|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
26-2414818
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
|
TREE
|
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
Page
Number
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Revenue
|
$
|
220,251
|
|
|
$
|
310,605
|
|
|
$
|
687,661
|
|
|
$
|
851,416
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
13,220
|
|
|
17,671
|
|
|
40,936
|
|
|
51,651
|
|
||||
Selling and marketing expense
|
154,670
|
|
|
200,818
|
|
|
464,129
|
|
|
567,338
|
|
||||
General and administrative expense
|
33,705
|
|
|
30,323
|
|
|
94,276
|
|
|
89,391
|
|
||||
Product development
|
11,477
|
|
|
10,200
|
|
|
33,252
|
|
|
30,541
|
|
||||
Depreciation
|
3,535
|
|
|
2,696
|
|
|
10,463
|
|
|
7,737
|
|
||||
Amortization of intangibles
|
13,090
|
|
|
13,778
|
|
|
40,603
|
|
|
41,485
|
|
||||
Change in fair value of contingent consideration
|
6,658
|
|
|
3,839
|
|
|
7,711
|
|
|
21,221
|
|
||||
Severance
|
—
|
|
|
179
|
|
|
190
|
|
|
636
|
|
||||
Litigation settlements and contingencies
|
13
|
|
|
(92
|
)
|
|
(983
|
)
|
|
(291
|
)
|
||||
Total costs and expenses
|
236,368
|
|
|
279,412
|
|
|
690,577
|
|
|
809,709
|
|
||||
Operating (loss) income
|
(16,117
|
)
|
|
31,193
|
|
|
(2,916
|
)
|
|
41,707
|
|
||||
Other (expense) income, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(16,617
|
)
|
|
(4,845
|
)
|
|
(26,406
|
)
|
|
(15,408
|
)
|
||||
Other income
|
—
|
|
|
4
|
|
|
7
|
|
|
143
|
|
||||
(Loss) income before income taxes
|
(32,734
|
)
|
|
26,352
|
|
|
(29,315
|
)
|
|
26,442
|
|
||||
Income tax benefit (expense)
|
7,925
|
|
|
(1,889
|
)
|
|
14,866
|
|
|
11,552
|
|
||||
Net (loss) income from continuing operations
|
(24,809
|
)
|
|
24,463
|
|
|
(14,449
|
)
|
|
37,994
|
|
||||
Income (loss) from discontinued operations, net of tax
|
166
|
|
|
(20,199
|
)
|
|
(25,550
|
)
|
|
(22,024
|
)
|
||||
Net (loss) income and comprehensive (loss) income
|
$
|
(24,643
|
)
|
|
$
|
4,264
|
|
|
$
|
(39,999
|
)
|
|
$
|
15,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
13,033
|
|
|
12,890
|
|
|
12,992
|
|
|
12,805
|
|
||||
Diluted
|
13,033
|
|
|
14,632
|
|
|
12,992
|
|
|
14,629
|
|
||||
(Loss) income per share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(1.90
|
)
|
|
$
|
1.90
|
|
|
$
|
(1.11
|
)
|
|
$
|
2.97
|
|
Diluted
|
$
|
(1.90
|
)
|
|
$
|
1.67
|
|
|
$
|
(1.11
|
)
|
|
$
|
2.60
|
|
Income (loss) per share from discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.01
|
|
|
$
|
(1.57
|
)
|
|
$
|
(1.97
|
)
|
|
$
|
(1.72
|
)
|
Diluted
|
$
|
0.01
|
|
|
$
|
(1.38
|
)
|
|
$
|
(1.97
|
)
|
|
$
|
(1.51
|
)
|
Net (loss) income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(1.89
|
)
|
|
$
|
0.33
|
|
|
$
|
(3.08
|
)
|
|
$
|
1.25
|
|
Diluted
|
$
|
(1.89
|
)
|
|
$
|
0.29
|
|
|
$
|
(3.08
|
)
|
|
$
|
1.09
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
|
(in thousands, except par value and share amounts)
|
||||||
ASSETS:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
187,261
|
|
|
$
|
60,243
|
|
Restricted cash and cash equivalents
|
112
|
|
|
96
|
|
||
Accounts receivable (net of allowance of $1,638 and $1,466, respectively)
|
96,631
|
|
|
113,487
|
|
||
Prepaid and other current assets
|
27,585
|
|
|
15,516
|
|
||
Current assets of discontinued operations
|
1,172
|
|
|
84
|
|
||
Total current assets
|
312,761
|
|
|
189,426
|
|
||
Property and equipment (net of accumulated depreciation of $22,318 and $17,979, respectively)
|
48,877
|
|
|
31,363
|
|
||
Operating lease right-of-use assets
|
86,193
|
|
|
25,519
|
|
||
Goodwill
|
420,139
|
|
|
420,139
|
|
||
Intangible assets, net
|
140,977
|
|
|
181,580
|
|
||
Deferred income tax assets
|
92,649
|
|
|
87,664
|
|
||
Equity investment (Note 7)
|
80,000
|
|
|
—
|
|
||
Other non-current assets
|
5,262
|
|
|
4,330
|
|
||
Non-current assets of discontinued operations
|
16,731
|
|
|
7,948
|
|
||
Total assets
|
$
|
1,203,589
|
|
|
$
|
947,969
|
|
|
|
|
|
||||
LIABILITIES:
|
|
|
|
|
|
||
Revolving credit facility
|
$
|
—
|
|
|
$
|
75,000
|
|
Accounts payable, trade
|
4,895
|
|
|
2,873
|
|
||
Accrued expenses and other current liabilities
|
106,333
|
|
|
112,755
|
|
||
Current contingent consideration
|
25,068
|
|
|
9,028
|
|
||
Current liabilities of discontinued operations
|
300
|
|
|
31,050
|
|
||
Total current liabilities
|
136,596
|
|
|
230,706
|
|
||
Long-term debt
|
603,520
|
|
|
264,391
|
|
||
Operating lease liabilities
|
87,597
|
|
|
21,358
|
|
||
Non-current contingent consideration
|
10,107
|
|
|
24,436
|
|
||
Other non-current liabilities
|
4,760
|
|
|
4,752
|
|
||
Total liabilities
|
842,580
|
|
|
545,643
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
|
|
||
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
||
Preferred stock $.01 par value; 5,000,000 shares authorized; none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock $.01 par value; 50,000,000 shares authorized; 15,759,235 and 15,676,819 shares issued, respectively, and 13,117,917 and 13,035,501 shares outstanding, respectively
|
158
|
|
|
157
|
|
||
Additional paid-in capital
|
1,176,664
|
|
|
1,177,984
|
|
||
Accumulated deficit
|
(632,652
|
)
|
|
(592,654
|
)
|
||
Treasury stock; 2,641,318 shares
|
(183,161
|
)
|
|
(183,161
|
)
|
||
Total shareholders' equity
|
361,009
|
|
|
402,326
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,203,589
|
|
|
$
|
947,969
|
|
|
|
|
Common Stock
|
|
|
|
|
|
Treasury Stock
|
||||||||||||||||
|
Total
|
|
Number
of Shares
|
|
Amount
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Number
of Shares
|
|
Amount
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Balance as of December 31, 2019
|
$
|
402,326
|
|
|
15,677
|
|
|
$
|
157
|
|
|
$
|
1,177,984
|
|
|
$
|
(592,654
|
)
|
|
2,641
|
|
|
$
|
(183,161
|
)
|
Net income and comprehensive income
|
14,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,401
|
|
|
—
|
|
|
—
|
|
|||||
Non-cash compensation
|
11,917
|
|
|
—
|
|
|
—
|
|
|
11,917
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes
|
(5,087
|
)
|
|
27
|
|
|
—
|
|
|
(5,087
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of March 31, 2020
|
$
|
423,557
|
|
|
15,704
|
|
|
$
|
157
|
|
|
$
|
1,184,813
|
|
|
$
|
(578,252
|
)
|
|
2,641
|
|
|
$
|
(183,161
|
)
|
Net loss and comprehensive loss
|
(29,757
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,757
|
)
|
|
—
|
|
|
—
|
|
|||||
Non-cash compensation
|
13,158
|
|
|
—
|
|
|
—
|
|
|
13,158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes
|
(981
|
)
|
|
27
|
|
|
—
|
|
|
(981
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of June 30, 2020
|
$
|
405,977
|
|
|
15,731
|
|
|
$
|
157
|
|
|
$
|
1,196,990
|
|
|
$
|
(608,009
|
)
|
|
2,641
|
|
|
$
|
(183,161
|
)
|
Net loss and comprehensive loss
|
(24,643
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,643
|
)
|
|
—
|
|
|
—
|
|
|||||
Non-cash compensation
|
14,161
|
|
|
—
|
|
|
—
|
|
|
14,161
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes
|
4,646
|
|
|
28
|
|
|
1
|
|
|
4,645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of 0.50% Convertible Senior Notes, net
|
116,300
|
|
|
—
|
|
|
—
|
|
|
116,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of 0.625% Convertible Senior Notes, net
|
(107,882
|
)
|
|
—
|
|
|
—
|
|
|
(107,882
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Convertible note hedge transactions
|
(14,379
|
)
|
|
—
|
|
|
—
|
|
|
(14,379
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Warrant transactions
|
(33,171
|
)
|
|
—
|
|
|
—
|
|
|
(33,171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of September 30, 2020
|
$
|
361,009
|
|
|
15,759
|
|
|
$
|
158
|
|
|
$
|
1,176,664
|
|
|
$
|
(632,652
|
)
|
|
2,641
|
|
|
$
|
(183,161
|
)
|
|
|
|
Common Stock
|
|
|
|
|
|
Treasury Stock
|
||||||||||||||||
|
Total
|
|
Number
of Shares
|
|
Amount
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Number
of Shares
|
|
Amount
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Balance as of December 31, 2018
|
$
|
346,208
|
|
|
15,428
|
|
|
$
|
154
|
|
|
$
|
1,134,227
|
|
|
$
|
(610,482
|
)
|
|
2,618
|
|
|
$
|
(177,691
|
)
|
Net loss and comprehensive loss
|
(512
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(512
|
)
|
|
—
|
|
|
—
|
|
|||||
Non-cash compensation
|
14,053
|
|
|
—
|
|
|
—
|
|
|
14,053
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock
|
(3,976
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
(3,976
|
)
|
|||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes
|
(3,585
|
)
|
|
87
|
|
|
1
|
|
|
(3,586
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of March 31, 2019
|
$
|
352,188
|
|
|
15,515
|
|
|
$
|
155
|
|
|
$
|
1,144,694
|
|
|
$
|
(610,994
|
)
|
|
2,636
|
|
|
$
|
(181,667
|
)
|
Net income and comprehensive income
|
12,218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,218
|
|
|
—
|
|
|
—
|
|
|||||
Non-cash compensation
|
15,982
|
|
|
—
|
|
|
—
|
|
|
15,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes
|
(6,501
|
)
|
|
89
|
|
|
1
|
|
|
(6,502
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of June 30, 2019
|
$
|
373,887
|
|
|
15,604
|
|
|
$
|
156
|
|
|
$
|
1,154,174
|
|
|
$
|
(598,776
|
)
|
|
2,636
|
|
|
$
|
(181,667
|
)
|
Net income and comprehensive income
|
4,264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,264
|
|
|
—
|
|
|
—
|
|
|||||
Non-cash compensation
|
10,797
|
|
|
—
|
|
|
—
|
|
|
10,797
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock
|
(310
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(310
|
)
|
|||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes
|
626
|
|
|
31
|
|
|
—
|
|
|
626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of September 30, 2019
|
$
|
389,264
|
|
|
15,635
|
|
|
$
|
156
|
|
|
$
|
1,165,597
|
|
|
$
|
(594,512
|
)
|
|
2,637
|
|
|
$
|
(181,977
|
)
|
|
Nine Months Ended
September 30, |
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Cash flows from operating activities attributable to continuing operations:
|
|
|
|
|
|
||
Net (loss) income and comprehensive (loss) income
|
$
|
(39,999
|
)
|
|
$
|
15,970
|
|
Less: Loss from discontinued operations, net of tax
|
25,550
|
|
|
22,024
|
|
||
(Loss) income from continuing operations
|
(14,449
|
)
|
|
37,994
|
|
||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations:
|
|
|
|
||||
Loss (gain) on impairments and disposal of assets
|
686
|
|
|
(1,119
|
)
|
||
Amortization of intangibles
|
40,603
|
|
|
41,485
|
|
||
Depreciation
|
10,463
|
|
|
7,737
|
|
||
Non-cash compensation expense
|
39,236
|
|
|
40,832
|
|
||
Deferred income taxes
|
(15,489
|
)
|
|
(11,532
|
)
|
||
Change in fair value of contingent consideration
|
7,711
|
|
|
21,221
|
|
||
Bad debt expense
|
1,314
|
|
|
1,865
|
|
||
Amortization of debt issuance costs
|
2,241
|
|
|
1,463
|
|
||
Amortization of convertible debt discount
|
12,429
|
|
|
8,959
|
|
||
Loss on extinguishment of debt
|
7,768
|
|
|
—
|
|
||
Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities
|
2,490
|
|
|
302
|
|
||
Changes in current assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
15,541
|
|
|
(50,030
|
)
|
||
Prepaid and other current assets
|
(335
|
)
|
|
(865
|
)
|
||
Accounts payable, accrued expenses and other current liabilities
|
(9,733
|
)
|
|
11,047
|
|
||
Current contingent consideration
|
(2,670
|
)
|
|
(3,000
|
)
|
||
Income taxes receivable
|
65
|
|
|
4,513
|
|
||
Other, net
|
(1,655
|
)
|
|
8
|
|
||
Net cash provided by operating activities attributable to continuing operations
|
96,216
|
|
|
110,880
|
|
||
Cash flows from investing activities attributable to continuing operations:
|
|
|
|
||||
Capital expenditures
|
(20,386
|
)
|
|
(15,151
|
)
|
||
Proceeds from sale of fixed assets
|
—
|
|
|
24,060
|
|
||
Equity investment
|
(80,000
|
)
|
|
—
|
|
||
Acquisition of ValuePenguin, net of cash acquired
|
—
|
|
|
(105,578
|
)
|
||
Acquisition of QuoteWizard, net of cash acquired
|
—
|
|
|
482
|
|
||
Net cash used in investing activities attributable to continuing operations
|
(100,386
|
)
|
|
(96,187
|
)
|
||
Cash flows from financing activities attributable to continuing operations:
|
|
|
|
||||
Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of stock options
|
(1,421
|
)
|
|
(9,459
|
)
|
||
Proceeds from the issuance of 0.50% Convertible Senior Notes
|
575,000
|
|
|
—
|
|
||
Repurchase of 0.625% Convertible Senior Notes
|
(233,862
|
)
|
|
—
|
|
||
Payment for convertible note hedge on the 0.50% Convertible Senior Notes
|
(124,200
|
)
|
|
—
|
|
||
Termination of convertible note hedge on the 0.625% Convertible Senior Notes
|
109,881
|
|
|
—
|
|
||
Proceeds from the sale of warrants related to the 0.50% Convertible Senior Notes
|
61,180
|
|
|
—
|
|
||
Termination of warrants related to the 0.625% Convertible Senior Notes
|
(94,292
|
)
|
|
—
|
|
||
Net repayment of revolving credit facility
|
(75,000
|
)
|
|
(40,000
|
)
|
||
Payment of debt issuance costs
|
(16,398
|
)
|
|
(31
|
)
|
||
Contingent consideration payments
|
(3,330
|
)
|
|
(3,000
|
)
|
||
Purchase of treasury stock
|
—
|
|
|
(4,286
|
)
|
||
Other financing activities
|
(183
|
)
|
|
(3
|
)
|
||
Net cash provided by (used in) financing activities attributable to continuing operations
|
197,375
|
|
|
(56,779
|
)
|
||
Total cash provided by (used in) continuing operations
|
193,205
|
|
|
(42,086
|
)
|
||
Discontinued operations:
|
|
|
|
||||
Net cash used in operating activities attributable to discontinued operations
|
(66,171
|
)
|
|
(12,316
|
)
|
||
Total cash used in discontinued operations
|
(66,171
|
)
|
|
(12,316
|
)
|
||
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
|
127,034
|
|
|
(54,402
|
)
|
||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
|
60,339
|
|
|
105,158
|
|
||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period
|
$
|
187,373
|
|
|
$
|
50,756
|
|
|
|
|
|
||||
Non-cash investing activities:
|
|
|
|
||||
Capital additions from tenant improvement allowance
|
$
|
—
|
|
|
$
|
1,490
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Home
|
$
|
78,859
|
|
|
$
|
77,265
|
|
|
$
|
232,156
|
|
|
$
|
212,458
|
|
Credit cards
|
6,656
|
|
|
54,822
|
|
|
65,436
|
|
|
165,373
|
|
||||
Personal loans
|
12,505
|
|
|
43,873
|
|
|
52,841
|
|
|
117,513
|
|
||||
Other Consumer
|
29,216
|
|
|
53,234
|
|
|
87,142
|
|
|
118,735
|
|
||||
Total Consumer
|
48,377
|
|
|
151,929
|
|
|
205,419
|
|
|
401,621
|
|
||||
Insurance
|
92,500
|
|
|
74,849
|
|
|
248,156
|
|
|
213,882
|
|
||||
Other
|
515
|
|
|
6,562
|
|
|
1,930
|
|
|
23,455
|
|
||||
Total revenue
|
$
|
220,251
|
|
|
$
|
310,605
|
|
|
$
|
687,661
|
|
|
$
|
851,416
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Cash and cash equivalents
|
$
|
187,261
|
|
|
$
|
60,243
|
|
Restricted cash and cash equivalents
|
112
|
|
|
96
|
|
||
Total cash, cash equivalents, restricted cash and restricted cash equivalents
|
$
|
187,373
|
|
|
$
|
60,339
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Balance, beginning of the period
|
$
|
1,756
|
|
|
$
|
1,676
|
|
|
$
|
1,466
|
|
|
$
|
1,143
|
|
Charges to earnings
|
365
|
|
|
583
|
|
|
1,314
|
|
|
1,865
|
|
||||
Write-off of uncollectible accounts receivable
|
(483
|
)
|
|
(441
|
)
|
|
(1,152
|
)
|
|
(1,202
|
)
|
||||
Recoveries collected
|
—
|
|
|
5
|
|
|
10
|
|
|
17
|
|
||||
Balance, end of the period
|
$
|
1,638
|
|
|
$
|
1,823
|
|
|
$
|
1,638
|
|
|
$
|
1,823
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Goodwill
|
$
|
903,227
|
|
|
$
|
903,227
|
|
Accumulated impairment losses
|
(483,088
|
)
|
|
(483,088
|
)
|
||
Net goodwill
|
$
|
420,139
|
|
|
$
|
420,139
|
|
|
|
|
|
||||
Intangible assets with indefinite lives
|
$
|
10,142
|
|
|
$
|
10,142
|
|
Intangible assets with definite lives, net
|
130,835
|
|
|
171,438
|
|
||
Total intangible assets, net
|
$
|
140,977
|
|
|
$
|
181,580
|
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Technology
|
$
|
116,000
|
|
|
$
|
(70,004
|
)
|
|
$
|
45,996
|
|
Customer lists
|
77,300
|
|
|
(17,033
|
)
|
|
60,267
|
|
|||
Trademarks and tradenames
|
17,200
|
|
|
(9,062
|
)
|
|
8,138
|
|
|||
Website content
|
43,200
|
|
|
(26,767
|
)
|
|
16,433
|
|
|||
Other
|
5
|
|
|
(4
|
)
|
|
1
|
|
|||
Balance at September 30, 2020
|
$
|
253,705
|
|
|
$
|
(122,870
|
)
|
|
$
|
130,835
|
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Technology
|
$
|
116,200
|
|
|
$
|
(48,938
|
)
|
|
$
|
67,262
|
|
Customer lists
|
77,300
|
|
|
(12,452
|
)
|
|
64,848
|
|
|||
Trademarks and tradenames
|
17,200
|
|
|
(6,407
|
)
|
|
10,793
|
|
|||
Website content
|
51,000
|
|
|
(22,467
|
)
|
|
28,533
|
|
|||
Other
|
5
|
|
|
(3
|
)
|
|
2
|
|
|||
Balance at December 31, 2019
|
$
|
261,705
|
|
|
$
|
(90,267
|
)
|
|
$
|
171,438
|
|
|
Amortization Expense
|
||
Remainder of current year
|
$
|
12,475
|
|
Year ending December 31, 2021
|
42,738
|
|
|
Year ending December 31, 2022
|
25,256
|
|
|
Year ending December 31, 2023
|
8,602
|
|
|
Year ending December 31, 2024
|
6,747
|
|
|
Thereafter
|
35,017
|
|
|
Total intangible assets with definite lives, net
|
$
|
130,835
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
QuoteWizard
|
$
|
6,568
|
|
|
$
|
4,278
|
|
|
$
|
6,364
|
|
|
$
|
21,171
|
|
Ovation
|
90
|
|
|
(811
|
)
|
|
1,270
|
|
|
(825
|
)
|
||||
SnapCap
|
—
|
|
|
372
|
|
|
77
|
|
|
1,822
|
|
||||
DepositAccounts
|
—
|
|
|
—
|
|
|
—
|
|
|
(947
|
)
|
||||
Total changes in fair value of contingent consideration
|
$
|
6,658
|
|
|
$
|
3,839
|
|
|
$
|
7,711
|
|
|
$
|
21,221
|
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Accrued advertising expense
|
$
|
50,752
|
|
|
$
|
65,836
|
|
Accrued compensation and benefits
|
15,480
|
|
|
10,540
|
|
||
Accrued professional fees
|
3,510
|
|
|
1,560
|
|
||
Customer deposits and escrows
|
7,547
|
|
|
6,920
|
|
||
Contribution to LendingTree Foundation
|
3,333
|
|
|
3,333
|
|
||
Current lease liabilities
|
5,826
|
|
|
6,885
|
|
||
Other
|
19,885
|
|
|
17,681
|
|
||
Total accrued expenses and other current liabilities
|
$
|
106,333
|
|
|
$
|
112,755
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Operating lease cost
|
$
|
3,568
|
|
|
$
|
1,765
|
|
|
$
|
7,562
|
|
|
$
|
4,495
|
|
Short-term lease cost
|
11
|
|
|
21
|
|
|
49
|
|
|
69
|
|
||||
Total lease cost
|
$
|
3,579
|
|
|
$
|
1,786
|
|
|
$
|
7,611
|
|
|
$
|
4,564
|
|
|
September 30, 2020
|
|
December 31, 2019
|
||
Weighted average remaining lease term
|
13.0 years
|
|
|
5.0 years
|
|
Weighted average discount rate
|
5.0
|
%
|
|
4.7
|
%
|
|
Nine Months Ended
September 30, |
||||||
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
5,077
|
|
|
$
|
4,191
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
66,463
|
|
|
$
|
21,912
|
|
|
Operating Leases
|
||
Remainder of current year
|
$
|
2,118
|
|
Year ending December 31, 2021
|
8,949
|
|
|
Year ending December 31, 2022
|
12,619
|
|
|
Year ending December 31, 2023
|
12,409
|
|
|
Year ending December 31, 2024
|
10,885
|
|
|
Thereafter
|
105,398
|
|
|
Total lease payments
|
152,378
|
|
|
Less: Interest
|
46,096
|
|
|
Less: Tenant improvement allowances
|
12,859
|
|
|
Present value of lease liabilities
|
$
|
93,423
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Weighted average basic common shares
|
13,033
|
|
|
12,890
|
|
|
12,992
|
|
|
12,805
|
|
Effect of stock options
|
—
|
|
|
726
|
|
|
—
|
|
|
760
|
|
Effect of dilutive share awards
|
—
|
|
|
136
|
|
|
—
|
|
|
176
|
|
Effect of Convertible Senior Notes and warrants
|
—
|
|
|
880
|
|
|
—
|
|
|
888
|
|
Weighted average diluted common shares
|
13,033
|
|
|
14,632
|
|
|
12,992
|
|
|
14,629
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Cost of revenue
|
$
|
372
|
|
|
$
|
208
|
|
|
$
|
947
|
|
|
$
|
558
|
|
Selling and marketing expense
|
1,678
|
|
|
835
|
|
|
4,431
|
|
|
4,867
|
|
||||
General and administrative expense
|
10,356
|
|
|
8,627
|
|
|
29,208
|
|
|
30,534
|
|
||||
Product development
|
1,755
|
|
|
1,127
|
|
|
4,650
|
|
|
4,873
|
|
||||
Total non-cash compensation
|
$
|
14,161
|
|
|
$
|
10,797
|
|
|
$
|
39,236
|
|
|
$
|
40,832
|
|
|
Number of Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value(a)
|
|||||
|
|
|
(per option)
|
|
(in years)
|
|
(in thousands)
|
|||||
Options outstanding at January 1, 2020
|
777,871
|
|
|
$
|
69.87
|
|
|
|
|
|
||
Granted (b)
|
73,737
|
|
|
276.38
|
|
|
|
|
|
|||
Exercised
|
(47,500
|
)
|
|
161.39
|
|
|
|
|
|
|||
Forfeited
|
(717
|
)
|
|
291.12
|
|
|
|
|
|
|||
Expired
|
(2,036
|
)
|
|
352.68
|
|
|
|
|
|
|||
Options outstanding at September 30, 2020
|
801,355
|
|
|
82.54
|
|
|
3.87
|
|
$
|
180,661
|
|
|
Options exercisable at September 30, 2020
|
651,144
|
|
|
$
|
40.61
|
|
|
2.79
|
|
$
|
173,993
|
|
(a)
|
The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $306.89 on the last trading day of the quarter ended September 30, 2020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on September 30, 2020. The intrinsic value changes based on the market value of the Company's common stock.
|
(b)
|
During the nine months ended September 30, 2020, the Company granted stock options to certain employees and members of the board of directors with a weighted average grant date fair value per share of $138.75, calculated using the Black-Scholes option pricing model, which vesting periods include (a) immediate vesting on grant date (b) one year from grant date (c) three years from grant date and (d) four years from grant date.
|
Expected term (1)
|
5.00 - 6.25 years
|
|
Expected dividend (2)
|
—
|
|
Expected volatility (3)
|
52 - 60%
|
|
Risk-free interest rate (4)
|
0.33 - 0.96%
|
|
(1)
|
The expected term of stock options granted was calculated using the "Simplified Method," which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees.
|
(2)
|
For all stock options granted in 2020, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate.
|
(3)
|
The expected volatility rate is based on the historical volatility of the Company's common stock.
|
(4)
|
The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date.
|
|
Number of Options with Market Conditions
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value(a)
|
|||||
|
|
|
(per option)
|
|
(in years)
|
|
(in thousands)
|
|||||
Options outstanding at January 1, 2020
|
463,440
|
|
|
$
|
204.31
|
|
|
|
|
|
|
|
Granted (b)
|
19,126
|
|
|
275.82
|
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Options outstanding at September 30, 2020
|
482,566
|
|
|
207.14
|
|
|
7.02
|
|
$
|
50,162
|
|
|
Options exercisable at September 30, 2020
|
—
|
|
|
$
|
—
|
|
|
0.00
|
|
$
|
—
|
|
(a)
|
The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $306.89 on the last trading day of the quarter ended September 30, 2020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on September 30, 2020. The intrinsic value changes based on the market value of the Company's common stock.
|
(b)
|
During the nine months ended September 30, 2020, the Company granted stock options with a grant date fair value per share of $196.07, calculated using the Monte Carlo simulation model, which has a vesting date of March 31, 2024.
|
Expected term (1)
|
7.00 years
|
|
Expected dividend (2)
|
—
|
|
Expected volatility (3)
|
51%
|
|
Risk-free interest rate (4)
|
1.03%
|
|
(1)
|
The expected term of stock options with a market condition granted was calculated using the midpoint between the time of vesting and the end of the contractual term.
|
(2)
|
For all stock options with a market condition granted in 2020, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate.
|
(3)
|
The expected volatility rate is based on the historical volatility of the Company's common stock.
|
(4)
|
The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date.
|
|
RSUs
|
|||||
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
|
|||
|
|
|
(per unit)
|
|||
Nonvested at January 1, 2020
|
144,939
|
|
|
$
|
267.85
|
|
Granted
|
130,518
|
|
|
286.40
|
|
|
Vested
|
(62,167
|
)
|
|
240.57
|
|
|
Forfeited
|
(10,333
|
)
|
|
279.95
|
|
|
Nonvested at September 30, 2020
|
202,957
|
|
|
$
|
287.54
|
|
|
RSUs with Performance Conditions
|
|||||
|
Number of Units
|
|
Weighted Average Grant Date Fair Value
|
|||
|
|
|
(per unit)
|
|||
Nonvested at January 1, 2020
|
14,647
|
|
|
$
|
210.55
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(1,992
|
)
|
|
125.75
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Nonvested at September 30, 2020
|
12,655
|
|
|
$
|
223.90
|
|
|
RSAs with Performance Conditions
|
|||||
|
Number of Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
|
|
|
(per unit)
|
|||
Nonvested at January 1, 2020
|
47,608
|
|
|
$
|
340.25
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(17,853
|
)
|
|
340.25
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Nonvested at September 30, 2020
|
29,755
|
|
|
$
|
340.25
|
|
|
RSAs with Market Conditions
|
|||||
|
Number of Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
|
|
|
(per unit)
|
|||
Nonvested at January 1, 2020
|
26,674
|
|
|
$
|
340.25
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Nonvested at September 30, 2020
|
26,674
|
|
|
$
|
340.25
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||
Income tax benefit (expense)
|
$
|
7,925
|
|
|
$
|
(1,889
|
)
|
|
$
|
14,866
|
|
|
$
|
11,552
|
|
Effective tax rate
|
24.2
|
%
|
|
7.2
|
%
|
|
50.7
|
%
|
|
(43.7
|
)%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
||||||||||||||
Income tax benefit (expense) - excluding excess tax benefit on stock compensation and CARES Act
|
$
|
7,750
|
|
|
$
|
(4,705
|
)
|
|
$
|
6,780
|
|
|
$
|
(4,989
|
)
|
Excess tax benefit on stock compensation
|
175
|
|
|
2,816
|
|
|
1,982
|
|
|
16,541
|
|
||||
Income tax benefit from CARES Act
|
—
|
|
|
—
|
|
|
6,104
|
|
|
—
|
|
||||
Income tax benefit (expense)
|
$
|
7,925
|
|
|
$
|
(1,889
|
)
|
|
$
|
14,866
|
|
|
$
|
11,552
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
|
•
|
during the five business day period after any five consecutive trading day period in which, for each trading day of that period, the trading price (as defined in the 2025 Notes) per $1,000 principal amount of 2025 Notes for such trading day was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day;
|
•
|
if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the notes called for redemption; or
|
•
|
upon the occurrence of specified corporate events including but not limited to a fundamental change.
|
|
September 30,
2020 |
||
Gross carrying amount
|
$
|
575,000
|
|
Unamortized debt discount
|
115,427
|
|
|
Debt issuance costs
|
11,591
|
|
|
Net carrying amount
|
$
|
447,982
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on September 30, 2017 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
|
•
|
during the five business day period after any five consecutive trading day period in which, for each trading day of that period, the trading price (as defined in the 2022 Notes) per $1,000 principal amount of 2022 Notes for such trading day was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; or
|
•
|
upon the occurrence of specified corporate events including but not limited to a fundamental change.
|
|
September 30,
2020 |
|
December 31,
2019 |
||||
Gross carrying amount
|
$
|
169,692
|
|
|
$
|
299,991
|
|
Unamortized debt discount
|
12,639
|
|
|
31,789
|
|
||
Debt issuance costs
|
1,515
|
|
|
3,811
|
|
||
Net carrying amount
|
$
|
155,538
|
|
|
$
|
264,391
|
|
•
|
a base rate generally defined as the sum of (i) the greater of (a) the prime rate of Truist Bank, (b) the federal funds effective rate plus 0.5% and (c) the LIBO rate (defined below) on a daily basis applicable for an interest period of one month plus 1.0% and (ii) an applicable percentage of 0.25% to 1.0% based on a total consolidated debt to EBITDA ratio; or
|
•
|
a LIBO rate generally defined as the sum of (i) the rate for Eurodollar deposits in the applicable currency and (ii) an applicable percentage of 1.25% to 2.0% based on a total consolidated debt to EBITDA ratio.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Contingent consideration, beginning of period
|
$
|
28,517
|
|
|
$
|
50,219
|
|
|
$
|
33,464
|
|
|
$
|
38,837
|
|
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total net losses (gains) included in earnings (realized and unrealized)
|
6,658
|
|
|
3,839
|
|
|
7,711
|
|
|
21,221
|
|
||||
Purchases, sales and settlements:
|
|
|
|
|
|
|
|
||||||||
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Payments
|
—
|
|
|
—
|
|
|
(6,000
|
)
|
|
(6,000
|
)
|
||||
Contingent consideration, end of period
|
$
|
35,175
|
|
|
$
|
54,058
|
|
|
$
|
35,175
|
|
|
$
|
54,058
|
|
|
Fair Value at
September 30, 2020
|
Valuation Technique
|
Unobservable Input
|
Range (Weighted Average)(a)
|
|||
|
(in thousands)
|
|
|
|
|||
Contingent consideration
|
$
|
35,175
|
|
Option pricing model
|
Operating results growth rate
|
24.4% - 25.7% (25.1%)
|
|
|
|
|
Discount rate
|
6.8
|
%
|
|
Three Months Ended September 30, 2020
|
||||||||||||||
|
Home
|
Consumer
|
Insurance
|
Other
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||
Revenue
|
$
|
78,859
|
|
$
|
48,377
|
|
$
|
92,500
|
|
$
|
515
|
|
$
|
220,251
|
|
Segment marketing expense
|
53,693
|
|
26,730
|
|
55,457
|
|
513
|
|
136,393
|
|
|||||
Segment profit
|
25,166
|
|
21,647
|
|
37,043
|
|
2
|
|
83,858
|
|
|||||
Cost of revenue
|
|
|
|
|
13,220
|
|
|||||||||
Brand and other marketing expense
|
|
|
|
|
18,277
|
|
|||||||||
General and administrative expense
|
|
|
|
|
33,705
|
|
|||||||||
Product development
|
|
|
|
|
11,477
|
|
|||||||||
Depreciation
|
|
|
|
|
3,535
|
|
|||||||||
Amortization of intangibles
|
|
|
|
|
13,090
|
|
|||||||||
Change in fair value of contingent consideration
|
|
|
|
|
6,658
|
|
|||||||||
Litigation settlements and contingencies
|
|
|
|
|
13
|
|
|||||||||
Operating loss
|
|
|
|
|
(16,117
|
)
|
|||||||||
Interest expense, net
|
|
|
|
|
(16,617
|
)
|
|||||||||
Loss before income taxes and discontinued operations
|
|
|
|
|
$
|
(32,734
|
)
|
|
Three Months Ended September 30, 2019
|
||||||||||||||
|
Home
|
Consumer
|
Insurance
|
Other
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||
Revenue
|
$
|
77,265
|
|
$
|
151,929
|
|
$
|
74,849
|
|
$
|
6,562
|
|
$
|
310,605
|
|
Segment cost of revenue and marketing expense
|
49,173
|
|
86,760
|
|
44,846
|
|
6,178
|
|
186,957
|
|
|||||
Segment profit
|
28,092
|
|
65,169
|
|
30,003
|
|
384
|
|
123,648
|
|
|||||
Cost of revenue (exclusive of cost of advertising re-sold to third parties included above)
|
|
|
|
|
11,862
|
|
|||||||||
Brand and other marketing expense
|
|
|
|
|
19,670
|
|
|||||||||
General and administrative expense
|
|
|
|
|
30,323
|
|
|||||||||
Product development
|
|
|
|
|
10,200
|
|
|||||||||
Depreciation
|
|
|
|
|
2,696
|
|
|||||||||
Amortization of intangibles
|
|
|
|
|
13,778
|
|
|||||||||
Change in fair value of contingent consideration
|
|
|
|
|
3,839
|
|
|||||||||
Severance
|
|
|
|
|
179
|
|
|||||||||
Litigation settlements and contingencies
|
|
|
|
|
(92
|
)
|
|||||||||
Operating income
|
|
|
|
|
31,193
|
|
|||||||||
Interest expense, net
|
|
|
|
|
(4,845
|
)
|
|||||||||
Other income
|
|
|
|
|
4
|
|
|||||||||
Income before income taxes and discontinued operations
|
|
|
|
|
$
|
26,352
|
|
|
Nine Months Ended September 30, 2020
|
||||||||||||||
|
Home
|
Consumer
|
Insurance
|
Other
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||
Revenue
|
$
|
232,156
|
|
$
|
205,419
|
|
$
|
248,156
|
|
$
|
1,930
|
|
$
|
687,661
|
|
Segment cost of revenue and marketing expense
|
132,353
|
|
121,271
|
|
150,458
|
|
2,175
|
|
406,257
|
|
|||||
Segment profit (loss)
|
99,803
|
|
84,148
|
|
97,698
|
|
(245
|
)
|
281,404
|
|
|||||
Cost of revenue (exclusive of cost of advertising re-sold to third parties included above)
|
|
|
|
|
39,850
|
|
|||||||||
Brand and other marketing expense
|
|
|
|
|
58,958
|
|
|||||||||
General and administrative expense
|
|
|
|
|
94,276
|
|
|||||||||
Product development
|
|
|
|
|
33,252
|
|
|||||||||
Depreciation
|
|
|
|
|
10,463
|
|
|||||||||
Amortization of intangibles
|
|
|
|
|
40,603
|
|
|||||||||
Change in fair value of contingent consideration
|
|
|
|
|
7,711
|
|
|||||||||
Severance
|
|
|
|
|
190
|
|
|||||||||
Litigation settlements and contingencies
|
|
|
|
|
(983
|
)
|
|||||||||
Operating loss
|
|
|
|
|
(2,916
|
)
|
|||||||||
Interest expense, net
|
|
|
|
|
(26,406
|
)
|
|||||||||
Other income
|
|
|
|
|
7
|
|
|||||||||
Loss before income taxes and discontinued operations
|
|
|
|
|
$
|
(29,315
|
)
|
|
Nine Months Ended September 30, 2019
|
||||||||||||||
|
Home
|
Consumer
|
Insurance
|
Other
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||
Revenue
|
$
|
212,458
|
|
$
|
401,621
|
|
$
|
213,882
|
|
$
|
23,455
|
|
$
|
851,416
|
|
Segment cost of revenue and marketing expense
|
136,235
|
|
231,707
|
|
127,209
|
|
21,967
|
|
517,118
|
|
|||||
Segment profit
|
76,223
|
|
169,914
|
|
86,673
|
|
1,488
|
|
334,298
|
|
|||||
Cost of revenue (exclusive of cost of advertising re-sold to third parties included above)
|
|
|
|
|
33,453
|
|
|||||||||
Brand and other marketing expense
|
|
|
|
|
68,418
|
|
|||||||||
General and administrative expense
|
|
|
|
|
89,391
|
|
|||||||||
Product development
|
|
|
|
|
30,541
|
|
|||||||||
Depreciation
|
|
|
|
|
7,737
|
|
|||||||||
Amortization of intangibles
|
|
|
|
|
41,485
|
|
|||||||||
Change in fair value of contingent consideration
|
|
|
|
|
21,221
|
|
|||||||||
Severance
|
|
|
|
|
636
|
|
|||||||||
Litigation settlements and contingencies
|
|
|
|
|
(291
|
)
|
|||||||||
Operating income
|
|
|
|
|
41,707
|
|
|||||||||
Interest expense, net
|
|
|
|
|
(15,408
|
)
|
|||||||||
Other income
|
|
|
|
|
143
|
|
|||||||||
Income before income taxes and discontinued operations
|
|
|
|
|
$
|
26,442
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Gain from removal of HLC's assets and liabilities
|
—
|
|
|
4,515
|
|
|
—
|
|
|
4,515
|
|
||||
Other operating gains (expenses)
|
193
|
|
|
(32,182
|
)
|
|
(34,333
|
)
|
|
(34,492
|
)
|
||||
Income (loss) before income taxes
|
193
|
|
|
(27,667
|
)
|
|
(34,333
|
)
|
|
(29,977
|
)
|
||||
Income tax (expense) benefit
|
(27
|
)
|
|
7,468
|
|
|
8,783
|
|
|
7,953
|
|
||||
Net income (loss)
|
$
|
166
|
|
|
$
|
(20,199
|
)
|
|
$
|
(25,550
|
)
|
|
$
|
(22,024
|
)
|
|
Three Months Ended September 30,
|
|
|
||||||
My LendingTree
|
2020
|
2019
|
|
% Change
|
|||||
Cumulative Sign-ups as of quarter-end (in millions)
|
15.7
|
|
13.1
|
|
|
20
|
%
|
||
|
|
|
|
|
|||||
Revenue Contribution (in thousands)
|
$
|
9,647
|
|
$
|
22,997
|
|
|
(58
|
)%
|
% of total revenue
|
4.4
|
%
|
7.4
|
%
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2020
|
2019
|
$
Change
|
%
Change
|
|
2020
|
2019
|
$
Change |
%
Change |
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Home
|
$
|
78,859
|
|
$
|
77,265
|
|
$
|
1,594
|
|
2
|
%
|
|
$
|
232,156
|
|
$
|
212,458
|
|
$
|
19,698
|
|
9
|
%
|
Consumer
|
48,377
|
|
151,929
|
|
(103,552
|
)
|
(68
|
)%
|
|
205,419
|
|
401,621
|
|
(196,202
|
)
|
(49
|
)%
|
||||||
Insurance
|
92,500
|
|
74,849
|
|
17,651
|
|
24
|
%
|
|
248,156
|
|
213,882
|
|
34,274
|
|
16
|
%
|
||||||
Other
|
515
|
|
6,562
|
|
(6,047
|
)
|
(92
|
)%
|
|
1,930
|
|
23,455
|
|
(21,525
|
)
|
(92
|
)%
|
||||||
Revenue
|
220,251
|
|
310,605
|
|
(90,354
|
)
|
(29
|
)%
|
|
687,661
|
|
851,416
|
|
(163,755
|
)
|
(19
|
)%
|
||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
13,220
|
|
17,671
|
|
(4,451
|
)
|
(25
|
)%
|
|
40,936
|
|
51,651
|
|
(10,715
|
)
|
(21
|
)%
|
||||||
Selling and marketing expense
|
154,670
|
|
200,818
|
|
(46,148
|
)
|
(23
|
)%
|
|
464,129
|
|
567,338
|
|
(103,209
|
)
|
(18
|
)%
|
||||||
General and administrative expense
|
33,705
|
|
30,323
|
|
3,382
|
|
11
|
%
|
|
94,276
|
|
89,391
|
|
4,885
|
|
5
|
%
|
||||||
Product development
|
11,477
|
|
10,200
|
|
1,277
|
|
13
|
%
|
|
33,252
|
|
30,541
|
|
2,711
|
|
9
|
%
|
||||||
Depreciation
|
3,535
|
|
2,696
|
|
839
|
|
31
|
%
|
|
10,463
|
|
7,737
|
|
2,726
|
|
35
|
%
|
||||||
Amortization of intangibles
|
13,090
|
|
13,778
|
|
(688
|
)
|
(5
|
)%
|
|
40,603
|
|
41,485
|
|
(882
|
)
|
(2
|
)%
|
||||||
Change in fair value of contingent consideration
|
6,658
|
|
3,839
|
|
2,819
|
|
73
|
%
|
|
7,711
|
|
21,221
|
|
(13,510
|
)
|
(64
|
)%
|
||||||
Severance
|
—
|
|
179
|
|
(179
|
)
|
(100
|
)%
|
|
190
|
|
636
|
|
(446
|
)
|
(70
|
)%
|
||||||
Litigation settlements and contingencies
|
13
|
|
(92
|
)
|
105
|
|
114
|
%
|
|
(983
|
)
|
(291
|
)
|
(692
|
)
|
(238
|
)%
|
||||||
Total costs and expenses
|
236,368
|
|
279,412
|
|
(43,044
|
)
|
(15
|
)%
|
|
690,577
|
|
809,709
|
|
(119,132
|
)
|
(15
|
)%
|
||||||
Operating (loss) income
|
(16,117
|
)
|
31,193
|
|
(47,310
|
)
|
(152
|
)%
|
|
(2,916
|
)
|
41,707
|
|
(44,623
|
)
|
(107
|
)%
|
||||||
Other (expense) income, net:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense, net
|
(16,617
|
)
|
(4,845
|
)
|
11,772
|
|
243
|
%
|
|
(26,406
|
)
|
(15,408
|
)
|
10,998
|
|
71
|
%
|
||||||
Other income
|
—
|
|
4
|
|
(4
|
)
|
(100
|
)%
|
|
7
|
|
143
|
|
(136
|
)
|
(95
|
)%
|
||||||
(Loss) income before income taxes
|
(32,734
|
)
|
26,352
|
|
(59,086
|
)
|
(224
|
)%
|
|
(29,315
|
)
|
26,442
|
|
(55,757
|
)
|
(211
|
)%
|
||||||
Income tax benefit (expense)
|
7,925
|
|
(1,889
|
)
|
9,814
|
|
520
|
%
|
|
14,866
|
|
11,552
|
|
3,314
|
|
29
|
%
|
||||||
Net (loss) income from continuing operations
|
(24,809
|
)
|
24,463
|
|
(49,272
|
)
|
(201
|
)%
|
|
(14,449
|
)
|
37,994
|
|
(52,443
|
)
|
(138
|
)%
|
||||||
Income (loss) from discontinued operations, net of tax
|
166
|
|
(20,199
|
)
|
(20,365
|
)
|
(101
|
)%
|
|
(25,550
|
)
|
(22,024
|
)
|
3,526
|
|
16
|
%
|
||||||
Net (loss) income and comprehensive (loss) income
|
$
|
(24,643
|
)
|
$
|
4,264
|
|
$
|
(28,907
|
)
|
(678
|
)%
|
|
$
|
(39,999
|
)
|
$
|
15,970
|
|
$
|
(55,969
|
)
|
(350
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2020
|
2019
|
$
Change |
%
Change |
|
2020
|
2019
|
$
Change |
%
Change |
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Online
|
$
|
136,496
|
|
$
|
182,401
|
|
$
|
(45,905
|
)
|
(25
|
)%
|
|
$
|
405,993
|
|
$
|
501,119
|
|
$
|
(95,126
|
)
|
(19
|
)%
|
Broadcast
|
2,662
|
|
3,952
|
|
(1,290
|
)
|
(33
|
)%
|
|
12,140
|
|
20,885
|
|
(8,745
|
)
|
(42
|
)%
|
||||||
Other
|
2,967
|
|
2,885
|
|
82
|
|
3
|
%
|
|
9,588
|
|
9,370
|
|
218
|
|
2
|
%
|
||||||
Total advertising expense
|
$
|
142,125
|
|
$
|
189,238
|
|
$
|
(47,113
|
)
|
(25
|
)%
|
|
$
|
427,721
|
|
$
|
531,374
|
|
$
|
(103,653
|
)
|
(20
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2020
|
2019
|
$
Change |
%
Change |
|
2020
|
2019
|
$
Change |
%
Change |
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Home
|
$
|
25,166
|
|
$
|
28,092
|
|
$
|
(2,926
|
)
|
(10
|
)%
|
|
$
|
99,803
|
|
$
|
76,223
|
|
$
|
23,580
|
|
31
|
%
|
Consumer
|
21,647
|
|
65,169
|
|
(43,522
|
)
|
(67
|
)%
|
|
84,148
|
|
169,914
|
|
(85,766
|
)
|
(50
|
)%
|
||||||
Insurance
|
37,043
|
|
30,003
|
|
7,040
|
|
23
|
%
|
|
97,698
|
|
86,673
|
|
11,025
|
|
13
|
%
|
||||||
Other
|
2
|
|
384
|
|
(382
|
)
|
(99
|
)%
|
|
(245
|
)
|
1,488
|
|
(1,733
|
)
|
(116
|
)%
|
||||||
Segment profit
|
$
|
83,858
|
|
$
|
123,648
|
|
$
|
(39,790
|
)
|
(32
|
)%
|
|
$
|
281,404
|
|
$
|
334,298
|
|
$
|
(52,894
|
)
|
(16
|
)%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net (loss) income from continuing operations
|
$
|
(24,809
|
)
|
|
$
|
24,463
|
|
|
$
|
(14,449
|
)
|
|
$
|
37,994
|
|
Adjustments to reconcile to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of intangibles
|
13,090
|
|
|
13,778
|
|
|
40,603
|
|
|
41,485
|
|
||||
Depreciation
|
3,535
|
|
|
2,696
|
|
|
10,463
|
|
|
7,737
|
|
||||
Severance
|
—
|
|
|
179
|
|
|
190
|
|
|
636
|
|
||||
Loss (gain) on impairments and disposal of assets
|
134
|
|
|
609
|
|
|
686
|
|
|
(1,369
|
)
|
||||
Non-cash compensation expense
|
14,161
|
|
|
10,797
|
|
|
39,236
|
|
|
40,832
|
|
||||
Change in fair value of contingent consideration
|
6,658
|
|
|
3,839
|
|
|
7,711
|
|
|
21,221
|
|
||||
Acquisition expense
|
205
|
|
|
18
|
|
|
2,405
|
|
|
197
|
|
||||
Litigation settlements and contingencies
|
13
|
|
|
(92
|
)
|
|
(983
|
)
|
|
(291
|
)
|
||||
Interest expense, net
|
16,617
|
|
|
4,845
|
|
|
26,406
|
|
|
15,408
|
|
||||
Income tax (benefit) expense
|
(7,925
|
)
|
|
1,889
|
|
|
(14,866
|
)
|
|
(11,552
|
)
|
||||
Adjusted EBITDA
|
$
|
21,679
|
|
|
$
|
63,021
|
|
|
$
|
97,402
|
|
|
$
|
152,298
|
|
|
Nine Months Ended
September 30, |
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Net cash provided by operating activities
|
$
|
96,216
|
|
|
$
|
110,880
|
|
Net cash used in investing activities
|
(100,386
|
)
|
|
(96,187
|
)
|
||
Net cash provided by (used in) financing activities
|
197,375
|
|
|
(56,779
|
)
|
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)
|
||||||
7/1/20 - 7/31/20
|
|
945
|
|
|
$
|
339.59
|
|
|
—
|
|
|
$
|
179,673
|
|
8/1/20 - 8/31/20
|
|
1,129
|
|
|
$
|
315.35
|
|
|
—
|
|
|
$
|
179,673
|
|
9/1/20 - 9/30/20
|
|
2,841
|
|
|
$
|
305.96
|
|
|
—
|
|
|
$
|
179,673
|
|
Total
|
|
4,915
|
|
|
$
|
314.58
|
|
|
—
|
|
|
$
|
179,673
|
|
(1)
|
During July 2020, August 2020 and September 2020, 945 shares, 1,129 shares and 2,841 shares, respectively (totaling 4,915 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 Sixth Amended and Restated 2008 Stock and Award Incentive Plan and 2017 Inducement Grant Plan, as described above.
|
(2)
|
See the narrative disclosure above the table for further description of our publicly announced stock repurchase program.
|
Exhibit
|
|
Description
|
|
Location
|
|
|
|
|
|
|
|
3.1
|
|
|
|
Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed August 25, 2008
|
|
3.2
|
|
|
|
Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed November 15, 2017
|
|
31.1
|
|
|
|
†
|
|
31.2
|
|
|
|
†
|
|
32.1
|
|
|
|
††
|
|
32.2
|
|
|
|
††
|
|
101.INS
|
|
|
XBRL Instance Document — The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
†††
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
|
†††
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
†††
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
†††
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
†††
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
†††
|
104
|
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101)
|
|
†††
|
|
LENDINGTREE, INC.
|
|
|
|
|
|
By:
|
/s/ J.D. MORIARTY
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J.D. Moriarty
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Chief Financial Officer
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(principal financial officer and duly authorized officer)
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1.
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I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2020 of LendingTree, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Douglas R. Lebda
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Douglas R. Lebda
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Chairman and Chief Executive Officer
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(principal executive officer)
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1.
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I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2020 of LendingTree, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ J.D. Moriarty
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J.D. Moriarty
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Chief Financial Officer
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(principal financial officer)
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(1)
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the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020 of LendingTree, Inc. (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of LendingTree, Inc.
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/s/ Douglas R. Lebda
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Douglas R. Lebda
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Chairman and Chief Executive Officer
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(principal executive officer)
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(1)
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the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020 of LendingTree, Inc. (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of LendingTree, Inc.
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/s/ J.D. Moriarty
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J.D. Moriarty
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Chief Financial Officer
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(principal financial officer)
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