LendingTree (TREE) Q2 EPS Soars 197%

Key Points

• Adjusted earnings per share (non-GAAP) of $1.13 in Q2 2025 far exceeded expectations, beating analyst estimates by 197.4% (non-GAAP).

• Revenue (GAAP) climbed to $250.1 million in Q2 2025, up 19% year-over-year and ahead of forecasts.

• Profitability improved across all segments. Insurance, Consumer, and Home each posted double-digit year-over-year revenue growth.

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LendingTree (NASDAQ:TREE), a leading online marketplace connecting borrowers with lenders and insurers, reported its second quarter results on July 31, 2025. The headline news: the company delivered a dramatic earnings beat, reporting non-GAAP EPS of $1.13, exceeding the consensus estimate of $0.38 by $0.75, with adjusted earnings per share at $1.13 versus the $0.38 expected, and revenue (GAAP) coming in slightly ahead at $250.1 million. Compared to consensus estimates, these numbers exceeded expectations on both the bottom and top line. For LendingTree, the quarter stood out for its robust revenue growth across all segments and significant gains in profitability, reflecting strong operational execution and recent strategic investments.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.

Business Model and Recent Strategic Focus

LendingTree runs an online marketplace where consumers can compare financial services products, including mortgages, personal loans, small business loans, and insurance. The core of its business is the network of more than 400 partners—lenders and insurance carriers—who pay a fee when a consumer completes a request via its platform. This match-making model means LendingTree's success relies on attracting both consumers and quality partners, ensuring ample choice and competitive offers.

In recent years, LendingTree has stepped up efforts to diversify its product offerings and deepen its relationships with business partners. The company has specifically focused on scaling up its presence in segments like insurance and consumer loans. Investments in artificial intelligence (AI) and automation have been key strategic initiatives, aimed at improving user experience, efficiency, and the effectiveness of match-making between borrowers and service providers. Operational discipline and maintaining a flexible partner network have become central priorities, especially as interest rates and lending standards have shifted over time. Success for the company is now measured by growth across multiple verticals, strong partner engagement, and operational leverage that improves profitability as revenue rises.

Quarter Highlights: Financial and Segment Performance

LendingTree's results showed company-wide gains and the benefits of improved operating discipline. Adjusted earnings per share more than doubled year-over-year. Revenue (GAAP) increased 19% year-over-year in Q2 2025, with each core business segment—Insurance, Consumer, and Home—posting double-digit year-over-year revenue gains. Adjusted EBITDA, a non-GAAP measure of earnings before interest, taxes, depreciation, and amortization, rose sharply by 35% to $31.8 million.

The Insurance segment, which includes offerings like homeowners’ insurance and health insurance policy matching, saw revenue grow 21% to $147.2 million, while profit increased 10% to $40.0 million. This growth was driven by higher demand from carriers and improvements in how LendingTree targets and converts high-intent shoppers. However, the Insurance segment’s profit margin slipped to 27% from 30% compared to Q2 2024. Management attributed the margin compression to a competitive environment.

In the Consumer segment, which covers personal loans and small business loan products, revenue rose 12% year-over-year to $62.5 million (GAAP). and segment profit jumped 19% to $32.1 million. The segment’s profit margin expanded to 51%, up from 48% in the prior year quarter. Driving these gains was a 14% increase in personal loan revenue and a notable 61% rise in small business loan revenue, the latter attributed to a strategic investment in expanding LendingTree’s sales force. Management highlighted that, even with higher interest rates, lenders are writing more loans and are gradually expanding their willingness to take on riskier borrowers, which supports continued growth.

Home segment results benefited from a strategic focus on home equity loan products and the addition of more small lenders to the network. Revenue climbed 25% to $40.4 million, and segment profit soared 41% to $13.1 million, raising the segment profit margin to 32%. A 38% jump in home equity loan revenue compared to the prior year was a highlight. While the broader mortgage market remains sensitive to interest rates, LendingTree’s approach to network expansion has supported new growth in the Home segment.

Variable marketing margin—a non-GAAP measure of revenue minus direct advertising and marketing expenses—increased 18% year-over-year. indicating improved balance sheet strength, as evidenced by net leverage declining to 3x from 5x over the past year. The CEO described a steady business environment.

Artificial intelligence continues to be a major area of investment and forward development for the company. Management reported that nearly all employees have access to enterprise AI tools. Uses range from automating routine tasks to supporting marketing and product development, with the company emphasizing both improved efficiency and the potential for AI to drive better consumer experiences long term. No specific numbers were given for AI-driven impact yet, but leadership underlined the technology’s importance in its ongoing strategy.

Looking Ahead: Guidance and Focus Areas

For Q3 2025, LendingTree provided revenue guidance of $273–$281 million, with variable marketing margin (non-GAAP) expected to reach $86–$89 million, and adjusted EBITDA forecast between $34–$36 million. For FY2025, management projects revenue of $1.00–$1.05 billion, with improved profitability metrics (non-GAAP Adjusted EBITDA and Variable Marketing Margin) also guided higher for the full year. The company noted its outlook assumes no interest rate cuts or material easing in credit standards—meaning that actual results could trend higher if broader lending conditions improve. Management expects insurance segment revenue to further increase in the third quarter, and the company continues to invest in partner diversification and technology as levers for future growth.

LendingTree's results position it to benefit from positive trends in both insurance and loan products, but some challenges remain. Pressures on Insurance segment margins could persist in a competitive market, and further operational gains may depend on how effectively LendingTree leverages its AI investments. Investors will be monitoring the sustainability of segment growth, the company’s ability to deepen partner relationships, and LendingTree’s execution on technology and marketing improvements in the quarters ahead.

TREE does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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