, our expenses could rise, we could lose customers, and traffic to our websites could decrease, all of which could have a material adverse effect on our business, financial condition and results of operations. 10 Table of Contents We rely on technology to operate our business and continue to implement substantial changes to our information systems.
As we manage through this change, we must effectively transition work, train, develop and motivate a large number of both existing and new employees, while maintaining the beneficial aspects of our company culture.
As we manage through this change, we must effectively transition work and train, develop and motivate a large number of both existing and new employees, all while maintaining the beneficial aspects of our company culture.
The success of our new products will depend on a number of factors, including, but not limited to: • implementing, at an acceptable cost, product features offered by our competitors and/or expected by consumers, lenders and lead purchasers; • market acceptance by consumers, lenders and lead purchasers; • offerings by current and future competitors; • our ability to attract and retain management and other skilled personnel for these businesses; 14 Table of Contents • our ability to collect amounts owed to us from third parties; • our ability to develop successful and cost-effective marketing campaigns; and • our ability to timely adjust marketing expenditures in relation to changes in demand for the underlying products and services offered by our Network Partners.
The success of our new products will depend on a number of factors, including, but not limited to: • implementing, at an acceptable cost, product features offered by our competitors and/or expected by consumers, lenders and lead purchasers; • market acceptance by consumers, lenders and lead purchasers; • offerings by current and future competitors; • our ability to attract and retain management and other skilled personnel for these businesses; • our ability to collect amounts owed to us from third parties; • our ability to develop successful and cost-effective marketing campaigns; and • our ability to timely adjust marketing expenditures in relation to changes in demand for the underlying products and services offered by our Network Partners.
After we complete an acquisition, the following factors could result in material charges and adversely affect our operating results and may adversely affect our cash flows: • costs incurred to combine the operations of companies we acquire, such as transitional employee expenses and employee retention or relocation expenses; • impairment of goodwill or intangible assets; 31 Table of Contents • a reduction in the useful lives of intangible assets acquired; • impairment of long-lived assets; • identification of, or changes to, assumed contingent liabilities; • changes in the fair value of any contingent consideration; • charges to our operating results due to duplicative pre-merger activities; • charges to our operating results from expenses incurred to effect the acquisition; and • charges to our operating results due to the expensing of certain stock awards assumed in an acquisition.
After we complete an acquisition, the following factors could result in material charges and adversely affect our operating results and may adversely affect our cash flows: • costs incurred to combine the operations of companies we acquire, such as transitional employee expenses and employee retention or relocation expenses; • impairment of goodwill or intangible assets; • a reduction in the useful lives of intangible assets acquired; • impairment of long-lived assets; • identification of, or changes to, assumed contingent liabilities; • changes in the fair value of any contingent consideration; • charges to our operating results due to duplicative pre-merger activities; • charges to our operating results from expenses incurred to effect the acquisition; and • charges to our operating results due to the expensing of certain stock awards assumed in an acquisition.
See the information included under the heading “Cautionary Statement Regarding Forward-Looking Information” included elsewhere in this annual report. Risks Related to our Business Adverse conditions in the primary and secondary mortgage markets, as well as the general economy, could have a material adverse effect on our business, financial condition and results of operations.
See the information included under the heading “Cautionary Statement Regarding Forward-Looking Information” included elsewhere in this annual report. Risks Related to our Business Adverse conditions in the primary and secondary mortgage markets, as well as the general economy, have had and could continue to have a material adverse effect on our business, financial condition and results of operations.
In such a scenario, the lenders could exercise their lien on the pledged collateral, which would have a material adverse effect on our business, operations, financial condition and liquidity. For additional information on the Credit Facility, see Note 16—Debt, in the notes to the consolidated financial statements included elsewhere in this annual report.
In such a scenario, the lenders could exercise their lien on the pledged collateral, which would have a material adverse effect on our business, operations, financial condition and liquidity. For additional information on the Credit Facility, see Note 15—Debt, in the notes to the consolidated financial statements included elsewhere in this annual report.
In addition, the Credit Facility contains certain restrictions on our ability to pay dividends. See Note 16—Debt, in the notes to the consolidated financial statements included elsewhere in this annual report. The declaration, payment and amount of future cash dividends, if any, will be at the discretion of our board of directors.
In addition, the Credit Facility contains certain restrictions on our ability to pay dividends. See Note 15—Debt, in the notes to the consolidated financial statements included elsewhere in this annual report. The declaration, payment and amount of future cash dividends, if any, will be at the discretion of our board of directors.
We have been granted one U.S. patent and own one provisional U.S. patent and from time to time we may have patent applications pending with the USPTO and various foreign patent authorities for various proprietary technologies and other inventions. The status of any patent involves complex legal and factual questions, and the breadth of claims allowed is uncertain.
We have been granted one U.S. patent and from time to time we may have patent applications pending with the USPTO and various foreign patent authorities for various proprietary technologies and other inventions. The status of any patent involves complex legal and factual questions and the breadth of claims allowed is uncertain.
Breaches or failures of security involving our systems or website or those of any of our affiliates, Network Partners or external service providers have occurred in the past and may occur in the future, and have in the past resulted in, and could in the future result in, the theft, unauthorized access, acquisition, use, disclosure, modification or misappropriation of personal information of our consumers, employees or third parties with whom we conduct business, or other confidential, proprietary and sensitive data, fraudulent activity, or system disruptions or shutdowns.
Breaches or failures of security involving our systems or website or those of any of our affiliates, Network Partners or external service providers have occurred 18 Table of Contents in the past and may occur in the future, and have in the past resulted in, and could in the future result in, the theft, unauthorized access, acquisition, use, disclosure, modification or misappropriation of personal information of our consumers, employees or third parties with whom we conduct business, or other confidential, proprietary and sensitive data, fraudulent activity, or system disruptions or shutdowns.
From when we became a publicly-traded company to as of December 31, 2022, the price per share of our common stock has fluctuated from an intraday low of $1.42 per share to an intraday high of $434.94 per share. The market price of our common stock may fluctuate or decline significantly in the future.
From when we became a publicly-traded company to as of December 31, 2023, the price per share of our common stock has fluctuated from an intraday low of $1.42 per share to an intraday high of $434.94 per share. The market price of our common stock may fluctuate or decline significantly in the future.
Network Partners can offer loans, insurance and other financial products directly to consumers through their own marketing campaigns or other traditional methods of distribution, such as referral arrangements, physical store-front operations or broker 10 Table of Contents agreements.
Network Partners can offer loans, insurance and other financial products directly to consumers through their own marketing 9 Table of Contents campaigns or other traditional methods of distribution, such as referral arrangements, physical store-front operations or broker agreements.
We are dependent on the use of technology systems like our MyLendingTree platform as well as backend systems to support our strategic objectives. Implementation and integration of complex systems and technology present significant challenges in terms of costs, human resources, and development of effective internal controls.
We are dependent on the use of technology systems like our Spring platform as well as backend systems to support our strategic objectives. Implementation and integration of complex systems and technology present significant challenges in terms of costs, human resources, and development of effective internal controls.
In addition, if our practices are not consistent, or viewed as not consistent, with legal and regulatory requirements, including changes in laws, regulations and standards or new interpretations or applications of existing laws, regulations and standards, we may also become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, or severe criminal or civil sanctions, all of which may affect our financial condition, operating results and our reputation.
In addition, if our practices are not consistent, or viewed as not 22 Table of Contents consistent, with legal and regulatory requirements, including changes in laws, regulations and standards or new interpretations or applications of existing laws, regulations and standards, we may also become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, or severe criminal or civil sanctions, all of which may affect our financial condition, operating results and our reputation.
Our QuoteWizard business poses risks for our ongoing operations, including, among others: • adverse conditions in the economy may affect insurance carriers and their willingness to issue policies; • covered losses among insurance carriers may increase beyond normal and budgeted levels which could cause a reduction in demand for leads; • insurance carriers and other advertisers in the business verticals in which we or QuoteWizard operate may be unwilling to advertise on our or QuoteWizard’s websites or mobile applications; • concentration of customers with large insurance carriers, causing significant budget reductions from these customers to impact our business; • major publishers may determine they no longer want QuoteWizard as an advertising partner; • changes in underwriting approval rates by insurance carrier customers; • increased competition and its effect on our or QuoteWizard’s website traffic, click-through rates, advertising rates, revenue, margins, and market share; • the cost of media may rise at a faster pace than QuoteWizard's monetization of traffic; • ability to provide competitive service to insurance carriers and to consumers using QuoteWizard’s and our online offerings and other platforms; • insurance carriers may determine that the online digital marketing channel is no longer a viable marketing platform for generating new insurance customers; • government regulatory agencies may hinder or disallow the operation of QuoteWizard's marketplace; • new government regulations and/or laws that affect the ability of private insurance carriers to market products directly to the consumer; • new government regulations and/or laws that would replace private insurance programs with government run programs; • our ability to maintain brand recognition for both LendingTree and QuoteWizard and to effectively leverage the LendingTree brand with the QuoteWizard brand; • our ability to develop new products and services and enhance existing ones; • our ability to retain key employees of QuoteWizard; • costs and expenses associated with any undisclosed or potential liabilities; • that the business acquired in the acquisition may not continue to perform as well as anticipated; and • assumed liabilities associated with QuoteWizard’s historical operations, including liabilities arising from data privacy and security laws and regulations or security breaches.
Our QuoteWizard business poses risks for our ongoing operations, including, but not limited to: • adverse conditions in the economy may affect insurance carriers and their willingness to issue policies; • covered losses among insurance carriers may increase beyond normal and budgeted levels which could cause a reduction in demand for leads; • insurance carriers and other advertisers in the business verticals in which we or QuoteWizard operate may be unwilling to advertise on our or QuoteWizard’s websites or mobile applications; • concentration of customers with large insurance carriers may cause significant budget reductions from these customers and may impact our business; • major publishers may determine they no longer want QuoteWizard as an advertising partner; • changes in underwriting approval rates by insurance carrier customers; • increased competition and its effect on our or QuoteWizard’s website traffic, click-through rates, advertising rates, revenue, margins, and market share; • the cost of media may rise at a faster pace than QuoteWizard's monetization of traffic; • ability to provide competitive service to insurance carriers and to consumers using QuoteWizard’s and our online offerings and other platforms; • insurance carriers may determine that the online digital marketing channel is no longer a viable marketing platform for generating new insurance customers; • government regulatory agencies may hinder or disallow the operation of QuoteWizard's marketplace; • new government regulations and/or laws that affect the ability of private insurance carriers to market products directly to the consumer; • new government regulations and/or laws that would replace private insurance programs with government run programs; • our ability to maintain brand recognition for both LendingTree and QuoteWizard and to effectively leverage the LendingTree brand with the QuoteWizard brand; • our ability to develop new products and services and enhance existing ones; • our ability to retain key employees of QuoteWizard; 12 Table of Contents • costs and expenses associated with any undisclosed or potential liabilities; • that the business acquired in the acquisition may not continue to perform as well as anticipated; and • ongoing operating risks, including liabilities arising from data privacy and security laws and regulations or security breaches.
Business—Seasonality included elsewhere in this annual report for more information. Any of these seasonal trends, or the combination of them, may negatively impact the price of our common stock. The conditional conversion feature of our outstanding convertible senior notes, if triggered, may adversely affect our financial condition and operating results.
Business—Seasonality included elsewhere in this annual report for more information. Any of these seasonal trends, or the combination of them, may negatively impact the price of our common stock. 29 Table of Contents The conditional conversion feature of our outstanding convertible senior notes, if triggered, may adversely affect our financial condition and operating results.
Some countries, including India, also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of delivering our products and services.
Some countries also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of delivering our products and services.
These matters could involve claims for substantial amounts of money or for other relief that might necessitate changes to our business or operations. The 25 Table of Contents defense of these actions has been, and will likely continue to be, both time consuming and expensive, and the outcomes of these actions cannot be predicted with certainty.
These matters could involve claims for substantial amounts of money or for other relief that might necessitate changes to our business or operations. The defense of these actions has been, and will likely continue to be, both time consuming and expensive, and the outcomes of these actions cannot be predicted with certainty.
The extent to which the COVID-19 pandemic or any widespread public health issue impacts our business, financial condition and results of operations, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted.
The extent to which the COVID-19 pandemic or any widespread public health issue impacts our business, financial condition 13 Table of Contents and results of operations, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted.
Our credit card product offering is subject to particular risks. • adverse conditions in the economy may affect credit card issuers and their willingness to issue new credit; • credit losses among credit card issuers may increase beyond normal and budgeted levels which could cause a reduction in demand; • interest rate increases may make balance transfer cards less profitable for issuers; • credit card issuers and other advertisers in the business verticals in which we operate may be unwilling to advertise on our websites or mobile applications; • changes in application approval rates by credit card issuer customers; • increased competition and its effect on our website traffic, click-through rates, advertising rates, revenue, margins, and market share; • ability to provide competitive service to credit card issuers and to consumers using our online offerings and other platforms; • credit card issuers may determine that the online digital marketing channel is no longer a viable marketing platform for generating new credit card customers; • decreases in consumer interest in credit card products; • our ability to maintain brand recognition for both LendingTree and CompareCards and to effectively leverage the LendingTree brand with the CompareCards brand; and • our ability to develop new products and services and enhance existing ones.
Our credit card product offering is subject to particular risks, including, but not limited to: • adverse conditions in the economy may affect credit card issuers and their willingness to issue new credit which would negatively affect revenue; • credit losses among credit card issuers may increase beyond normal and budgeted levels which could cause a reduction in credit card issuers' ability to extend credit; • interest rate increases may make balance transfer cards less profitable for issuers; • credit card issuers and other advertisers in the business verticals in which we operate may be unwilling to advertise on our websites or mobile applications; • changes in application approval rates by credit card issuer customers; • increased competition and its effect on our website traffic, click-through rates, advertising rates, revenue, margins, and market share; • our ability to provide competitive service to credit card issuers and to consumers using our online offerings and other platforms; • credit card issuers may determine that the online digital marketing channel is no longer a viable marketing platform for generating new credit card customers; • decreases in consumer interest in credit card products; • our ability to maintain brand recognition for both LendingTree and CompareCards and to effectively leverage the LendingTree brand with the CompareCards brand; and • our ability to develop new products and services and enhance existing ones.
If our credit card product is impacted by the risks described above, then our results of operations and future growth prospects could be materially and adversely affected. Economic conditions, including changes in the consumer lending and insurance markets could harm our business, financial condition and results of operations.
If our credit card product is impacted by the risks described above, then our results of operations and future growth prospects could be materially and adversely affected. 11 Table of Contents Economic conditions, including changes in the consumer lending and insurance markets could harm our business, financial condition and results of operations.
While we strive to protect our trademarks, service marks and domain names, effective trademark protection may not be available, and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or be registered, even if available.
While we strive to protect our trademarks, service marks and domain names, effective trademark protection may not 24 Table of Contents be available and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or be registered, even if available.
In addition, the Credit Facility contains customary affirmative and negative covenants, including, subject to certain exceptions, restrictions on our ability to, among other things: • incur additional indebtedness; • grant liens; • make loans and investments; • enter into mergers or make certain fundamental changes; • make certain restricted payments, including dividends, distributions, stock repurchases or redemptions; • sell assets; • enter into transactions with affiliates; and 17 Table of Contents • enter into restrictive transactions.
In addition, the Credit Facility contains customary affirmative and negative covenants, including, subject to certain exceptions, restrictions on our ability to, among other things: • incur additional indebtedness; • grant liens; • make loans and investments; • enter into mergers or make certain fundamental changes; • make certain restricted payments, including dividends, distributions, stock repurchases or redemptions; • sell assets; • enter into transactions with affiliates; and • enter into restrictive transactions.
While we currently maintain cybersecurity insurance, such insurance may not be sufficient in type or amount to cover us against claims related to breaches, failures or other data security-related incidents, and we cannot be certain that cyber insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to 19 Table of Contents any future claim.
While we currently maintain cybersecurity insurance, such insurance may not be sufficient in type or amount to cover us against claims related to breaches, failures or other data security-related incidents, and we cannot be certain that cyber insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
Under GAAP, when we acquire businesses, we allocate the purchase price to tangible assets and liabilities and identifiable intangible assets acquired at their acquisition date fair values. Any residual purchase price is recorded as goodwill. We also estimate the fair value of any contingent consideration.
Under GAAP, when we acquire businesses, we allocate the purchase price to tangible assets and liabilities and identifiable intangible assets acquired at their acquisition date fair values. Any residual purchase price is recorded as goodwill. We also 31 Table of Contents estimate the fair value of any contingent consideration.
There can be no assurance that the Internet’s infrastructure will continue to be able to support the demands placed on it by sustained growth in the number of users and amount of traffic. To the extent that the Internet’s infrastructure is unable to support the demands placed on it, our business may be impacted.
There can be no assurance that the Internet’s infrastructure will continue to be able to support the demands placed on it by sustained growth in the number of users and amount of traffic. To the extent that the Internet’s infrastructure is unable to support the demands placed on it, our business may 26 Table of Contents be impacted.
Although our existing Credit Facility limits our ability to incur additional 30 Table of Contents indebtedness, these restrictions are subject to a number of qualifications and exceptions and may be amended with the consent of our lenders. Accordingly, under certain circumstances, we may incur substantial additional debt.
Although our existing Credit Facility limits our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and may be amended with the consent of our lenders. Accordingly, under certain circumstances, we may incur substantial additional debt.
The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of certain personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation.
The CCPA provides for civil penalties for violations, as 21 Table of Contents well as a private right of action for certain data breaches that result in the loss of certain personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation.
The GLBA also imposes requirements regarding the safeguarding and proper destruction of 21 Table of Contents personal information through the issuance of data security standards or guidelines. In addition, many states in which we operate have laws that protect the privacy and security of personal information.
The GLBA also imposes requirements regarding the safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines. In addition, many states in which we operate have laws that protect the privacy and security of personal information.
However, we may not be aware or we may disagree that our products or services are infringing, misappropriating or otherwise violating third-party intellectual property rights and such third parties may bring claims alleging such infringement, misappropriation or violation. Lawsuits are often time-consuming and expensive to resolve and they may divert management’s time and attention.
However, we may not be aware or we may disagree that our products or services 23 Table of Contents are infringing, misappropriating or otherwise violating third-party intellectual property rights and such third parties may bring claims alleging such infringement, misappropriation or violation. Lawsuits are often time-consuming and expensive to resolve and they may divert management’s time and attention.
Our amended and restated certificate of incorporation and/or bylaws include provisions that: • authorize our board of directors to issue, without further action by our stockholders, up to five million shares of undesignated preferred stock, sometimes referred to as “blank check preferred”; • prohibit cumulative voting in the election of directors; • provide that vacancies on our board of directors may be filled only by the affirmative vote of a majority of directors then in office or by the sole remaining director; • provide that only our board of directors may change the size of our board of directors; • specify that special meetings of our stockholders may be called only by or at the direction of our board of directors or by a person specifically designated with such authority by the board; and • prohibit stockholders from taking action by written consent.
Our amended and restated certificate of incorporation and/or bylaws include provisions that: 28 Table of Contents • authorize our board of directors to issue, without further action by our stockholders, up to 5,000,000 shares of undesignated preferred stock, sometimes referred to as “blank check preferred”; • prohibit cumulative voting in the election of directors; • provide that vacancies on our board of directors may be filled only by the affirmative vote of a majority of directors then in office or by the sole remaining director; • provide that only our board of directors may change the size of our board of directors; • specify that special meetings of our stockholders may be called only by or at the direction of our board of directors or by a person specifically designated with such authority by the board; and • prohibit stockholders from taking action by written consent.
In certain historical periods, broader cyclical trends in interest rates, as well as the mortgage and real estate markets, have upset the customary seasonal 29 Table of Contents trends. Our Consumer and Insurance segments also have certain products with various seasonality trends which may create further uncertainty in our quarterly operating results. See Item 1.
In certain historical periods, broader cyclical trends in interest rates, as well as the mortgage and real estate markets, have upset the customary seasonal trends. Our Consumer and Insurance segments also have certain products with various seasonality trends which may create further uncertainty in our quarterly operating results. See Item 1.
Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such 24 Table of Contents defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights.
Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights.
A significant portion of our total revenue has, in the past, been derived from one Network Partner, and our results of operations could be adversely affected and stockholder value harmed if we lose significant business from this Network Partner.
A significant portion of our total revenue has, in the past, been derived from one Network Partner, and our results of operations could be adversely affected if we lose significant business from this Network Partner.
Insurance carriers could increase premiums to the point where we cannot profitably sell policies or consumers make the decision to forego the purchase of insurance.
Insurance carriers could increase premiums to the point where we cannot profitably sell policies or consumers forego the purchase of insurance.
We have adopted appropriate policies and procedures to address these requirements (such as appropriate consumer disclosures and call scripting, call monitoring and other quality assurance and compliance measures), but it is not possible to ensure that all employees comply with our policies and procedures at all times.
We have adopted appropriate policies and procedures to address these requirements (such as appropriate consumer 20 Table of Contents disclosures and call scripting, call monitoring and other quality assurance and compliance measures), but it is not possible to ensure that all employees comply with our policies and procedures at all times.
One holder of our common stock owns a substantial portion of our outstanding common stock, which concentrates voting control and limits your ability to influence corporate matters. As of February 27, 2023, Douglas Lebda, our Chairman and Chief Executive Officer, beneficially owned approximately 21% of our outstanding common stock. Additionally, Mr.
One holder of our common stock owns a substantial portion of our outstanding common stock, which concentrates voting control and limits your ability to influence corporate matters. As of February 28, 2024, Douglas Lebda, our Chairman and Chief Executive Officer, beneficially owned approximately 21% of our outstanding common stock. Additionally, Mr.
For example, the California Consumer Privacy Act (the “CCPA”) requires covered companies to, among other things, provide certain disclosures to California residents and provide such residents with certain data protection and privacy rights, including the ability to opt-out of certain sales of personal information.
For example, the California Consumer Privacy Act (the “CCPA”), as amended by the California Privacy Rights Act ("CPRA"), requires covered companies to, among other things, provide certain disclosures to California residents and provide such residents with certain data protection and privacy rights, including the ability to opt-out of certain sales of personal information.
Constraints in the primary and secondary mortgage markets in the past have had, and may in the future have, an adverse effect on our business, financial condition and results of operations.
Constraints in the primary and secondary mortgage markets in the past have had, and may continue to have, an adverse effect on our business, financial condition and results of operations.
We have incurred operating losses from continuing operations at times in our history, and we have an accumulated deficit of $715.3 million at December 31, 2022. If we fail to maintain or grow our revenue and manage our expenses, we may incur significant losses in the future and not be able to maintain or increase our profitability.
We have incurred operating losses from continuing operations at times in our history and we have an accumulated deficit of $837.7 million at December 31, 2023. If we fail to maintain or grow our revenue and manage our expenses, we may incur significant losses in the future and not be able to maintain or increase our profitability.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2022, we had pre-tax consolidated federal net operating losses (“NOLs”) of $187.9 million. The federal NOLs no longer expire under the Tax Cuts and Jobs Act (“TCJA”).
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2023, we had pre-tax consolidated federal net operating losses (“NOLs”) of $139.0 million. The federal NOLs no longer expire under the Tax Cuts and Jobs Act (“TCJA”).
Our NOLs will be available to offset taxable income subject to the limitations found in Internal Revenue Code Sections 382 and 383. In addition, we have state NOLs of approximately $517.0 million at December 31, 2022, some of which will expire at various times between 2023 and 2042. The state NOLs could expire before we are able to utilize them.
Our NOLs will be available to offset taxable income subject to the limitations found in Internal Revenue Code Sections 382 and 383. In addition, we have state NOLs of approximately $466.4 million at December 31, 2023, some of which will expire at various times between 2024 and 2043. The state NOLs could expire before we are able to utilize them.
During the years ended December 31, 2022 and 2021, we purchased 379,895 and 334,253 shares of our common stock, respectively, for $43.0 million and $40.0 million, respectively. At December 31, 2022, $96.7 million remains authorized for share repurchase.
There were no repurchases during the year ended December 31, 2023. During the years ended December 31, 2022 and 2021, we purchased 379,895 and 334,253 shares of our common stock, respectively, for $43.0 million and $40.0 million, respectively. At December 31, 2023, $96.7 million remains authorized for share repurchase.
The Credit Facility requires us to pledge as collateral, subject to certain customary exclusions, substantially all of our assets. The obligations under this facility are unconditionally guaranteed, subject to certain customary exclusions, on a senior basis by our material domestic subsidiaries, which guaranties are secured, subject to certain customary exclusions, by substantially all of each such guarantor's assets.
The Credit Facility requires us to pledge as collateral, subject to certain customary exclusions, substantially all of our assets. The obligations under this facility are unconditionally guaranteed, subject to certain customary exclusions, on a senior basis by our material domestic subsidiaries.
We could 13 Table of Contents also lose appointments with carriers or uplines that affect our ability to sell policies and generate revenue.
We could also lose appointments with carriers or uplines that affect our ability to sell policies and generate revenue.
Lebda holds options to purchase up to 485,942 shares of our common stock that are not included in beneficial ownership because Mr. Lebda does not have the right to acquire them within 60 days of February 27, 2023. If these options were exercisable, they would represent additional beneficial ownership of approximately 3% of our outstanding common stock.
Lebda holds options to purchase up to 426,392 shares of our common stock that are not included in beneficial ownership because Mr. Lebda does not have the right to acquire them within 60 days of February 28, 2024. If these options were exercisable, they would represent additional beneficial ownership of approximately 2% of our outstanding common stock.
We do not intend to pay any cash dividends on our common stock in the foreseeable future. We have not declared or paid a cash dividend on our common stock during the nine most recent fiscal years. We have no current intention to declare or pay cash dividends on our common stock in the foreseeable future.
We do not intend to pay any cash dividends on our common stock in the foreseeable future. We have not declared or paid a cash dividend on our common stock in over ten years. We have no current intention to declare or pay cash dividends on our common stock in the foreseeable future.
During 2021 and 2020, we incurred $(8.2) million and $5.3 million, respectively, of contingent consideration expense due to the change in estimated fair value of the earnout payments. ITEM 1B. Unresolved Staff Comments Not applicable.
During 2021, we incurred $8.2 million of contingent consideration income due to the change in estimated fair value of the earnout payments. ITEM 1B. Unresolved Staff Comments Not applicable.
Further, as mandated by the federal Secure and Fair Enforcement of Mortgage Licensing Act of 2008 (the “SAFE Act”), states adopted certain minimum standards for the licensing of individuals involved in mortgage lending or loan brokering.
Further, as mandated by the federal Secure and Fair Enforcement of Mortgage Licensing Act of 2008 (the “SAFE Act”), states adopted certain minimum standards for the licensing of individuals involved in mortgage lending or loan brokering. States also require licenses to undertake certain insurance brokerage activities.
The program could affect the trading price of our stock and increase volatility, and any announcement of a termination or change of this program may result in a decrease in the trading price of our stock. In addition, any purchases made under this program may diminish our cash reserves.
Our ability to repurchase stock is limited by our Credit Facility. The program could affect the trading price of our stock and increase volatility, and any announcement of a termination or change of this program may result in a decrease in the trading price of our stock. In addition, any purchases made under this program may diminish our cash reserves.
If the QuoteWizard business is impacted by the risks described above, then our results of operations and future growth prospects could be materially and adversely affected. Our insurance agency businesses pose unique risks.
If the QuoteWizard business is impacted by the risks described above, then our results of operations and future growth prospects could be materially and adversely affected. Our insurance agency businesses pose unique risks that may have a material adverse impact on our results of operations.
Any concerns about our data privacy and security practices, even if unfounded, could damage the reputation of our businesses, discourage potential users from our products and services and have a material and adverse impact on our business, financial condition and results of operations. 22 Table of Contents Any failure or perceived failure by us or our Network Partners or external service providers to comply with our posted privacy policies or with any applicable federal, state or foreign laws, regulations, standards, certifications or orders relating to data privacy or security or consumer protection, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure, or misappropriation of personal information or other user data, could result in fines or proceedings or litigation by governmental agencies or consumers, including class action privacy litigation in certain jurisdictions, which would subject us to significant awards, penalties or judgments, one or all of which could materially and adversely affect our business, financial condition and results of operations.
Any failure or perceived failure by us or our Network Partners or external service providers to comply with our posted privacy policies or with any applicable federal, state or foreign laws, regulations, standards, certifications or orders relating to data privacy or security or consumer protection, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure, or misappropriation of personal information or other user data, could result in fines or proceedings or litigation by governmental agencies or consumers, including class action privacy litigation in certain jurisdictions, which would subject us to significant awards, penalties or judgments, one or all of which could materially and adversely affect our business, financial condition and results of operations.
Risks Related to an Investment in our Common Stock Fluctuations in our operating results, quarter to quarter earnings and other factors may result in significant decreases in the price of our common stock. The market price for our common stock has been volatile, as the trading volume has fluctuated and may continue to fluctuate, causing significant price variations to occur.
Risks Related to an Investment in our Common Stock Fluctuations in our operating results, quarter-to-quarter earnings and other factors may result in significant decreases in the price of our common stock. The market price for our common stock has been volatile.
Economic factors such as increased interest rates, slow economic growth or recessionary conditions, the pace of home price appreciation or outright depreciation, changes in household debt levels, and increased unemployment or stagnant or 12 Table of Contents declining wages can affect the lending markets broadly.
Economic factors such as increased interest rates, slow economic growth or recessionary conditions, the pace of home price appreciation or outright depreciation, changes in household debt levels, and increased unemployment or stagnant or declining wages can affect the lending markets broadly. National or global events, such as the COVID-19 pandemic, can also affect such macroeconomic conditions.
We believe our success has depended, continues to and in the future will depend, on the efforts and talents of our management team and our highly skilled employees and workers, including our software engineers, analysts, marketing 16 Table of Contents professionals and sales staff.
We believe our success has depended, continues to depend and in the future will depend on the efforts and talents of our management team and our highly skilled employees and workers, including our software engineers, analysts, marketing professionals and sales staff. Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees.
As a result, our businesses have been and remain subject to a variety of laws, rules, regulations, statutes, standards, policies and procedures in various jurisdictions in the United States and abroad, which are subject to change at any time.
We market and provide services in heavily regulated industries through a number of different channels across the United States. As a result, our businesses have been and remain subject to a variety of laws, rules, regulations, statutes, standards, policies and procedures in various jurisdictions in the United States and abroad, which are subject to change at any time.
As of December 31, 2022 and February 27, 2023, we have outstanding a $0.2 million letter of credit under the Revolving Facility. As of December 31, 2022 and February 27, 2023, we have $248.8 million borrowings outstanding under the Term Loan Facility.
As of December 31, 2023, we have outstanding a $0.2 million letter of credit under the Revolving Facility. As of December 31, 2023, we have $246.9 million borrowings outstanding under the Term Loan Facility.
Although for the years ended December 31, 2022 and 2021, no Network Partners accounted for more than 10% of total consolidated revenue, for the year ended December 31, 2020, one Network Partner accounted for 15% of total consolidated revenue, and this Network Partner remains a significant contributor to our total revenue.
Although for the years ended December 31, 2023, 2022 and 2021, no Network Partners accounted for more than 10% of total consolidated revenue, in the past, a significant portion of our total revenue has been derived from one Network Partner. This particular Network Partner remains a significant contributor to our total revenue.
Our business is dependent on the continued growth and maintenance of the Internet’s infrastructure, as well as our ability to market products through channels such as e-mail and voice and text messaging.
Changes in the regulation of the Internet, mobile carriers and their partners could negatively affect our business. Our business is dependent on the continued growth and maintenance of the Internet’s infrastructure, as well as our ability to market products through channels such as e-mail and voice and text messaging.
If we were to raise capital in the future by selling shares of our common stock, or securities that are convertible into our common stock or issuing shares of our common stock in a business acquisition, their issuance would have a dilutive effect on the percentage ownership of our stockholders and, depending on the prices at which such shares or convertible securities are sold or issued, on their investment in our common stock and, therefore, could have a material adverse effect on the market prices of our common stock. 28 Table of Contents Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by stockholders to replace or remove our management and affect the market price of our common stock.
If we were to raise capital in the future by selling shares of our common stock, or securities that are convertible into our common stock or issuing shares of our common stock in a business acquisition, their issuance would have a dilutive effect on the percentage ownership of our stockholders and, depending on the prices at which such shares or convertible securities are sold or issued, on their investment in our common stock and, therefore, could have a material adverse effect on the market prices of our common stock.
If the work is more challenging or time consuming than expected, then our business, financial condition and results of operations could be materially and adversely affected. 18 Table of Contents Breaches or failures of our systems or website security, the theft, unauthorized access, acquisition, use, disclosure, modification or misappropriation of personal information, the occurrence of fraudulent activity, or other data security-related incidents may have a material and adverse impact on our business, financial condition and results of operations.
Breaches or failures of our systems or website security, the theft, unauthorized access, acquisition, use, disclosure, modification or misappropriation of personal information, the occurrence of fraudulent activity, or other data security-related incidents may have a material and adverse impact on our business, financial condition and results of operations.
If an event of default occurs or if we otherwise fail to comply with any of the negative or affirmative covenants of the Credit Facility, the lenders may declare all of the obligations and indebtedness under such facility due and payable.
The guaranties are secured, subject to certain customary exclusions, by substantially all of each such guarantor's assets. 17 Table of Contents If an event of default occurs or if we otherwise fail to comply with any of the negative or affirmative covenants of the Credit Facility, the lenders may declare all of the obligations and indebtedness under such facility due and payable.
The occurrence of any actual or attempted breach, failure of security or fraudulent activity, the reporting of such an incident, whether accurate or not, or our failure to make adequate or timely disclosures to the public or law enforcement agencies following any such event, whether due to delayed discovery or a failure to follow existing protocols, could result in claims made against us or our affiliates, Network Partners or external service providers, which could result in state and/or federal litigation and related financial liabilities, as well as criminal penalties or civil liabilities, regulatory actions from state and/or federal governmental authorities, and significant fines, orders, sanctions, litigation and claims against us by consumers or third parties and related indemnification obligations.
The occurrence of any actual or attempted breach, failure of security or fraudulent activity, the reporting of such an incident, whether accurate or not, or our failure to make adequate or timely disclosures to the public or law enforcement agencies following any such event, whether due to delayed discovery or a failure to follow existing protocols, could result in claims made against us or our affiliates, Network Partners or external service providers.
We may need additional equity, debt or other financing in the future, which we may not be able to obtain on acceptable terms, or at all, and any additional financing may result in restrictions on our operations or substantial dilution to our stockholders.
This activity could cause or avoid an increase or a decrease in the market price of our common stock or the Notes. 30 Table of Contents We may need additional equity, debt or other financing in the future, which we may not be able to obtain on acceptable terms, or at all, and any additional financing may result in restrictions on our operations or substantial dilution to our stockholders.
Moreover, there could be public announcements regarding any data security-related incidents and any steps we take to respond to or remediate such incidents, and if securities analysts or investors perceive these announcements to be negative, it could, among other things, have a substantial adverse effect on the price of our common stock.
If securities analysts or investors perceive these announcements to be negative, it could, among other things, have a substantial adverse effect on the price of our common stock.
Some of our changes may have the effect of reducing our short-term revenue or profitability if we believe that the benefits will ultimately improve our financial performance over the long-term.
We are constantly striving to improve the user experience for our consumers who use our websites and applications and for our Network Partners. Some of our changes may have the effect of reducing our short-term revenue or profitability if we believe that the benefits will ultimately improve our financial performance over the long-term.
We diligently monitor and assess new regulatory guidance, enforcement actions and court interpretations of RESPA 20 Table of Contents as part of our ongoing compliance management program and devote substantial resources and management attention to regulatory compliance in light of such developments .
We diligently monitor and assess new regulatory guidance, enforcement actions and court interpretations of RESPA as part of our ongoing compliance management program and devote substantial resources and management attention to regulatory compliance in light of such developments . Various federal, state and, in some instances, local, laws also prohibit unfair, deceptive and abusive marketing and sales practices.
Additionally, increased regulation by the Bureau of Consumer Financial Protection (“CFPB”), the U.S. Federal Trade Commission (“FTC”) and Federal Communications Commission (“FCC”) has resulted in restrictions on our marketing activities.
Additionally, increased regulation by the Bureau of Consumer Financial Protection (“CFPB”), the U.S. Federal Trade Commission (“FTC”) and Federal Communications Commission (“FCC”) has resulted in restrictions on our marketing activities. Additional federal, state and in some instances, local laws regulate secured and unsecured lending, and insurance brokerage activities, which impacts our marketplace, partners and consumers.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material and adverse effect on our business, financial condition and results of operations.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material and adverse effect on our business, financial condition and results of operations. 19 Table of Contents Risks Related to Legal, Compliance and Regulation Failure to comply with past, existing or new laws, rules and regulations, or to obtain and maintain required licenses, could materially and adversely affect our business, financial condition and results of operations.
These laws generally regulate the manner in which lending and lending-related activities, and insurance brokerage activities, and solicitation activities related to registered investment advisors are marketed or made available, including advertising and other consumer disclosures, payments for services and record keeping requirements; these laws include RESPA, the Fair Credit Reporting Act, the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Housing Act and various state laws.
These laws generally regulate the manner in which lending and lending-related activities, as well as insurance brokerage activities, are marketed or made available, including advertising and other consumer disclosures, payments for services and record keeping requirements.
Our insurance business, QuoteWizard, is significant to our revenue, and operational issues in this business could have a material impact on our results of operations.
Additional rate increases could pressure consumer demand for mortgage products, as well as our business, personal and credit card products, and thus could negatively impact our business. Our insurance business, QuoteWizard, is significant to our revenue, and operational issues in this business could have a material impact on our results of operations.
Despite our current efforts, we cannot ensure that we will be able to retain the services of any members of our senior management or other key employees. If we do not succeed in attracting well-qualified employees or developing, retaining and motivating existing employees, our business and results of operations could be harmed.
Despite our current efforts, we cannot ensure that we will be able to retain the services of any members of our senior management or other key employees.
Violations of these laws could result in severe criminal or civil sanctions and financial penalties and other consequences that may have a material adverse effect on our business, reputation, financial condition or results of operations. 26 Table of Contents Changes in the regulation of the Internet, mobile carriers and their partners could negatively affect our business.
The FCPA also requires proper record keeping and characterization of such payments in our reports filed with the SEC. Violations of these laws could result in severe criminal or civil sanctions and financial penalties and other consequences that may have a material adverse effect on our business, reputation, financial condition or results of operations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. Properties Our principal executive offices are located on approximately 176,000 square feet of office space in Charlotte, North Carolina under a lease that expires in 2036.
Biggest changeITEM 2. Properties Our principal executive offices are located on approximately 161,000 square feet of office space in Charlotte, North Carolina under a lease that expires in 2036. Primarily as a result of our acquisitions in recent years, we also operate offices in: Charleston, South Carolina; Denver, Colorado; Seattle, Washington; Beachwood, Ohio; Ahmedabad, India; and Hyderabad, India.
The Consumer segment has personnel in the Charleston, Jacksonville, New York City, and Makarba offices. The Insurance segment has personnel in the Denver, New York City, Beachwood, and Seattle offices.
Our Charlotte operations support all three of our segments: Home, Consumer and Insurance. The Consumer segment has personnel in the Charleston, Ahmedabad and Hyderabad offices. The Insurance segment has personnel in the Denver, Beachwood, and Seattle offices.
Removed
Primarily as a result of our acquisitions in recent years, we also operate offices in: Charleston, South Carolina; Denver, Colorado; Jacksonville, Florida; New York City, New York; Seattle, Washington; Beachwood, Ohio; and Makarba, India. Our Charlotte operations support all three of our segments: Home, Consumer and Insurance.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 18 — Contingencies and Note 22—Discontinued Operations in the notes to the consolidated financial statements included elsewhere in this report for a discussion of our current and recently settled litigation. ITEM 4. Mine Safety Disclosures Not applicable. 32 Table of Contents PART II
Biggest changeSee Note 17 — Contingencies and Note 21—Discontinued Operations in the notes to the consolidated financial statements included elsewhere in this report for a discussion of our current and recently settled litigation. ITEM 4. Mine Safety Disclosures Not applicable. 33 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe are focused on developing new product offerings and enhancements to improve the experiences that consumers and Network Partners have as they interact with us. By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of revenue.
Biggest changeCustomers can track the progress of their financial health over time based on actions they have taken, see recommended credit score improvement actions, and loans or other products offered by LendingTree. We are focused on developing new product offerings and enhancements to improve the experience of consumers and Network Partners as they interact with us.
Convertible Senior Notes and Hedge and Warrant Transactions On July 24, 2020, we issued $575.0 million aggregate principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 and, in connection therewith, entered into Convertible Note Hedge and Warrant transactions with respect to our common stock.
Convertible Senior Notes and Hedge and Warrant Transactions On July 24, 2020, we issued $575.0 million aggregate principal amount of our 0.50% Convertible Senior Notes due July 15, 2025 (the "2025 Notes") and, in connection therewith, entered into Convertible Note Hedge and Warrant transactions with respect to our common stock.
Issuer Purchases of Equity Securities In each of February 2018 and February 2019, the board of directors authorized and we announced a stock repurchase program which allowed for the repurchase of up to $100.0 million and $150.0 million, respectively, of our common stock. Under this program, we can repurchase stock in the open market or through privately-negotiated transactions.
Issuer Purchases of Equity Securities In each of February 2018 and February 2019, the board of directors authorized, and we announced, a stock repurchase program that allowed for the repurchase of up to $100.0 million and $150.0 million, respectively, of our common stock. Under this program, we can repurchase stock in the open market or through privately-negotiated transactions.
Set forth below is a line graph, for the period from December 31, 2017 through December 31, 2022, comparing the cumulative total stockholder return of $100 invested (assuming that all dividends were reinvested) in (1) our common stock, (2) the cumulative return of all companies listed on the Nasdaq Composite Index and (3) the cumulative total return of the Research Development Group (“RDG”) Internet index.
Set forth below is a line graph, for the period from December 31, 2018 through December 31, 2023, comparing the cumulative total stockholder return of $100 invested (assuming that all dividends were reinvested) in (1) our common stock, (2) the cumulative return of all companies listed on the Nasdaq Composite Index and (3) the cumulative total return of the Research Development Group (“RDG”) Internet index.
(2) See the narrative disclosure above the table for further description of our publicly announced stock repurchase program. ITEM 6. [Reserved] 34 Table of Contents ITEM 7.
(2) See the narrative disclosure above the table for further description of our publicly announced stock repurchase program. ITEM 6. [Reserved] 35 Table of Contents ITEM 7.
We believe the consumer and small business financial services industry is still in the early stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established.
We believe the consumer and small business financial services industry is in the middle stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established.
The following table provides information about the Company's purchases of equity securities during the quarter ended December 31, 2022.
The following table provides information about the Company's purchases of equity securities during the quarter ended December 31, 2023.
During the quarter ended December 31, 2022, no shares of common stock were repurchased under the stock repurchase program. As of December 31, 2022 and February 21, 2023, approximately $96.7 million is authorized for future share repurchases.
During the quarter ended December 31, 2023, no shares of common stock were repurchased under the stock repurchase program. As of December 31, 2023 and February 23, 2024, approximately $96.7 million is authorized for future share repurchases.
On a full-year basis, 30-year mortgage interest rates increased to an average 5.33% in 2022, compared to 2.96% and 3.11% in 2021 and 2020, respectively. 36 Table of Contents Typically, as mortgage interest rates rise, there are fewer consumers in the marketplace seeking refinancings and, accordingly, the mix of mortgage origination dollars will move toward purchase mortgages.
On a full-year basis, 30-year mortgage interest rates increased to an average 6.80% in 2023, compared to 5.33% and 2.96% in 2022 and 2021, respectively. 37 Table of Contents Typically, as mortgage interest rates rise, there are fewer consumers in the marketplace seeking refinancings and, accordingly, the mix of mortgage origination dollars will move toward purchase mortgages.
Returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns. 33 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds During the year ended December 31, 2022, we did not issue or sell any shares of our common stock or other equity securities in transactions that were not registered under the Securities Act.
Returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns. 34 Table of Contents Recent Sales of Unregistered Securities During the year ended December 31, 2023, we did not issue or sell any shares of our common stock or other equity securities in transactions that were not registered under the Securities Act.
We have seen the most significant impact in our Home segment as mortgage rates have nearly doubled in 2022, causing a sharp decline in refinance volumes and more recent pressure on purchase activity.
We saw the most significant impact in our Home segment as mortgage rates nearly doubled in 2022, causing a sharp decline in refinance volumes and pressure on purchase activity.
During 2021, 30-year mortgage interest rates steadily increased from a monthly average of 2.74% in January 2021, ending at a monthly average of 3.10% in December 2021. During 2022, 30-year mortgage interest rates increased significantly from a monthly average of 3.45% in January 2022, ending at a monthly average of 6.36% in December 2022.
During 2022, 30-year mortgage interest rates increased significantly from a monthly average of 3.45% in January 2022, ending at a monthly average of 6.36% in December 2022.
The calculation of the metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts or investors. We continued to grow our user base and added 3.8 million new users in 2022, bringing cumulative sign-ups to 24.8 million at December 31, 2022.
The calculation of the metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts or investors. 38 Table of Contents We continued to grow our user base and added 3.4 million new users in 2023, bringing cumulative sign-ups to 28.2 million as of December 31, 2023.
During the quarter ended December 31, 2022, 3,732 shares were purchased related to these obligations under the LendingTree Seventh Amended and Restated 2008 Stock Plan. The withholding of those shares does not affect the dollar amount or number of shares that may be purchased under the stock repurchase program described above.
During the quarter ended December 31, 2023, 4,725 shares were purchased related to these obligations under the LendingTree 2023 Stock Plan. The withholding of those shares does not affect the dollar amount or number of shares that may be purchased under the stock repurchase program described above.
Looking forward, the MBA is projecting 30-year mortgage interest rates to decrease in 2023 to an average 5.2%. According to MBA projections, the mix of mortgage origination dollars is expected to continue to move towards purchase mortgages with the refinance share representing just 24% for 2023. The U.S.
Looking forward, the MBA is projecting 30-year mortgage interest rates to decrease in 2024 to an average of 6.1%. According to MBA projections, the mix of mortgage origination dollars is expected to remain primarily with purchase mortgages with the refinance share representing just 24% for 2024. The U.S.
Additionally, the LendingTree Seventh Amended and Restated 2008 Stock Plan approved by our stockholders on June 9, 2021 allows, and the LendingTree 2017 Inducement Grant Plan terminated by us in April 2021 allowed, employees to forfeit shares of our common stock to satisfy federal and state withholding obligations upon the exercise of stock options, the settlement of restricted stock unit awards and the vesting of restricted stock awards granted to those individuals under the plans.
Additionally, the LendingTree 2023 Stock Plan and LendingTree 2023 Inducement Grant Plan, approved by our stockholders on June 21, 2023, allows employees to forfeit shares of our common stock to satisfy federal and state withholding obligations upon the exercise of stock options, the settlement of restricted stock unit awards and the vesting of restricted stock awards granted to those individuals under the plans.
Total refinance original dollars decreased to 30% of total mortgage origination dollars in 2022 due to the increase in average mortgage interest rates. Total refinance origination dollars decreased by 11% in 2021 over 2020 and 74% in 2022 over 2021. Industry-wide mortgage origination dollars decreased by 3% in 2021 over 2020 and 49% in 2022 over 2021.
Total refinance original dollars decreased further to 19% of total mortgage origination dollars in 2023 due to the increase in average mortgage interest rates. Total refinance origination dollars decreased by 74% in 2022 over 2021 and 54% in 2023 over 2022. Industry-wide mortgage origination dollars decreased by 49% in 2022 over 2021 and 29% in 2023 over 2022.
A portion of this was used to pay the outstanding balance of $169.7 million and interest on our 0.625% Convertible Senior Notes that matured on June 1, 2022. The remaining call spread transactions associated with the 2022 Notes terminated in 2022. For more information, see Note 16—Debt, in the notes to the consolidated financial statements included elsewhere in this report.
A portion of this was used to pay the outstanding balance of $169.7 million and interest on our 0.625% Convertible Senior Notes that matured on June 1, 2022. The remaining call spread transactions associated with the 2022 Notes terminated in 2022.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities General Market Information, Holders and Dividends Our common stock is quoted on the Nasdaq Global Select Market under the ticker symbol “TREE”. As of February 21, 2023, there were approximately 507 holders of record of our common stock.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities General Market Information, Holders and Dividends Our common stock has been listed on the Nasdaq Global Select Market under the ticker symbol “TREE” since August 2008. As of February 23, 2024, there were approximately 482 holders of record of our common stock.
Although our Insurance segment continues to rebound from the trough in the fourth quarter of 2021, the recovery has been slower than expected as demand from our carrier partners remains volatile as they continue to attempt to 35 Table of Contents implement premium increases to offset the effect of inflation on claims.
Although our Insurance segment rebounded from the trough in the fourth quarter of 2021, the recovery was slower than expected as demand from our carrier partners remained volatile as they continued to attempt to implement premium increases to offset the effect of inflation on claims.
We also serve as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries we generate with these Network Partners. Our MyLendingTree platform offers a personalized comparison-shopping experience by providing free credit scores and credit score analysis.
We also serve as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries we generate with these Network Partners.
Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) 10/1/22 - 10/31/22 403 $ 25.91 — $ 96,655 11/1/22 - 11/30/22 2,862 $ 22.57 — $ 96,655 12/1/22 - 12/31/22 467 $ 25.48 — $ 96,655 Total 3,732 $ 23.29 — $ 96,655 (1) During October 2022, November 2022, and December 2022, 403 shares, 2,862 shares, and 467 shares, respectively (totaling 3,732 shares), were purchased to satisfy federal and state withholding obligations of our employees upon the settlement of restricted stock units and restricted stock awards, all in accordance with our Seventh Amended and Restated 2008 Stock Plan and 2017 Inducement Grant Plan, as described above.
Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) 10/1/23 - 10/31/23 303 $ 13.74 — $ 96,655 11/1/23 - 11/30/23 1,772 $ 15.78 — $ 96,655 12/1/23 - 12/31/23 2,650 $ 19.79 — $ 96,655 Total 4,725 $ 17.90 — $ 96,655 (1) During October 2023, November 2023, and December 2023, 303 shares, 1,772 shares, and 2,650 shares, respectively (totaling 4,725 shares), were purchased to satisfy federal and state withholding obligations of our employees upon the settlement of restricted stock units and restricted stock awards, all in accordance with our 2023 Stock Plan and 2023 Inducement Grant Plan, as described above.
This platform enables us to monitor consumers' credit profiles and then identify and alert them to loans and other offerings on our marketplace that may be more favorable than the terms they may have at a given point in time. This is designed to provide consumers with measurable savings opportunities over their lifetimes.
This authenticated, and secure platform enables us to monitor consumers' credit profiles, identify and alert them to changes in their financial health, and to recommend loans and other offerings on our marketplace that may be more favorable than the terms they may have at a given point in time.
We intend to capitalize on our expertise in performance marketing, product development and technology by leveraging the widespread recognition of the LendingTree brand.
By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of revenue. We intend to capitalize on our expertise in performance marketing, product development and technology by leveraging the widespread recognition of the LendingTree brand.
Fannie Mae expects a 22% decrease in existing home sales in 2023 compared to 2022. 37 Table of Contents MyLendingTree We consider certain metrics related to MyLendingTree set forth below to help us evaluate our business and growth trends and assess operational efficiencies.
This trend continued into 2023 with existing home sales decreasing 19% over 2022. Fannie Mae expects a 4% increase in existing home sales in 2024 compared to 2023. LendingTree Spring (previously MyLendingTree) We consider certain metrics related to Spring set forth below to help us evaluate our business and growth trends and assess operational efficiencies.
According to Fannie Mae data, in 2020, existing home sales grew by 6% over 2019, fueled by increased competition for low inventory as well as an increase in first-time home buyers. This trend continued into 2021 with existing home sales growing 9% over 2020.
According to Fannie Mae data, in 2021, existing home sales grew by 9% over 2020, fueled by increased competition for low inventory as well as an increase in first-time home buyers. In 2022, existing home sales decreased by 17% as compared to 2021 due to increased interest rates and limited inventory of homes.
We have no current intention to declare or pay cash dividends on our common stock in the foreseeable future. The declaration, payment and amount of future cash dividends, if any, will be at the discretion of our board of directors.
The declaration, payment and amount of future cash dividends, if any, will be at the discretion of our board of directors.
According to Mortgage Bankers Association (“MBA”) data, total refinance origination dollars of total mortgage origination dollars remained relatively consistent in 2020 and 2021, with 60% of total 2020 mortgage origination dollars from refinance and 59% of total 2021 mortgage origination dollars from refinance as a result of the general trend in average mortgage interest rates.
According to Mortgage Bankers Association (“MBA”) data, total refinance origination dollars of total mortgage origination dollars decreased to 30% in 2022 from 59% of total 2021 mortgage origination dollars from refinance due to the increase in average mortgage rates.
We dynamically adjust selling and marketing expenditures in all interest rate environments to optimize our results against these variables.
We dynamically adjust selling and marketing expenditures in all interest rate environments to optimize our results against these variables. According to Freddie Mac, 30-year mortgage interest rates steadily increased during 2021, from a monthly average of 2.74% in January 2021, ending at a monthly average of 3.10% in December 2021.
Economic Conditions We continue to monitor the impact of the COVID-19 pandemic, government actions and measures taken to prevent its spread, and the potential to affect our operations. We are also monitoring the current global economic environment, specifically including inflationary pressures and interest rates, and any resulting impacts on our financial position and results of operations. Refer to Item 1A.
Economic Conditions We continue to monitor the current global economic environment, specifically inflationary pressures and interest rates, and any resulting impacts on our financial position and results of operations. During 2022, the challenging interest rate environment and persistent inflationary pressures presented challenges for many of our mortgage lending and insurance partners.
In addition, the auto and home insurance industry was impacted in 2022 by persistent industry headwinds, supply chain issues, rising accident severity and frequency, and hurricane losses. Segment Reporting We have three reportable segments: Home, Consumer, and Insurance. Recent Business Acquisitions & Investments In January 2022, the Company acquired an equity interest in EarnUp for $15.0 million.
In addition, the auto and home insurance industry was impacted in 2022 by persistent industry headwinds, supply chain issues, rising accident severity and frequency, and hurricane losses. During 2023, the challenging interest rate environment and inflationary pressures have continued to present challenges for many of our mortgage lending and insurance partners.
According to Freddie Mac, 30-year mortgage interest rates steadily decreased in 2020, largely as a result of stimulus efforts in response to the COVID-19 pandemic, beginning at a monthly average of 3.62% in January 2020 and ending at a monthly average of 2.68% in December 2020.
During 2023, 30-year mortgage interest rates steadily increased from a monthly average of 6.27% in January 2023 to a high of 7.62% in October 2023 prior to decreasing at the end of the year, ending at a monthly average of 6.82% in December 2023.
Removed
The LendingTree Loans business is presented as discontinued operations in the accompanying consolidated balance sheets, consolidated statements of operations and comprehensive income (loss) and consolidated cash flows for all periods presented. Except for the discussion under the heading “Discontinued Operations,” the analysis within Management's Discussion and Analysis of Financial Condition and Results of Operations reflects our continuing operations.
Added
The actual number of holders of our common stock is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees. We have no current intention to declare or pay cash dividends on our common stock in the foreseeable future.
Removed
“Risk Factors” for additional information. Of our three reportable segments, the Consumer segment was impacted the most as unsecured credit and the flow of capital in certain areas of the market contracted. Most of our selling and marketing expenses are variable costs that we adjust dynamically in relation to revenue opportunities to profitably meet demand.
Added
Our Spring platform (previously MyLendingTree) offers a personalized comparison-shopping experience, financial health advice and credit simulations by providing free credit scores and credit score analysis.
Removed
Thus, as our revenue was negatively impacted during the COVID-19 pandemic and the macro-economic conditions that followed, our marketing expenses generally decreased in line with revenue. During 2022, the challenging interest rate environment and persistent inflationary pressures have presented additional challenges for many of our mortgage lending and insurance partners.
Added
In our Home segment, mortgage rates hit multi-decade highs of nearly 8% in October, then proceeded to drop below 7% by December, ending the year at 6.6%. The continued high mortgage rates in 2023 and home affordability issues continued to cause declines in refinance volumes and purchase activity.
Removed
EarnUp is a consumer-first mortgage payment platform that intelligently automates loan payment scheduling and helps consumers better manage their money and improve their financial well-being. In February 2020, we acquired an equity interest in Stash for $80.0 million, and in January 2021, we acquired an additional equity interest in Stash for $1.2 million.
Added
In our Insurance segment, demand from our carrier partners remained volatile for much of the year as they continued to deal with persistent industry headwinds.
Removed
Stash is a consumer investing and banking platform. Stash brings together banking, investing, and financial services education into one seamless experience offering a full suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back® rewards program.
Added
In the last months of 2023, we began to see advertising budgets from our carrier partners increase and we are optimistic about the prospect for continued increases into 2024. 36 Table of Contents Segment Reporting We have three reportable segments: Home, Consumer, and Insurance.
Removed
In the fourth quarter of 2021, we sold a portion of our investment in Stash for $46.3 million, realizing a gain on the sale of $27.9 million. See Note 8—Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional information on the equity interest in Stash and EarnUp.
Added
On March 8, 2023, we repurchased approximately $190.6 million in principal amount of our 2025 Notes, through separate transactions with certain holders of the 2025 Notes, for $156.3 million plus accrued and unpaid interest of approximately $0.1 million.
Removed
In 2022, existing home sales decreased by 17% as compared to 2021 due to increased interest rates and limited inventory of homes.
Added
On December 7, 2023, we repurchased approximately $100.2 million in principal amount of our 2025 Notes, through separate transactions with certain holders of the 2025 Notes, for $81.2 million plus accrued and unpaid interest of approximately $0.2 million.
Removed
We attribute $123.7 million of revenue in 2022 to registered MyLendingTree members across the LendingTree platform. Our focus on improving the MyLendingTree experience for consumers remains a top priority. Becoming an integrated digital advisor will greatly improve the consumer experience, which we expect to result in higher levels of engagement improved membership growth rates, and ultimately stronger financial results.
Added
In 2023, we recognized a gain on the extinguishment of debt of $53.3 million, a loss on the write-off of unamortized debt issuance costs of $3.2 million and incurred debt repayment costs of $1.6 million, all of which are included in interest income/expense, net in the consolidated statement of operations and comprehensive income.
Removed
North Carolina Office Properties Our new corporate office is located on approximately 176,000 square feet of office space in Charlotte, North Carolina under an approximate 15-year lease that commenced in the second quarter of 2021.
Added
For more information, see Note 15—Debt, in the notes to the consolidated financial statements included elsewhere in this report. Cost Reductions and Simplification of Business On March 24, 2023, we committed to a workforce reduction plan (the “Reduction Plan”), to reduce operating costs, which included the elimination of approximately 13% of the Company’s workforce.
Removed
With our expansion in North Carolina, in December 2016, we received a grant from the state that provides up to $4.9 million in reimbursements through 2029 beginning in 2017 for investing in real estate and infrastructure in addition to increasing jobs in North Carolina at specific targeted levels through 2021, and maintaining the jobs thereafter.
Added
As a result of the Reduction Plan, we incurred approximately $5.3 million in severance charges in connection with the workforce reduction. Part of this Reduction Plan included the shut down of our LendingTree customer call center as well as our Medicare insurance agency operations within QuoteWizard.
Removed
We have received approximately $0.7 million related to the December 2016 grants. If we are unable to maintain the specified target levels, our ability to earn further reimbursements could be limited.
Added
We anticipate the Reduction Plan will reduce annual compensation expense by approximately $14 million, comprised of $2 million in cost of revenue, $4 million in selling and marketing expense, $3 million in general and administrative expense, and $5 million in product development. During September 2023, we completed workforce reductions of 14 employees.
Removed
Additionally, the city of Charlotte and the county of Mecklenburg provided a grant that will be paid over five years and is based on a percentage of new property tax we pay on the development of a corporate headquarters.
Added
We incurred $0.9 million in severance charges in connection with the workforce reductions, consisting of cash expenditures for employee separation costs of approximately $0.7 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $0.2 million.
Removed
In December 2018, we received an additional grant from the state that provides an aggregate amount up to $8.4 million in reimbursements through 2032 beginning in 2021 for increasing jobs in North Carolina at specific targeted levels through 2024, and maintaining the jobs thereafter.
Added
Separately, we made the decision to close our Ovation credit services business, an asset group within our Consumer segment, by mid- 2023. As a result, the Company recorded an asset impairment charge of $4.2 million in 2023 related to the write-off of certain long-term assets.
Removed
We have currently not met the specified target levels set forth in the December 2018 grant and may not realize any reimbursements from this grant. 38 Table of Contents Results of Operations for the Years ended December 31, 2022 and 2021 For information on fiscal 2020 results and similar comparisons, see
Added
Additionally, we incurred $2.1 million in severance charges in 2023 in connection with cash expenditures for employee separation costs. We acquired Ovation in 2018 to better serve those customers who come to LendingTree and receive suboptimal offers of credit.
Added
The business grew for a number of years before running into challenges in the wake of COVID-19, and more recently the industry has faced increased regulatory pressure. The business is capital-intensive, requires elevated overhead, and future prospects were becoming uncertain.
Added
The Ovation business accounted for approximately 3% of total revenue and 3% of total costs and expenses, with an immaterial impact to net income on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2022. 39 Table of Contents Results of Operations for the Years ended December 31, 2023 and 2022 For information on fiscal 2021 results and similar comparisons, see

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

67 edited+38 added−39 removed40 unchanged
Biggest changeYear Ended December 31, 2022 vs. 2021 2022 2021 $ Change % Change (Dollars in thousands) Home $ 289,383 $ 441,738 $ (152,355) (34) % Consumer 396,109 329,945 66,164 20 % Insurance 299,073 326,153 (27,080) (8) % Other 427 663 (236) (36) % Revenue 984,992 1,098,499 (113,507) (10) % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) 57,769 57,297 472 1 % Selling and marketing expense 702,238 773,990 (71,752) (9) % General and administrative expense 152,377 153,472 (1,095) (1) % Product development 55,553 52,865 2,688 5 % Depreciation 20,095 17,910 2,185 12 % Amortization of intangibles 25,306 42,738 (17,432) (41) % Change in fair value of contingent consideration — (8,249) 8,249 100 % Restructuring and severance 4,428 53 4,375 8,255 % Litigation settlements and contingencies (18) 392 (410) (105) % Total costs and expenses 1,017,748 1,090,468 (72,720) (7) % Operating (loss) income (32,756) 8,031 (40,787) (508) % Other (expense) income, net: Interest expense, net (26,014) (46,867) (20,853) (44) % Other income 3,843 123,272 (119,429) (97) % (Loss) income before income taxes (54,927) 84,436 (139,363) (165) % Income tax expense (133,019) (11,298) 121,721 1,077 % Net (loss) income from continuing operations (187,946) 73,138 (261,084) (357) % Loss from discontinued operations, net of tax (6) (4,023) (4,017) (100) % Net (loss) income and comprehensive (loss) income $ (187,952) $ 69,115 $ (257,067) (372) % Revenue Revenue decreased in 2022 compared to 2021 due to decreases in our Home and Insurance segments, partially offset by an increase in our Consumer segment.
Biggest changeYear Ended December 31, 2023 vs. 2022 2023 2022 $ Change % Change (Dollars in thousands) Home $ 143,753 $ 289,383 $ (145,630) (50) % Consumer 278,945 396,109 (117,164) (30) % Insurance 249,605 299,073 (49,468) (17) % Other 199 427 (228) (53) % Revenue 672,502 984,992 (312,490) (32) % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) 38,758 57,769 (19,011) (33) % Selling and marketing expense 433,588 702,238 (268,650) (38) % General and administrative expense 117,700 152,383 (34,683) (23) % Product development 47,197 55,553 (8,356) (15) % Depreciation 19,070 20,095 (1,025) (5) % Amortization of intangibles 7,694 25,306 (17,612) (70) % Goodwill impairment 38,600 — 38,600 — % Restructuring and severance 10,118 4,428 5,690 129 % Litigation settlements and contingencies 388 (18) 406 2,256 % Total costs and expenses 713,113 1,017,754 (304,641) (30) % Operating loss (40,611) (32,762) (7,849) (24) % Other (expense) income, net: Interest income (expense), net 21,685 (26,014) 47,699 183 % Other (expense) income (105,993) 3,843 (109,836) (2,858) % Loss before income taxes (124,919) (54,933) (69,986) (127) % Income tax benefit (expense) 2,515 (133,019) 135,534 102 % Net loss and comprehensive loss $ (122,404) $ (187,952) $ 65,548 35 % Revenue Revenue decreased in 2023 compared to 2022 due to decreases in our Home, Consumer and Insurance segments.
If an award is modified, we determine if the modification requires a new calculation of fair value or change in the vesting term of the award. See Note 14—Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report for additional information on assumptions and inputs to the fair value determination of stock-based awards.
If an award is modified, we determine if the modification requires a new calculation of fair value or change in the vesting term of the award. See Note 13—Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report for additional information on assumptions and inputs to the fair value determination of stock-based awards.
Restructuring and severance During 2022, we completed workforce reductions in each of the first, second, and fourth quarters of approximately 75 employees, 25 employees, and 50 employees, respectively. We incurred total expense of $4.4 million consisting of employee separation costs of $3.3 million and non-cash compensation expense of $1.1 million due to the accelerated vesting of certain equity awards.
During 2022, we completed workforce reductions in each of the first, second, and fourth quarters of approximately 75 employees, 25 employees, and 50 employees, respectively. We incurred total expense of $4.4 million consisting of employee separation costs of $3.3 million and non-cash compensation expense of $1.1 million due to the accelerated vesting of certain equity awards.
Income Taxes Estimates of current and deferred income taxes and the significant items giving rise to the deferred assets and liabilities are shown in Note 15—Income Taxes in the notes to the consolidated financial statements included elsewhere in this report, and reflect management's assessment of actual future taxes to be paid on items reflected in the consolidated financial statements, giving consideration to both timing and the probability of realization.
Income Taxes Estimates of current and deferred income taxes and the significant items giving rise to the deferred assets and liabilities are shown in Note 14—Income Taxes in the notes to the consolidated financial statements included elsewhere in this report and reflect management's assessment of actual future taxes to be paid on items reflected in the consolidated financial statements, giving consideration to both timing and the probability of realization.
Critical Accounting Policies and Estimates The following disclosure is provided to supplement the description of our accounting policies contained in Note 2—Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this report in regard to significant areas of judgment. This disclosure includes accounting policies related to both continuing operations and discontinued operations.
Critical Accounting Policies and Estimates The following disclosure is provided to supplement the description of our accounting policies contained in Note 2—Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this report regarding significant areas of judgment. This disclosure includes accounting policies related to both continuing operations and discontinued operations.
See Note 23—Segment Information in the notes to the consolidated financial statements included elsewhere in this report for additional information on segments and a reconciliation of segment profit to pre-tax income from continuing operations.
See Note 22—Segment Information in the notes to the consolidated financial statements included elsewhere in this report for additional information on segments and a reconciliation of segment profit to pre-tax income from continuing operations.
Non-Cash Expenses that are Excluded from Adjusted EBITDA Non-cash compensation expense consists principally of expense associated with grants of restricted stock, restricted stock units and stock options, some of which awards have performance-based vesting conditions. These expenses are not paid in cash, and we include the related shares in our calculations of fully diluted shares outstanding.
Non-Cash Expenses that are Excluded from Adjusted EBITDA Non-cash compensation expense consists principally of expense associated with grants of restricted stock, restricted stock units and stock options, some of which awards have performance-based vesting conditions. These expenses are not paid in cash 46 Table of Contents and we include the related shares in our calculations of fully diluted shares outstanding.
One-time items for the year ended December 31, 2022 consisted of the $1.5 million franchise tax caused by the equity investment gain in Stash. There are no adjustments for one-time items for the year ended December 31, 2021.
There are no adjustments for one-time items for the year ended December 31, 2023. One-time items for the year ended December 31, 2022 consisted of the $1.5 million franchise tax caused by the equity investment gain in Stash.
Cash Flows from Financing Activities Net cash provided by financing activities attributable to continuing operations in 2022 of $32.5 million consisted primarily of $250.0 million in proceeds from the term loan and the repayment of $169.7 million to settle our 2022 Notes discussed in the “Credit Facility” section above, $43.0 million for the repurchase of our stock, $3.4 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options and $1.3 million repayment of the term loan.
Net cash provided by financing activities in 2022 of $32.5 million consisted primarily of $250.0 million in proceeds from the term loan and the repayment of $169.7 million to settle our 2022 Notes discussed in the “Credit Facility” section above, $43.0 million for the repurchase of our stock, $3.4 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options, and $1.3 million repayment of the term loan.
We adjusted our advertising expenditures in 2022 compared to 2021 in response to changes in Network Partner demand on our marketplace. We will continue to adjust selling and marketing expenditures dynamically in response to anticipated revenue opportunities.
We adjusted our advertising expenditures in 2023 compared to 2022 in response to changes in Network Partner demand on our marketplace. We will continue to adjust selling and marketing expenditures dynamically in response to anticipated revenue opportunities.
Definition of Adjusted EBITDA We report Adjusted EBITDA as net income from continuing operations adjusted to exclude interest, income tax, amortization of intangibles and depreciation, and to further exclude (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on disposal of assets, (4) gain/loss on investments (5) restructuring and severance expenses, (6) litigation settlements and contingencies, (7) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), (8) contributions to the LendingTree Foundation, and (9) one-time items.
Definition of Adjusted EBITDA We report Adjusted EBITDA as net income adjusted to exclude interest, income tax, amortization of intangibles and depreciation, and to further exclude (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on disposal of assets, (4) gain/loss on investments (5) restructuring and severance expenses, (6) litigation settlements and contingencies, (7) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), (8) contributions to the LendingTree Foundation, (9) dividend income, and (10) one-time items.
We endeavor to compensate for the limitations of the non-GAAP measures presented by also providing the comparable GAAP measures with 45 Table of Contents equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
We endeavor to compensate for the limitations of the non-GAAP measures presented by also providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations for the Years ended December 31, 2021 and 2020 of our Form 10-K for the fiscal year ended December 31, 2021.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations for the Years ended December 31, 2022 and 2021 of our Form 10-K for the fiscal year ended December 31, 2022.
We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. 48 Table of Contents A valuation allowance is provided on deferred tax assets if it is determined that it is “more likely than not” that the deferred tax asset will not be realized.
We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. A valuation allowance is provided on deferred tax assets if it is determined that it is “more likely than not” that the deferred tax asset will not be realized.
In determining the amount of the valuation allowance, we considered the scheduled reversal of deferred tax liabilities. We will maintain a full valuation allowance on net deferred tax assets until there is sufficient evidence to support the reversal of some or all of the allowance.
In determining the amount of the valuation allowance, we considered the 49 Table of Contents scheduled reversal of deferred tax liabilities. We will maintain a full valuation allowance on net deferred tax assets until there is sufficient evidence to support the reversal of some or all of the allowance.
At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives. The following table is a reconciliation of net (loss) income from continuing operations, the most directly comparable GAAP measure, to Adjusted EBITDA.
At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives. The following table is a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA.
Performing the quantitative test for goodwill impairment that compares the reporting unit fair value with its carrying value using a discounted cash flow and market analysis requires the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates, including revenue, the amount and timing of expected future cash flows, and market multiples.
Performing the quantitative test for goodwill impairment that compares the reporting unit fair value with its carrying value using a discounted cash flow and market analysis requires the exercise of significant judgments, including judgments about appropriate discount rates, revenue growth rates, marketing spend, direct operating expenses, the amount and timing of expected future cash flows, and market multiples.
Cash Flows from Investing Activities Net cash used in investing activities attributable to continuing operations in 2022 of $27.9 million consisted of the purchase of a $16.4 million equity investment in EarnUp and another small investment, as well as capital expenditures of $11.4 million primarily related to internally-developed software.
Net cash used in investing activities in 2022 of $27.9 million consisted of the purchase of a $16.4 million equity investment in EarnUp and another small investment, as well as capital expenditures of $11.4 million primarily related to internally developed software.
See Note 8—Equity Investment in the notes to the consolidated financial statements included elsewhere in this report for additional information on the equity interest in Stash.
See Note 8—Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional information on the equity interest.
Our principal executive office is located in Charlotte, North Carolina under an approximate 15-year lease that commenced in the second quarter of 2021. We anticipate cash payments under operating lease obligations of $13.1 million in 2023. See Note 12—Leases in the notes to the consolidated financial statements included elsewhere in this report for more information.
Our principal executive office is located in Charlotte, North Carolina under an approximate 15-year lease that commenced in the second quarter of 2021. We anticipate cash payments under operating lease obligations of $11.4 million in 2024. See Note 11—Leases in the notes to the consolidated financial statements included elsewhere in this report for more information.
An increase in a product’s revenue is generally met by a corresponding increase in marketing spend, and conversely a decrease in a product’s revenue is generally met by a corresponding decrease in marketing spend. This relationship exists for our Home, Consumer, and Insurance segments.
An increase in a product’s revenue is generally 41 Table of Contents met by a corresponding increase in marketing spend, and conversely a decrease in a product’s revenue is generally met by a corresponding decrease in marketing spend. This relationship exists for our Home, Consumer, and Insurance segments.
At December 31, 2021 and 2020, we recorded a partial valuation allowance of $6.0 million and $5.8 million, respectively, primarily related to state net operating losses, which we do not expect to be able to utilize prior to expiration.
At December 31, 2021, we recorded a partial valuation allowance of $6.0 million primarily related to state net operating losses, which we do not expect to be able to utilize prior to expiration.
The remaining proceeds of $79.8 million may be used for general corporate purposes and any other purposes not prohibited by the Credit Agreement. As of February 27, 2023, we have outstanding $248.8 million under the Term Loan Facility, a $0.2 million letter of credit under the Revolving Facility, and the remaining borrowing capacity is $199.8 million.
The remaining proceeds of $79.8 million may be used for general corporate purposes and any other purposes not prohibited by the Credit Agreement. As of February 28, 2024, we have outstanding $246.3 million under the Term Loan Facility, a $0.2 million letter of credit under the Revolving Facility, and the remaining borrowing capacity is $199.8 million.
During 2022, we incurred income tax expense of $139.4 million related to the valuation allowance. At December 31, 2022, we maintain a valuation allowance of $145.4 million against our net deferred tax assets.
During 2022, we incurred income tax expense of $139.4 million related to the valuation allowance. At December 31, 2023 and 2022, we maintain a valuation allowance of $162.5 million and $145.4 million, respectively, against our net deferred tax assets.
Cost of revenue Cost of revenue consists primarily of costs associated with compensation and other employee-related costs (including stock-based compensation) relating to internally-operated customer call centers, third-party customer call center fees, credit scoring fees, credit card fees, website network hosting, and server fees. Cost of revenue remained relatively consistent in 2022 compared to 2021.
Cost of revenue Cost of revenue consists primarily of costs associated with compensation and other employee-related costs (including stock-based compensation) relating to internally-operated customer call centers, third-party customer call center fees, credit scoring fees, credit card fees, website network hosting, and server fees.
Cost of revenue as a percentage of revenue increased to 6% in 2022 compared to 5% in 2021. Selling and marketing expense Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-related costs (including stock-based compensation) for personnel engaged in sales or marketing functions.
Cost of revenue as a percentage of revenue remained consistent at 6% in 2023 compared to 2022. Selling and marketing expense Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-related costs (including stock-based compensation) for personnel engaged in sales or marketing functions.
Advertising and promotional expenditures primarily include online marketing, as well as television, print, and radio spending. Advertising production costs are expensed in the period the related ad is first run. The $71.8 million decrease in selling and marketing expense in 2022 compared to 2021 was primarily due to the decreases in advertising and promotional expense discussed below.
Advertising and promotional expenditures primarily include online marketing, as well as television, print, and radio spending. Advertising production costs are expensed in the period the related advertisement is first run. Selling and marketing expense decreased in 2023 compared to 2022 primarily due to the $255.8 million decrease in advertising and promotional expense discussed below.
Revenue from our refinance mortgage product decreased $203.7 million in 2022 compared to 2021, primarily due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer, as interest rates rose significantly in 2022.
Revenue from our refinance mortgage product decreased $82.9 million in 2023 compared to 2022, primarily due to a decrease in the number of consumers completing request forms and a decrease in revenue earned per consumer as interest rates continued to increase in 2023.
Within Home, our core mortgage business generated revenue of $179.4 million in 2022, down 52% from 2021, as demand for refinancing transactions diminished throughout the year, with almost no outstanding mortgages later in the year carrying a higher rate than current loan offerings.
Within Home, our core mortgage business generated revenue of $58.7 million in 2023, down 67% from 2022, as demand for refinancing transactions diminished throughout the year, with few mortgages later in the year carrying a higher rate than current loan offerings.
For additional information on the Credit Facility, see Note 16—Debt in the notes to the consolidated financial statements included elsewhere in this report. Operating Leases We have operating lease obligations associated with office space in various cities across the country and office equipment.
We have $79.9 million available for borrowing under the Revolving Facility as of February 28, 2024. For additional information on the Credit Facility, see Note 15—Debt in the notes to the consolidated financial statements included elsewhere in this report. Operating Leases We have operating lease obligations associated with office space in various cities across the country and office equipment.
The value of goodwill subject to assessment for impairment at December 31, 2022 is $420.1 million. 49 Table of Contents Recoverability of Long-Lived Assets We review the carrying value of all long-lived assets, primarily property and equipment, definite-lived intangible assets and operating lease right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may be impaired.
Recoverability of Long-Lived Assets We review the carrying value of all long-lived assets, primarily property and equipment, definite-lived intangible assets and operating lease right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may be impaired.
Product development expense increased in 2022 compared to 2021 as we continued to invest in internal development of new and enhanced features, functionality and business opportunities that we believe will enable us to better and more fully serve consumers and Network Partners.
Product development expense decreased in 2023 compared to 2022 primarily due to the Reduction Plan at the end of the first quarter of 2023. We continued to invest in internal development of new and enhanced features, functionality and business opportunities that we believe will enable us to better and more fully serve consumers and Network Partners.
We ceased offering reverse mortgage loans in the fourth quarter of 2022. Revenue from our Home segment decreased $152.4 million, or 34%, in 2022 from 2021 primarily due to a decrease in revenue from our refinance mortgage product, partially offset by increases in our home equity loans and purchase mortgage products.
Our Home segment includes the following products: purchase mortgage, refinance mortgage, and home equity loans and lines of credit. We ceased offering reverse mortgage loans in the fourth quarter of 2022. Revenue from our Home segment decreased $145.6 million, or 50%, in 2023 from 2022 primarily due to a decrease in revenue from our mortgage products.
The carrying value of our equity investment at December 31, 2022 is $174.6 million. New Accounting Pronouncements See Note 2—Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this report for a description of recent accounting pronouncements. 50 Table of Contents
New Accounting Pronouncements See Note 2—Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this report for a description of recent accounting pronouncements. 51 Table of Contents
Our credit facility described below is an additional potential source of liquidity. We will continue to monitor economic impacts caused by the challenging interest rate environment, high levels of inflation, and lingering effects of the COVID-19 pandemic on our liquidity and capital resources.
We will continue to monitor economic impacts caused by the challenging interest rate environment and high levels of inflation on our liquidity and capital resources.
Income tax expense Year Ended December 31, 2022 2021 (in thousands, except percentages) Income tax expense $ (133,019) $ (11,298) Effective tax rate (242.2) % 13.4 % For 2022, the effective tax rate varied from the federal statutory rate of 21% primarily due to expense of $139.4 million to record a full valuation allowance against our net deferred tax assets.
For 2022, the effective tax rate varied from the federal statutory rate of 21% primarily due to expense of $139.4 million to record a full valuation allowance against our net deferred tax assets.
See Note 8—Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional information on the equity interest. 2021 In 2021, we repurchased an aggregate of 334,253 shares of our common stock pursuant to a stock repurchase program for $40.0 million.
For more information , see Note 15—Debt, in the notes to the consolidated financial statements included elsewhere in this report. 2022 In 2022, we repurchased an aggregate of 379,895 shares of our common stock pursuant to a stock repurchase program for $43.0 million. In the first quarter of 2022, we acquired an equity interest in EarnUp for $15.0 million.
Net cash used in financing activities attributable to continuing operations in 2021 of $63.3 million consisted primarily of $40.0 million for the repurchase of our stock, $14.4 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options, as well as $6.4 million for the payment of debt issuance costs and $2.5 million paid for the original issue discount on the Term Loan Facility.
Cash Flows from Financing Activities Net cash used in financing activities in 2023 of $242.0 million consisted primarily of the repurchase of our 2025 Notes for $237.5 million and the related payment of debt issuance costs of $1.6 million, $1.1 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options and $1.9 million repayment of the Term Loan Facility.
General and administrative expense decreased in 2022 compared to 2021, primarily due to decreases in compensation and benefits, facilities, and professional fees expense of $13.4 million, $1.6 million, and $1.1 million, respectively.
General and administrative expense decreased in 2023 compared to 2022, primarily due to a decrease in compensation and benefits of $18.1 million. Additionally, professional fees, technology, facilities, and bad debt expense decreased $2.8 million, $2.6 million, $2.4 million, and $2.3 million, respectively.
Revenue from our home equity loans and lines of credit product increased $43.0 million, or 67% to $105.8 million in 2022 from $62.7 million in 2021 due to an increase in both the number of consumers completing request forms and the revenue earned per consumer.
Revenue from our home equity loans and lines of credit product decreased $20.7 million, or 20%, to $85.1 million in 2023 from $105.8 million in 2022 primarily due to a decrease the reven ue earned per consumer, slightly offset by an increase in the number of consumers completing request forms.
Revenue from our personal loans product increased $34.0 million, or 31%, to $144.1 million in 2022 from $110.1 million in 2021 primarily due to an increase in the number of consumers completing request forms.
Revenue from our personal loans product decreased $44.0 million, or 31%, to $100.1 million in 2023 from $144.1 million in 2022 primarily due to a decrease in the number of consumers completing request forms and in revenue earned per consumer.
Revenue from our purchase mortgage product increased $7.1 million in 2022 compared to 2021 primarily due to an increase in revenue earned per consumer, partially offset by a decrease in the number of consumers completing request forms.
Revenue from our Insurance segment decreased $49.5 million, or 17%, to $249.6 million in 2023 from $299.1 million in 2022 primarily due to a decrease in the revenue earned per consumer, partially offset by an increase in the number of consumers completing request forms.
Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Position, Liquidity and Capital Resources of our Form 10-K for the fiscal year ended December 31, 2021.
Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Position, Liquidity and Capital Resources of our Form 10-K for the fiscal year ended December 31, 2022. General As of December 31, 2023, we had $112.1 million of cash and cash equivalents, compared to $298.8 million of cash and cash equivalents as of December 31, 2022.
Cash Flows from Continuing Operations Our cash flows attributable to continuing operations are as follows: Year Ended December 31, 2022 2021 (in thousands) Net cash provided by operating activities $ 42,974 $ 131,256 Net cash (used in) provided by investing activities $ (27,876) $ 10,067 Net cash provided by (used in) financing activities $ 32,536 $ (63,347) Cash Flows from Operating Activities Our largest source of cash provided by our operating activities is revenues generated by our products.
Cash Flows Our cash flows are as follows: Year Ended December 31, 2023 2022 (in thousands) Net cash provided by operating activities $ 67,571 $ 42,967 Net cash (used in) provided by investing activities $ (12,478) $ (27,876) Net cash (used in) provided by financing activities $ (242,006) $ 32,536 Cash Flows from Operating Activities Our largest source of cash provided by our operating activities is revenue generated by our products.
Non-cash compensation expense is excluded from Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), as discussed below. General and administrative expense as a percentage of revenue increased to 15% in 2022 from 14% in 2021.
For additional information, see Note—13-Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report. Non-cash compensation expense is excluded from Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), as discussed below. General and administrative expense as a percentage of revenue increased to 18% in 2023 from 15% in 2022.
Changes in the timing of the recovery compared to current expectations could cause an impairment to the Insurance or Mortgage reporting units.
Changes in the timing of the recovery compared to current expectations could cause an impairment to the Insurance or Mortgage reporting units. The value of goodwill subject to assessment for impairment at December 31, 2023 is $381.5 million.
Our primary uses of cash from our operating activities include advertising and promotional payments. In addition, our uses of cash from operating 47 Table of Contents activities include compensation and other employee-related costs, other general corporate expenditures, litigation settlements and contingencies, certain contingent consideration payments, and income taxes.
In addition, our uses of cash from operating activities include compensation and other employee-related costs, other general corporate expenditures, litigation settlements and contingencies, certain contingent consideration payments, and income taxes. 48 Table of Contents Cash from changes in working capital increased primarily as a result of favorable changes in accounts receivable and accounts payable, accrued expenses and other current liabilities.
Year Ended December 31, 2022 2021 (in thousands) Net (loss) income from continuing operations $ (187,946) $ 73,138 Adjustments to reconcile to Adjusted EBITDA: Amortization of intangibles 25,306 42,738 Depreciation 20,095 17,910 Restructuring and severance 4,428 53 Loss on impairments and disposal of assets 6,590 3,465 Gain on investments — (123,272) Non-cash compensation expense 58,541 68,555 Franchise tax caused by equity investment gain 1,500 — Contribution to LendingTree Foundation 500 — Change in fair value of contingent consideration — (8,249) Acquisition expense 277 1,796 Litigation settlements and contingencies (18) 392 Interest expense, net 26,014 46,867 Dividend income (3,842) — Income tax expense 133,019 11,298 Adjusted EBITDA $ 84,464 $ 134,691 Financial Position, Liquidity and Capital Resources For information on fiscal 2020 results and similar comparisons, see Item 7.
Year Ended December 31, 2023 2022 (in thousands) Net loss $ (122,404) $ (187,952) Adjustments to reconcile to Adjusted EBITDA: Amortization of intangibles 7,694 25,306 Depreciation 19,070 20,095 Restructuring and severance 10,118 4,428 Loss on impairments and disposal of assets 5,437 6,590 Loss on investments 114,504 — Goodwill impairment 38,600 — Non-cash compensation expense 37,176 58,541 Franchise tax caused by equity investment gain — 1,500 Contribution to LendingTree Foundation — 500 Acquisition expense (5) 277 Litigation settlements and contingencies 388 (18) Interest (income) expense, net (21,685) 26,014 Dividend income (7,888) (3,842) Income tax (benefit) expense (2,515) 133,019 Adjusted EBITDA $ 78,490 $ 84,458 Financial Position, Liquidity and Capital Resources For information on fiscal 2021 results and similar comparisons, see Item 7.
Subsequent to the adoption of ASU 2018-15 in the first quarter of 2020, capitalized implementation costs incurred in a hosting arrangement that is a service contract are also allocated to and included within long-lived asset groups tested for recoverability.
Capitalized implementation costs incurred in a hosting arrangement that is a service contract are also allocated to and included within long-lived asset groups tested for recoverability. The combined value of long-lived assets and capitalized implementation costs incurred in a hosting arrangement that is a service contract subject to assessment for impairment is $154.7 million at December 31, 2023.
Accordingly, the equity securities will be carried at cost less impairment, if any, and subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar investments with any gains or losses recorded to the consolidated statement of operations and comprehensive income.
Equity Investments Our equity investments do not have a readily determinable fair value and, upon acquisition, we elected the measurement alternative to value these investments. Accordingly, the equity investments will be carried at cost less impairment, if any, and subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar investments.
The following shows the calculation of variable marketing margin: Year Ended December 31, 2022 2021 (in thousands) Revenue $ 984,992 $ 1,098,499 Variable marketing expense 647,324 716,639 Variable marketing margin $ 337,668 $ 381,860 44 Table of Contents Below is a reconciliation of selling and marketing expense, the most directly comparable GAAP measure, to variable marketing expense: Year Ended December 31, 2022 2021 (in thousands) Selling and marketing expense $ 702,238 $ 773,990 Non-variable selling and marketing expense (54,914) (57,351) Variable marketing expense $ 647,324 $ 716,639 The following is a reconciliation of net (loss) income from continuing operations, the most directly comparable GAAP measure, to variable marketing margin: Year Ended December 31, 2022 2021 (in thousands) Net (loss) income from continuing operations $ (187,946) $ 73,138 Adjustments to reconcile to variable marketing margin: Cost of revenue 57,769 57,297 Non-variable selling and marketing expense (1) 54,914 57,351 General and administrative expense 152,377 153,472 Product development 55,553 52,865 Depreciation 20,095 17,910 Amortization of intangibles 25,306 42,738 Change in fair value of contingent consideration — (8,249) Restructuring and severance 4,428 53 Litigation settlements and contingencies (18) 392 Interest expense, net 26,014 46,867 Other income (3,843) (123,272) Income tax expense 133,019 11,298 Variable marketing margin $ 337,668 $ 381,860 (1) Represents the portion of selling and marketing expense not attributable to variable costs paid for advertising, direct marketing and related expenses.
The following shows the calculation of variable marketing margin: Year Ended December 31, 2023 2022 (in thousands) Revenue $ 672,502 $ 984,992 Variable marketing expense 391,557 647,324 Variable marketing margin $ 280,945 $ 337,668 Below is a reconciliation of selling and marketing expense, the most directly comparable GAAP measure, to variable marketing expense: Year Ended December 31, 2023 2022 (in thousands) Selling and marketing expense $ 433,588 $ 702,238 Non-variable selling and marketing expense (42,031) (54,914) Variable marketing expense $ 391,557 $ 647,324 45 Table of Contents The following is a reconciliation of net loss, the most directly comparable GAAP measure, to variable marketing margin: Year Ended December 31, 2023 2022 (in thousands) Net loss $ (122,404) $ (187,952) Adjustments to reconcile to variable marketing margin: Cost of revenue 38,758 57,769 Non-variable selling and marketing expense (1) 42,031 54,914 General and administrative expense 117,700 152,383 Product development 47,197 55,553 Depreciation 19,070 20,095 Amortization of intangibles 7,694 25,306 Goodwill impairment 38,600 — Restructuring and severance 10,118 4,428 Litigation settlements and contingencies 388 (18) Interest (income) expense, net (21,685) 26,014 Other expense (income) 105,993 (3,843) Income tax (benefit) expense (2,515) 133,019 Variable marketing margin $ 280,945 $ 337,668 (1) Represents the portion of selling and marketing expense not attributable to variable costs paid for advertising, direct marketing and related expenses.
Revenue from our small business loans product increased $19.9 million in 2022 compared to 2021, due to an increase in revenue earned per consumer, partially offset by a decrease in the number of consumers.
Revenue from our small business loans product decreased $16.5 million, or 24%, in 2023 compared to 2022, due to a decrease in revenue earned per consumer and a decrease in the number of consumers completing request forms.
Revenue from our mortgage products decreased $196.6 million, or 52%, to $179.4 million in 2022 from $376.1 million in 2021.
Revenue from our mortgage products decreased $120.8 million, or 67%, to $58.7 million in 2023 from $179.4 million in 2022.
HOME Revenue in the Home segment decreased 34% to $289.4 million in 2022 from 2021, with segment profit of $103.1 million in 2022, a decrease of 33% from 2021. Our Home segment margin (segment profit divided by segment revenue) remained relatively consistent, at 36% in 2022 compared to 35% in 2021.
HOME Revenue in the Home segment decreased 50% to $143.8 million in 2023 from 2022, with segment profit of $47.9 million in 2023, a decrease of 54% from 2022. Our Home segment margin, which is segment profit divided by segment revenue, decreased slightly to 33% in 2023 compared to 36% in 2022.
Additionally, compensation and benefits decreased $2.4 million in 2022 compared to 2021. 40 Table of Contents Advertising and promotional expense is the largest component of selling and marketing expense, and is comprised of the following: Year Ended December 31, 2022 vs. 2021 2022 2021 $ Change % Change (Dollars in thousands) Online $ 614,369 $ 687,976 $ (73,607) (11) % Broadcast 16,654 8,738 7,916 91 % Other 16,301 19,925 (3,624) (18) % Total advertising and promotional expense $ 647,324 $ 716,639 $ (69,315) (10) % In the periods presented, advertising and promotional expenses are equivalent to the non-GAAP measure variable marketing expense.
Advertising and promotional expense is the largest component of selling and marketing expense, and is comprised of the following: Year Ended December 31, 2023 vs. 2022 2023 2022 $ Change % Change (Dollars in thousands) Online $ 383,996 $ 614,369 $ (230,373) (37) % Broadcast 278 16,654 (16,376) (98) % Other 7,283 16,301 (9,018) (55) % Total advertising and promotional expense $ 391,557 $ 647,324 $ (255,767) (40) % In the periods presented, advertising and promotional expenses are equivalent to the non-GAAP measure variable marketing expense.
The quantitative goodwill impairment test found that the fair value of each reporting unit exceeded its carrying amount, indicating no goodwill impairment. We will monitor the recovery of the Insurance reporting unit and the Mortgage reporting unit.
The quantitative goodwill impairment test found that the fair value of each reporting unit exceeded its carrying amount, indicating no goodwill impairment. The property and casualty auto insurance industry experienced challenges in 2022 caused by inflation, supply chain challenges, and the rising severity and frequency of claims.
Revenue from our Consumer segment increased $66.2 million in 2022 from 2021, or 20%, primarily due to increases in our personal loans, small business loans products, credit cards, and deposit accounts, partially offset by a decrease in student loans.
Revenue from our Consumer segment decreased $117.2 million in 2023 from 2022, or 30%, primarily due to decreases in our personal loans, credit cards, small business loans products and other credit products. Several of our other products in the Consumer segment experienced decreases in revenue in 2023 from 2022.
Our mortgage volume decreased 47% and revenue per lead decreased 10% in 2022 compared to 2021. The volume mix in our mortgage business was close to evenly balanced between refinance at 54% and purchase loans at 46% of total volume in 2022 as compared to refinance at 67% and purchase at 33% of total volume in 2021.
Existing home sales decreased 19% in 2023 compared to 2022. The volume mix in our mortgage business shifted to purchase at 55% and refinance at 45% of total volume in 2023 as compared to refinance at 54% and purchase at 46% of total volume in 2022.
General As of December 31, 2022, we had $298.8 million of cash and cash equivalents, compared to $251.2 million of cash and cash equivalents as of December 31, 2021. 46 Table of Contents We expect our cash and cash equivalents and cash flows from operations to be sufficient to fund our operating needs for the next twelve months and beyond.
We expect our cash and cash equivalents and cash flows from operations to be sufficient to fund our operating needs for the next twelve months and beyond. Our credit facility described below is an additional potential source of liquidity.
Revenue from our deposit accounts product increased $6.6 million in 2022 compared to 2021 due to an increase in the number of consumers and an increase in revenue earned per consumer. Student loans decreased $6.4 million in 2022 compared to 2021, due to a decrease in the number of consumers, partially offset by an increase in revenue earned per consumer.
Revenue from our purchase mortgage product decreased $37.9 million in 2023 compared to 2022 primarily due to decreases in revenue earned per consumer and in the number of consumers completing request forms.
Non-cash compensation expense, included in total compensation and benefits noted above, within general and administrative expense decreased in 2022, which resulted in an increase in net income from continuing operations in 2022 compared to 2021. For additional information, see Note—14-Stock-Based Compensation in the notes to the consolidated financial statements included elsewhere in this report.
We incurred a $4.2 million loss on the impairment of assets for our Ovation business in the first quarter of 2023. Non-cash compensation expense, included in total compensation and benefits noted above, within general and administrative expense decreased in 2023, which resulted in an increase in net income in 2023 compared to 2022.
Revenue from our credit cards product increased $6.8 million, or 7%, to $100.2 million in 2022 from $93.4 million in 2021 primarily due to an increase in revenue earned per click, partially offset by a decrease in the number of clicks. 39 Table of Contents For the periods presented, no other products in our Consumer segment represented more than 10% of revenue; however, certain other Consumer products experienced notable changes.
For the periods presented, no other products in our Consumer segment represented more than 10% of revenue; however, certain other Consumer products experienced notable changes.
Revenue from our Insurance segment decreased $27.1 million, or 8%, to $299.1 million in 2022 from $326.2 million in 2021 primarily due to a decrease in carrier budgets reducing the number of consumers completing request forms.
Revenue from our credit cards product decreased $38.2 million, or 38%, to $62.0 million in 2023 from $100.2 million in 2022 primarily due to a decrease in the number of clicks and a decrease in revenue earned per click.
See Note—15 Income Taxes in the notes to the consolidated financial statements included elsewhere in this report for additional information on the valuation allowance.
We incurred impairment charges of $114.5 million on our investments in equity securities during 2023. See Note 8—Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional information. The carrying value of our equity investments at December 31, 2023 is $60.1 million.
Depreciation The increase in depreciation expense in 2022 compared to 2021 was primarily the result of higher investment in internally developed software in recent years, to support the growth of our business in addition to depreciation on new assets related to our principal executive offices which we moved into in mid-2021. 41 Table of Contents Amortization of Intangibles The decrease in amortization of intangibles in 2022 compared to 2021 was due to certain intangible assets associated with our recent business acquisitions becoming fully amortized.
Amortization of Intangibles The decrease in amortization of intangibles in 2023 compared to 2022 was due to certain intangible assets associated with our recent business acquisitions becoming fully amortized. Goodwill Impairment We incurred a goodwill impairment charge of $38.6 million in 2023 in our Insurance reporting unit.
Our Consumer segment margin remained consistent, at 44% in 2022 compared to 43% in 2021. 43 Table of Contents Revenue from our personal loan product of $144.1 million increased 31% in 2022 compared to 2021 as debt consolidation was attractive with consumer credit card balances continuing to rise.
Our Consumer segment margin increased to 50% in 2023 compared to 44% in 2022. Revenue from our personal loan product of $100.1 million decreased 31% in 2023 compared to 2022 as our partners broadly tightened underwriting criteria in 2023, however there are indications for increased loan originations and wider credit appetite in 2024.
The 30-year mortgage interest rates increased from a monthly average of 3.1% in December 2021 to a monthly average of 6.36% in December 2022, according to Freddie Mac Near record home prices coupled with higher mortgage rates led to a 17% decrease in existing home sales in 2022 compared to 2021.
The 30-year mortgage interest rates increased from a monthly average of 6.36% in December 2022 to a monthly average of 6.82% in December 2023, according to Freddie Mac. Purchase transactions were negatively impacted by low for sale inventory and current homeowners resisting a move in favor of retaining a significantly lower rate on their existing loan.
Removed
Many of our products in the Consumer segment experienced increases in revenue in 2022 from 2021 due to the recovery from the impacts of the COVID-19 pandemic.
Added
Revenue from our credit products decreased $12.1 million, or 28%, in 2023 40 Table of Contents compared to 2022 primarily due to the closure of our Ovation credit services business at the end of the second quarter of 2023. Student loans decreased $5.7 million in 2023 compared to 2022, due to a d ecrease in the number of consumers.
Removed
The decrease in carrier budgets was due primarily to reduced customer acquisition activity for insurance carriers as they attempted to raise premium rates in response to inflationary pressures on claims. Our Home segment includes the following products: purchase mortgage, refinance mortgage, home equity loans and lines of credit, and real estate.
Added
Cost of revenue decreased in 2023 compared to 2022 primarily due to a decrease in compensation and benefits of $13.9 million, a decrease in website network hosting and server hosting fees of $2.4 million and a decrease in customer service fees of $1.5 million.
Removed
While we believe our three reportable segments have generally recovered from the impacts of the ongoing COVID-19 pandemic, we are continuously monitoring the impacts of the pandemic on the economy and any potential future impacts to our segment revenue.
Added
The decreases are primarily due to the Reduction Plan at the end of the first quarter of 2023, including shutting down the LendingTree customer call center, and the closure of our Ovation credit services business at the end of the second quarter of 2023.
Removed
This was partially offset by increases in technology, fees and charges, travel and entertainment, and other tax expense of $5.6 million, $2.0 million, $1.5 million, and $1.5 million, respectively. Additionally, losses on the disposal of assets increased $3.1 million in 2022 compared to 2021.
Added
Additionally, compensation and benefits decreased $12.9 million in 2023 compared to 2022.
Removed
Contingent consideration During 2022, we did not record contingent consideration expense. All earnouts were completed prior to 2022. During 2021, we recorded aggregate contingent consideration gains of $8.2 million due to adjustments in the estimated fair value of the earnout payment related to the QuoteWizard acquisition for which the earnout period ended in 2021.
Added
See Note 7 - Goodwill and Intangible Assets for additional information . 42 Table of Contents Restructuring and severance During September 2023, we initiated workforce reductions of 14 employees.
Removed
All employee separation costs are expected to be paid by the third quarter of 2023.
Added
We incurred $0.9 million in severance charges in 2023 in connection with the workforce reductions, consisting of cash expenditures for employee separation costs of approximately $0.7 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $0.2 million. The cash payments are expected to be substantially completed by the third quarter of 2024.
Removed
Interest expense Interest expense decreased in 2022 compared to 2021 primarily due to the adoption of Accounting Standards Update (“ASU”) 2020-06 on January 1, 2022, whereby we derecognized the remaining debt discounts on the 2022 Notes and 2025 Notes and therefore no longer recognize any amortization of debt discounts as interest expense, partially offset by an increase in interest from our Term Loan Facility.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed6 unchanged
Biggest changeAs of February 27, 2023, the Company had $248.8 million outstanding on its Term Loan Facility, and there were no outstanding borrowings under its Revolving Facility. Fluctuations in interest rates affect consumer demand for new mortgages and the level of refinancing activity which, in turn, affects lender demand for mortgage leads.
Biggest changeAs of February 28, 2024, the Company had $246.3 million outstanding on its Term Loan Facility, and there were no outstanding borrowings under its Revolving Facility. Fluctuations in interest rates affect consumer demand for new mortgages and the level of refinancing activity which, in turn, affects lender demand for mortgage leads.
However, increases in the amount lenders will pay per matched lead in this situation is limited by the overall cost models of our lenders, and our revenue earned per consumer can be adversely affected by the overall reduced demand for refinancing in a rising rate environment. 51 Table of Contents
However, increases in the amount lenders will pay per matched lead in this situation is limited by the overall cost models of our lenders, and our revenue earned per consumer can be adversely affected by the overall reduced demand for refinancing in a rising rate environment. 52 Table of Contents

Other TREE 10-K year-over-year comparisons