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LendingTree Reports Record Q1 2016 Results; Increasing 2016 Outlook

  • Record Revenue of $94.7 million; up 86% over first quarter 2015
  • Record Variable Marketing Margin of $34.1 million; up 61% over first quarter 2015
  • Net Income from Continuing Operations of $6.9 million
  • Record Adjusted EBITDA of $15.8 million; up 78% over first quarter 2015
  • Income per Diluted Share from Continuing Operations of $0.54; Adjusted Net Income per Share of $0.76
  • Record revenue from mortgage products of $55.0 million, up 49% over first quarter 2015
  • Record revenue from non-mortgage products of $39.7 million, up 186% over first quarter 2015
  • Increasing full-year 2016 Revenue & Variable Marketing Margin guidance

LendingTree, Inc. TREE, -7.80% operator of LendingTree.com, the nation's leading online loan marketplace, today announced results for the quarter ended March 31, 2016.

"We had an outstanding start to the year," said Doug Lebda, Chairman and CEO. "Every lending category experienced both quarter-over-quarter and year-over-year growth, exceeding our guidance across the board. Mortgage performed exceptionally well with purchase and refinance each experiencing impressive growth, once again outpacing the overall mortgage market. In non-mortgage, the growth trajectory continued across all categories. Personal loans, home equity and reverse mortgage each experienced triple-digit year over year growth and revenue from credit cards increased almost 40 times over the same quarter last year. We are thrilled with this quarter's results, and we are particularly excited about the long-term growth opportunities ahead."

Gabe Dalporto, Chief Financial Officer added, "Once again, we delivered record revenue, Variable Marketing Margin and Adjusted EBITDA. Our first quarter results clearly demonstrate the type of top and bottom-line growth this business is capable of. We are committed to delivering both near-term profits and long-term growth to our shareholders. Given our relative outperformance in the first quarter, we're choosing to accelerate investment in several key initiatives throughout the second quarter that are expected to yield gains in the second half of the year and beyond. With that in mind, we're increasing our revenue outlook for the full year and maintaining our Adjusted EBITDA guidance of $62 to $65 million which, at the mid-point, reflects year-over-year growth of 56 percent."

First Quarter 2016 Business Highlights

  • Revenue from mortgage products of $55.0 million represents an increase of 49% over first quarter 2015 and sequential growth of 17% compared to fourth quarter 2015. These results reflect substantial growth in both new purchase and refinance and further demonstrate our ability to grow market share. Mortgage originations nationwide increased 4% year over year and declined 14% sequentially, according to Mortgage Bankers Association.
  • Revenue from non-mortgage products of $39.7 million in the first quarter represents an increase of 186% over the first quarter 2015 and now comprises 42% of total revenue.
  • Notably, revenue from all of our lending categories grew compared to both the prior year and prior quarter periods.
  • Enrollment growth in My LendingTree continued, as more than 3 million consumers have now joined the My LendingTree personalization platform.

LendingTree Selected Financial Metrics

(In millions, except per share amounts)


















Q/Q





Y/Y



Q1 2016


Q4 2015


% Change



Q1 2015


% Change


Revenue by Product












Mortgage Products (1)

$

55.0



$

46.9



17

%



$

37.0



49

%


Non-Mortgage Products (2)

39.7



31.4



26

%



13.9



186

%


Total Revenue

$

94.7



$

78.3



21

%



$

50.9



86

%


Non-Mortgage % of Total

42

%


40

%





27

%
















Selling and Marketing Expense












Exchanges Marketing Expense (3)

$

60.6



$

50.3



20

%



$

29.7



104

%


Other Selling & Marketing

4.5



3.9



15

%



3.1



45

%


Selling and Marketing Expense

$

65.1



$

54.2



20

%



$

32.8



98

%














Variable Marketing Margin (4)

$

34.1



$

28.0



22

%



$

21.2



61

%


Variable Marketing Margin % of Revenue

36

%


36

%





42

%
















Income Before Income Taxes

$

11.7



$

8.1



44

%



$

5.7



105

%


Income Tax (Expense) / Benefit

$

(4.8)



$

23.9



N/A



$

(0.3)



N/A


Net Income from Continuing Operations

$

6.9



$

32.1



(79)%




$

5.4



28

%


Net Income from Cont. Ops. % of Revenue

7

%


41

%





11

%
















Net Income per Share from Cont. Ops.












Basic

$

0.58



$

2.69



(78)%




$

0.48



21

%


Diluted

$

0.54



$

2.47



(78)%




$

0.44



23

%














Adjusted EBITDA (5)

$

15.8



$

12.0



32

%



$

8.9



78

%


Adjusted EBITDA % of Revenue (5)

17

%


15

%





18

%
















Adjusted Net Income (5)

$

9.8



$

34.9



(72)%




$

7.9



24

%














Adjusted Net Income per Share (5)

$

0.76



$

2.69



(72)%




$

0.65



17

%


















(1)

Includes the purchase mortgage and refinance mortgage products.

(2)

Includes the home equity, reverse mortgage, personal loan, credit card, small business loan, student loan, auto loan, home services, insurance and personal credit products.

(3)

Defined as the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses, which excludes overhead, fixed costs and personnel-related expenses.

(4)

Defined as revenue minus Exchanges marketing expense and is considered an operating metric.

(5)

Adjusted EBITDA, adjusted EBITDA % of revenue, adjusted net income and adjusted net income per share are non-GAAP measures. Please see "LendingTree's Reconciliation of Non-GAAP Measures to GAAP" and "LendingTree's Principles of Financial Reporting" below for more information.

First Quarter 2016 Financial Highlights

  • Record consolidated revenue of $94.7 million represents an increase of $43.8 million, or 86%, over revenue in the first quarter 2015.
  • Record Variable Marketing Margin of $34.1 million represents an increase of $12.9 million, or 61%, over first quarter 2015. At 36% of revenue, Variable Marketing Margin percentage was consistent with the prior quarter.
  • Record Adjusted EBITDA of $15.8 million increased $6.9 million, or 78%, over first quarter 2015. Adjusted EBITDA as percent of revenue improved to 17%, up from 15% in fourth quarter 2015.
  • Income per diluted share from continuing operations of $0.54. Adjusted Net Income per share of $0.76 representing growth of 17% over first quarter 2015. Both GAAP and Adjusted Net Income per share reflect the full $4.8 million income tax expense recorded in accordance with GAAP.
  • During the first quarter 2015, the company repurchased 580 thousand shares of its stock at a weighted-average price per share of $69.97 for aggregate consideration of $40.6 million. As of March 31, 2015, the company has $56.7 million in repurchase authorization remaining.

Business Outlook - 2016

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