Q1 2024 LendingTree Inc Earnings Call
Operator: Good day, and thank you for standing by, and welcome to the LendingTree, Inc. first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Andrew Wessel, VP of Investor Relations and Corporate Development. Please go ahead.
Good day, and thank you for standing by and welcome to the Lendingtree, Inc. First quarter 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone you then.
Here in the automated message of buys in your hand is raised.
Your question. Please press Star one again, please be advised that today's conference is being recorded.
I'd now like to hand, the conference over to your Speaker today, Andrew Wessel VP of Investor Relations and corporate development. Please go ahead.
Andrew N. Wessel: Thank you, Justin, and good morning to everyone joining us on the call to discuss LendingTree's first quarter 2024 financial results. On the call today are Doug Lebda, LendingTree's chairman and CEO, Scott Peyree, COO and president of Marketplace, and Trent Ziegler, CFO. As a reminder to everyone, we posted a detailed letter to shareholders on our investor relations website earlier today. And for the purposes of today's call, we will assume the listeners have read that letter and will focus on Q&A.
Andrew N. Wessel: Thank you Justin and good morning to everyone joining us on our call to discuss <unk> first quarter 2020 for financial results on the call today are Doug Lebda, Lendingtree, as chairman and CEO, Scott Perry CFO and president of marketplace.
Andrew N. Wessel: Ziegler CFO.
Andrew N. Wessel: Minder to everyone. We posted a detailed letter to shareholders on our Investor Relations website earlier today and for the purposes of today's call. We will assume the listeners to read that letter and we'll focus on Q&A.
Andrew N. Wessel: Before I hand the call over to Doug for his remarks, I remind everyone that during today's call, we may discuss LendingTree's expectations for future performance. However, any forward-looking statements that we make are subject to risks and uncertainties, and LendingTree's actual results could differ materially from the views expressed today. Many, but not all, of the risks we face are described in our periodic reports filed with the SEC. We will also discuss a variety of non-GAAP measures on the call today, and I refer you to today's press release and shareholder letter, both available on our website, for the comparable GAAP definitions and full reconciliations of non-GAAP measures to GAAP. And with that, Doug, please go ahead. Thank you, Andrew, and thank you.
Andrew N. Wessel: I hand, the call over to Doug for his remarks, I'll remind everyone that during today's call. We may discuss one increase expectations for future performance.
Speaker Change: Forward looking statements that we make are subject to risks and uncertainties and <unk> actual results could differ materially from the views expressed today, many but not all of the risks. We face are described in our periodic reports filed with the SEC.
Douglas R. Lebda: But we will also discuss a variety of non-GAAP measures on the call today and I refer you.
Speaker Change: For you to today's press release and shareholder letter both available on our website for the comparable GAAP definitions and full reconciliations of non-GAAP measures to GAAP.
Speaker Change: With that Doug. Please go ahead. Thank you Andrew and thank you to all who are with US on the call. Today. We are very excited to report first quarter adjusted EBITDA increased 48% from last year as our insurance segment produced very strong results with both revenue and BMD up double digits from a year ago many products in our.
Douglas R. Lebda: Thank you, Andrew, and thank you to all who are with us on the call today. We are very excited to report first quarter adjusted EBITDA increased 48% from last year as our insurance segment produced very strong results, with both revenue and VMD up double digits from a year ago. Many products in our consumer business generated strong sequential growth, a trend we expect to continue into the second quarter. The revenue outlook also continues to improve into the second quarter, providing us confidence that we are finally through the worst part of the cycle for our company.
Speaker Change: <unk> business generated strong sequential growth a trend we expect to continue into the second quarter.
Speaker Change: The revenue outlook continues to improve into the second quarter, providing us confidence. We're finally through the worst part of the cycle for our company, we forecast stable underwriting conditions at our lender partners combined with sizable demand growth from our insurance partners will return our business to revenue and adjusted EBITDA growth for the full year <unk>.
Speaker Change: In this segment performance our insurance business is generated 11% growth in both revenue and DMD over a difficult comp from last year Terrier partners steadily increased spending with us to acquire new customers, while a record volume of consumers again came to us looking for auto insurance policies following significant premium increases.
Speaker Change: Leases over the past year. The momentum has continued into the second quarter and we are now forecasting record revenue in this segment are.
Speaker Change: Our consumer segment performance was highlighted by 24% sequential growth in small business revenue as we mentioned on last quarter's call. We made a strategic decision in 2023 to opera optimize operating margins given the uncertain demand trends at many of our lenders we have been encouraged that underwriting conditions that most lend.
Douglas R. Lebda: We forecast stable underwriting conditions that our lender partners, combined with sizable demand growth from our insurance partners, will return our business to revenue and adjusted EBITDA growth for the full year. Jumping into segment performance, our insurance business generated 11% growth in both revenue and VMD over a difficult comp from last year. Terrier Partners steadily increased spending with us to acquire new customers, while a record volume of consumers again came to us looking for auto insurance policies following significant premium increases over the past year.
Speaker Change: Our partners have remained stable for some time.
Speaker Change: And so we are leaning into this increase certainty with additional marketing investments aimed at driving higher revenue in BMD for this segment across multiple product categories.
Speaker Change: Our home segment continues to perform a trough levels given the backdrop of higher mortgage rates.
Speaker Change: Low supply of homes for sale or home equity offering continues to provide most of the opportunity for us our partners in <unk> and our partners at home and we expect that the trend will continue for the remainder of the year.
Speaker Change: Last but certainly not least at the end of the quarter, we secured a new $175 million loan commitment from Apollo funds. The proceeds from this financing in combination with existing cash on our balance sheet and future free cash flow provide us with ample liquidity to meet our remaining convertible note maturity next year.
Douglas R. Lebda: The momentum has continued into the second quarter, and we are now forecasting record revenue for the second quarter. Our consumer segment performance was highlighted by 24% sequential growth in small business revenue. As we mentioned on last quarter's call, we made a strategic decision in 2023 to optimize operating margins, given the uncertain demand trends at many of our lenders. However, we have been encouraged that underwriting conditions at most of our lender partners have remained stable for some time.
Speaker Change: Would expect leverage of four times or less once we've retired the 2025 convertible notes and we look to continue optimizing our capital structure thereafter, we.
Speaker Change: We are happy to have addressed this financing, which enables us to focus solely on improving our business and our financial results going forward.
Speaker Change: And we can take any questions.
Speaker Change: And thank you.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star. One again, please standby will be compile the Q&A roster and one moment for your first question.
Douglas R. Lebda: And so we are leaning into this increased certainty with additional marketing investments aimed at driving higher revenue and VMD for the segment across multiple product categories. However, our home segment continues to perform at trough levels, given the backdrop of higher mortgage rates and a low supply of homes for sale. Our home equity offering continues to provide most of the opportunity for us and our partners at home, and we expect that the trend will continue for the remainder of the year.
Speaker Change: And our first question comes from Youssef Squali from <unk> Securities. Your line is now open.
Youssef Houssaini Squali: Great. Thank you very much and good morning, guys.
Youssef Houssaini Squali: I guess on the guide.
Youssef Houssaini Squali: I was just wondering if you can help us better understand your thinking in terms of the rates environment.
Youssef Houssaini Squali: So what kind of rate environment is baked into that mid single digit revenue growth for the year I guess, we went from expecting six cuts.
Youssef Houssaini Squali: May be may be one or two perhaps even a potential hike by year end.
Youssef Houssaini Squali: Does that or how much risk does that pose to that guide I guess, what I'm trying to get to is how much of the guide is really within your control versus just macro and then in your efforts to lean into marketing again or insurance and consumer.
Douglas R. Lebda: Last but certainly not least, at the end of the quarter, we secured a new $175 million loan commitment from Apollo Fund. The proceeds from this financing, in combination with existing cash on our balance sheet and future free cash flow, will provide us with ample liquidity to meet our remaining convertible note maturity needs. We would expect leverage of four times or less once we've retired the 2025 convertible notes, and we look to continue optimizing our capital structure thereafter. We are happy to have secured this financing, which enables us to focus solely on improving our business and our financial results going forward. We could take any question,
Youssef Houssaini Squali: What gives you confidence that this isn't the right time, I guess for insurance I understand it for consumer maybe you can.
Youssef Houssaini Squali: To help us better understand.
Speaker Change: The drivers there thank you.
Speaker Change: Let me this is Doug I'll start at a high level and then trends Scott can.
Douglas R. Lebda: Can chime in.
Douglas R. Lebda: We don't have any plans in our guide for macro.
Douglas R. Lebda: Rate cuts and things like that.
Douglas R. Lebda: And trend can talk more about that but I hope that gives you confidence in in terms of the leaning in on <unk>.
Douglas R. Lebda: Some of the.
Douglas R. Lebda: Consumer categories.
Douglas R. Lebda: If we see which we're seeing increasing demand.
Douglas R. Lebda: It pays for us to go spend more money and increase simple level increased your beds across search and display and other things do that at a lower margin profile.
Douglas R. Lebda: <unk> margin profile, then you run it in the past when we were really optimizing for very short term DMD.
Operator: And thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And one moment for our first question. And our first question comes from Youssef Squali from Chewist Securities. Your line is now open.
Douglas R. Lebda: And that's what we're doing so it's profitable spend it just comes at a lower margin.
Speaker Change: Yes, just to add to that you said youll recall, when we introduced the full year guide last quarter.
Speaker Change: We were pretty clear about the fact that we didn't we weren't baking in any substantial.
Speaker Change: Substantial macro improvement rate cuts or otherwise, we expected mortgage to kind of stay where it is for the for the remainder of the year.
Speaker Change: Similar similar macro backdrop, our consumer and we obviously did expect insurance to get better than it is right and so the increased revenue guide.
Speaker Change: It is largely a function of increasing confidence in the insurance business.
Youssef Houssaini Squali: Great, thank you very much and good morning, guys. I guess on the gut, I was just wondering if you could help us better understand your thinking in terms of the interest rate environment. So, what kind of interest rate environment is baked into that mid single-digit revenue growth for the year? I guess we went from expecting 6 cuts to maybe, maybe 1 or 2, perhaps even a potential hike by year end.
Speaker Change: And we're seeing that play out four months into the year.
Speaker Change: And then to a lesser degree kind.
Speaker Change: Kind of piggybacking on your second question, obviously, we are leaning in a bit.
Speaker Change: More aggressively into the marketing side to drive top line.
Speaker Change: And wallet share improvements, particularly in consumer.
Speaker Change: Okay.
Speaker Change: Great. Thank you both.
Speaker Change: Go ahead.
Speaker Change: And thank you.
Speaker Change: And one moment for our next question.
Speaker Change: And our next question comes from Jed Kelly from Oppenheimer <unk> Company. Your line is now open.
Jed Kelly: Hey, Great just circling up can you can you talk about your comments around the stable stable lending environment.
Youssef Houssaini Squali: Does that, or how much risk does that post to that guide? I guess what I'm trying to get to is how much of the guide is really within your control versus just macro and then in your efforts to lean into marketing again for insurance and consumers. What gives you confidence that this is the right time?
Jed Kelly: What's giving you the confidence to leave.
Jed Kelly: Lean back in and then in the insurance segment.
Jed Kelly: How should we view the outlook maybe over the next 12 to 18 months I know, it's been really volatile.
Jed Kelly: And can you talk about how we should think about periods, where your older Ernie.
Douglas R. Lebda: I guess for insurance, I understand it. For consumers, maybe you can help us better understand the kind of drivers there. Thank you.
Jed Kelly: Scott do you want to take up.
Scott Perry: Yeah sure I'll take that.
Scott Perry: Let's start on the consumer economy and to answer your questions Adam follow up a little bit on <unk> question, there on just leaning into consumer.
Douglas R. Lebda: Yeah, let me, this is Doug. I'll start at a high level, and then Trent and Scott can chime in. We don't have any plans in our guide for macro, you know, rate cuts and things like that.
Scott Perry: Hi.
Scott Perry: And the.
Jed Kelly: The reality is at the higher rate.
Jed Kelly: A lot of consumers are just becoming more accepting of those rates and you do still see from the consumer segment strong demand in.
Jed Kelly: Home equity has been increasing in demand personal loans that strong demand from consumers small business loans as strong demand for consumers, but when we see we see a level of stability with our clients over the past 12 to 18 months. They kept tightening their underwriting standards constantly as rates were going up and theres concerns about delinquency.
Douglas R. Lebda: And Trent can talk more about that, but I hope that gives you confidence. And in terms of the leaning in on... some of the consumer categories. If we see, which we're seeing increasing demand, it pays for us to go spend more money and increase, you know, at a simple level, your bids across search and display and other things. Do that at a lower margin profile, VMD margin profile than you've run it at in the past when we were really optimizing for a very short-term VMD. And that's what we're doing. So it's a profitable spend; it just comes at a lower cost.
Jed Kelly: Well really over the past.
Jed Kelly: Three to four months, we've really seen a leveling off of that.
Jed Kelly: Our client partners still have tight underwriting standards, but theyre not tightening anymore. So that has given us a low level of stability Wacker.
Jed Kelly: We do see overall lower RPM in general, but we still see high consumer demand.
Jed Kelly: Don't have the chaos of Rpm's, continuing to lower overtime, so that lets us be more consistent with our marketing to be more consistent with our projected.
Trent Ziegler: Yeah, just to add to that, Youssef, when we introduced the full year guide last quarter, we were pretty clear about the fact that we weren't baking in any, you know, substantial macro improvement, rate cuts, or otherwise. We expected mortgages to kind of stay where they are for the remainder of the year, a similar macro backdrop for consumers. And we obviously did expect insurance to get better, and it is, right?
Jed Kelly: <unk> learning projected revenue models.
Jed Kelly: Our media campaigns.
Jed Kelly: And as I've talked about.
Jed Kelly: Over the past few earnings calls our real focus on the operational efficiency of more effective cross selling the product massively alternative product consumers can't get the primary product they are seeking.
Jed Kelly: Better right pricing with our clients to open up further budget to make sure that profitable and everything to buying with that and at the end of the day better revenue attribution models.
Trent Ziegler: And so the increased revenue guide is largely a function of increasing confidence in the insurance business. And we're seeing that play out, you know, four months into the year. And then, to a lesser degree, kind of piggybacking on your second question, obviously, we are leaning in a bit more aggressively on the marketing side to drive top line and wallet share improvements, particularly in consumer.
Jed Kelly: And then our machine learning media algorithms can use more smartly by media all of those things have added up to our ability to <unk>.
Jed Kelly: <unk> lean in and gain market share in the important media marketplaces out there where consumers are shopping for these products.
Jed Kelly: In Q2.
Youssef Houssaini Squali: Great, thank you both.
Jed Kelly: Bluntly honest, we're pretty excited with what's been happening in the past few months and what we expect to happen.
Operator: And thank you. And one moment for our next question. And our next question comes from Jed Kelly from Oppenheimer & Company. Your line is now open.
Jed Kelly: At the end of the year, even in the down environment in London, and then to answer your Big picture question on insurance over the next 18 months I mean, I would just say insurances.
Jed Kelly: Hey, Greg, just circling back, can you talk about your comments around the stable lending environment and what's giving you the confidence to lean back in, and then in the insurance segment. How should we view the outlook maybe for the next 12 to 18 months? I know it's been really volatile, and can you talk about, you know, how we should think about periods where you're overhearding?
Jed Kelly: It's back.
Jed Kelly: It's fully back it's not actually that fully back because they're still opening up we even have a number of our clients.
Jed Kelly: Cost of new states.
Jed Kelly: Yes couple of days.
Jed Kelly: But we are seeing broad based.
Jed Kelly: Whether it's local agents, whether it's corporate.
Jed Kelly: Buyers, whether it's writing policies through our agency, everyone is opening up product and geography.
Jed Kelly: Across the board, we believe that well.
Jed Kelly: Well in March.
Jed Kelly: I believe that carriers are in a very profitable period of time.
Operator: Oop. Bye.
Scott Peyree: Yeah, sure. I'll take that.
Scott Peyree: To start on the consumer and kind of answer your question, Jed, and follow up a little bit on Youssef's question there on just leaning into consumers and the reality is it's a higher rate. A lot of consumers are just becoming more accepting of those rates, and you do still see strong demand from the consumer segment. Home equity has been increasing in demand, personal loans are in strong demand from consumers, and small business loans are in strong demand from consumers.
Jed Kelly: So I feel we're on the front end.
Jed Kelly: Super cycle in insurance in the next couple of years, where carriers have returned to profitability, but due to the high rates of insurance policies right now.
Jed Kelly: Hi, consumer demands are our consumer demand was up 19% year over year in Q1.
Jed Kelly: Shopping for insurance quotes.
Jed Kelly: It's going to continue for a while so.
Jed Kelly: I think we're on a long runway in insurance right now.
Speaker Change: Thank you.
Scott Peyree: So when we see a level of stability with our clients, over the past 12-18 months, you know, they kept tightening their up-riding standards constantly as rates were going up, there were concerns about delinquency. Well, really, over the past... 3-4 months.
Speaker Change: Scott was breaking up a little bit there did you get.
Speaker Change: Do you have any follow ups on that.
Speaker Change: No.
Speaker Change: What is clear.
Speaker Change: Perfect.
Speaker Change: And thank you.
Speaker Change: And one moment for our next question.
Speaker Change: And our next question comes from Ryan Thomas CLO from <unk>. Your line is now open.
Ryan John Tomasello: Hi, everyone. Thanks for taking the questions just wanted to start with trend just on unpacking.
Scott Peyree: We've really seen a leveling off of that. So our client partners still have tight underwriting, but they're not tightening anymore.
Ryan John Tomasello: Some of the guideposts for the year.
Ryan John Tomasello: Revenue growth in Vms.
Ryan John Tomasello: Baked into the guide.
Ryan John Tomasello: By segment, maybe for <unk> and the full.
Ryan John Tomasello: Full year.
Ryan John Tomasello: Overall, how much.
Scott Peyree: So that has given us a level of stability where we do see overall lower RPLs in general, but we still see high consumer demand, and we don't have the chaos of RPLs continuing to fall over time. So that lets us be more consistent with our marketing, be more consistent with our projected learning, and projected revenue models to make our media campaigns more efficient. And as I've talked about over the past few earnings calls, you know, real focus on the operational efficiency of, you know, more effective cross-selling of products, matching alternative products when consumers can't get the primary product they're seeking, you know, better right pricing with our clients to open up further budgets to make sure they're profitable and everything they're buying with us. And, at the end of the day, better revenue attribution models that our machine learning media algorithms can use to more smartly buy media.
Ryan John Tomasello: Of the revenue guide increase is being driven by <unk>.
Ryan John Tomasello: And churns versus consumer driven by the increased marketing effort. It sounds like you are alluding to more of it being driven by insurance, but.
Speaker Change: Just curious if you can give us some handholding for all the different moving pieces by segment here for the guidance. Thanks.
Speaker Change: Yes happy to.
Speaker Change: Yes.
Speaker Change: On a full year revenue guide.
Speaker Change: Majority of that is driven by insurance and it's it's based on what we're what we're already seeing a month into the second quarter.
Speaker Change: As it relates to margin profile.
Speaker Change: <unk>.
Speaker Change: We assume home remains relatively stable compared to where it's where it's been for the last couple of quarters.
Speaker Change: Insurance as one would expect right as the revenue opportunity continues to unlock as both the carriers and our competitors get more aggressive we do expect margins to contract.
Speaker Change: A little bit there right and so it's been running in the low forties.
Speaker Change: <unk> <unk> in Q1, and we expect that to trend down a little bit.
Speaker Change: And then consumer will continue to remain very high and healthy but.
Scott Peyree: All of those things have added up to our ability to profitably lean in and gain market share in the important media marketplaces out there where consumers are shopping for these products. And to be bluntly honest, we're pretty excited with what's been happening in the past few months and what we expect to happen through the end of the year, even in this down environment. And then to answer your big picture question on insurance over the next 18 months, I mean, I would just say insurance is... It's coming back. It's fully back.
Speaker Change: Based on some of the dynamics, we've been talking about.
Speaker Change: We would argue that in the back half of last year, they were sort of a naturally high the margin profile and many of those businesses and so we would expect those to.
Speaker Change: Yes, it ticked back down closer to 50%.
Speaker Change: And then any color on just.
Speaker Change: Topline revenue growth by segment trends that you can give us.
Speaker Change: Yes, I mean, stopping short of guiding by segment.
Speaker Change: The insurance business clearly as we said is driving most of that incremental increase.
Speaker Change: Double digit growth in Q1, which is the toughest comp that we face relative to last year. So we would expect that to accelerate pretty substantially as we continue throughout the year.
Scott Peyree: And it's not, I shouldn't say fully back because they're still opening up. We even have a number of our clients opening up new space on May 1st, just a couple days. But we are seeing broad-based, whether it's local agents, whether it's corporate, Greg Byers, whether it's writing policies through our agency, everyone is opening up products across the board. We believe that will continue in the months ahead. I believe that carriers are ending a very profitable period of time.
Speaker Change: Sure.
Speaker Change: The other businesses I would say, there's not a ton of incremental revenue upside consumer.
Speaker Change: Modest modest contributor to that incremental increase on a full year basis.
Speaker Change: The only thing I'd add is.
Speaker Change: For everybody to keep remembering the core business flywheel, which is we get demand from clients lenders insurance companies. Then we go fill that as.
Speaker Change: As efficiently as we can and if demand exceeds supply customers. Then we go out and go get more customers. It's one of the great things about our business models, we can flex up that incremental spend comes at lower margin than we do market up to the last profitable dollar so.
Scott Peyree: So, I feel we're on the front end of what I call a super cycle in insurance for the next couple of years, where carriers have returned to profitability. But due to the high rates of insurance policies right now, you get high consumer demand. Our consumer demand was up 19% year over year in Q1 among just people shopping for insurance quotes. And that's going to continue for a while. So, I think we're on a long runway in insurance right now.
Speaker Change: Seeing a.
Speaker Change: Higher dollar of <unk> and a lower percentages of that margin is generally for me a sign of health of the business because it shows that demand is higher than supply.
Speaker Change: And so I just wanted to make that point to just tell people like we literally wake up every day and say from a business standpoint, how much BMD can we generate the other thing I'd add is around the different trends comment around not guiding at the segment.
Operator: Thank you. And I know Scott was breaking up a little bit there. Did you have any follow-ups on that? No, I... Is that all clear?
Jed Kelly: No, everyone's clear. Thanks.
Speaker Change: Product level.
Speaker Change: The great thing about this diversification we've put on in the last few years is that at any given time demand and supply of each of these marketplaces have their own dynamics and I think we can say like overall everything that Scott just said is absolutely right like we're seeing net increase demand from clients. We're also.
Operator: And one moment for our next question. And our next question comes from Ryan Tomasello from KBW. Your line is now open.
Ryan John Tomasello: Hey everyone, thanks for taking the questions. I just wanted to start with Trent on unpacking some of the guideposts for the year for revenue growth and VMMs baked into the guide by segment maybe for 2Q in the full year. Overall, how much of the Revenue Guide increases are being driven by insurance versus consumer, driven by increased marketing efforts? Sounds like you're alluding to more of it being driven by insurance, but just curious if you can give us some hand-holding for all the different moving pieces by segment here for the guide. Thank you.
Speaker Change: <unk>.
Speaker Change: And I'll give a lot of credit to Scott and his team on this.
Speaker Change: Done a lot better at operational.
Speaker Change: Operational efficiencies and putting some stuff in that.
Speaker Change: Short term things that Scott just hit on.
Speaker Change: And so therefore, we can we can lean in.
Speaker Change: And just.
Speaker Change: One last follow up here to put a finer point on the reinvesting some of the margin back.
Speaker Change: To marketing just trying to understand why we're not seeing BMD.
Speaker Change: Guide up here.
Speaker Change: Despite the significant revenue guide up I mean, when should we expect these marketing efforts to.
Speaker Change: Start to translate into more of Ian.
Speaker Change: <unk> dollars. It sounds like you do expect to spend to be profitable. So just trying to understand the puts and takes there.
Trent Ziegler: Yeah, happy to. Yeah, I mean, on the full-year revenue guide, the vast majority of that is driven by insurance. And it's, you know, it's based on what we're already seeing a month into the second quarter. As it relates to the margin profile, um... We assume home remains relatively stable compared to where it's been for the last couple of quarters. You know, insurance, as one would expect, right, as the revenue opportunity continues to unlock, as both the carriers and our competitors get more aggressive, we do expect margins to contract a little bit there, right?
Speaker Change: Yes.
Speaker Change: I would say.
Speaker Change: I would say there is some aspect of it that is.
Speaker Change: Certainly conservatism.
Speaker Change: And wanting to not wanting to.
Speaker Change: And wanting to give us enough flexibility so that we can.
Speaker Change: Do the best we can.
Speaker Change: We always try to do better, but we're just beginning this over the last couple of months and we want to make sure that.
Speaker Change: We are in the margin for margin of safety.
Speaker Change: Got it and I was taken out.
Speaker Change: Got it it's important also.
Speaker Change: Once you.
Speaker Change: Grow our revenue to have higher market share higher.
Speaker Change: The more significant relationships with our clients more options for our clients to have which gives us more opportunities to optimize in the future. Some.
Trent Ziegler: And so, you know, it's been running in the low 40s, high 30s in Q1, and we expect that to trend down a little bit. And then consumers will continue to remain very high and healthy. But, you know, based on some of the dynamics we've been talking about, we would argue that in the back half of last year, the margin profile in many of those businesses was sort of unnaturally high, and so we would expect those to come back down, you know, closer to 50 percent.
Speaker Change: Some level.
Speaker Change: You can only optimize the margin percentage.
Speaker Change: To a certain level at the end of the day you need to grow revenue.
Speaker Change: And that's the key to expanding your DMD over the long run so even though even though margins might squeeze a little bit in the next few quarters our overall.
Speaker Change: Affecting our overall DMD to continue to increase and the more revenue you do over time the easier.
Speaker Change: And your overall PMT and Thats definitely the route we're taking.
Speaker Change: Right that makes sense. Thanks Scott.
Speaker Change: And thank you.
Ryan John Tomasello: and then any any color on just top line revenue growth by segment trend that you can give us?
Speaker Change: And one moment our next question.
Speaker Change: And our next question comes from John Campbell from Stephens, Inc. Your line is now open.
Trent Ziegler: Yeah, I mean, stopping short of guiding by segment, the insurance business, clearly, as we said, was driving most of that incremental increase, double-digit growth in Q1, which is the toughest comp that we face relative to last year. So, we'd expect that to accelerate, you know, pretty substantially as we continue throughout the year. You know, the other businesses I would say are there's not a ton of incremental revenue upside consumer, you know, a modest, modest contributor to that incremental increase on a full year basis.
John Robert Campbell: Hey, guys good morning.
John Robert Campbell: So this is I think the first time.
John Robert Campbell: First time in 10 quarters, we've talked about our revenue beat it has also been a long time since you raised the revenue guidance. So that is great. It seems like you guys are.
John Robert Campbell: Making some pretty measured turnarounds, but I wanted to click on the double click on the insurance business.
John Robert Campbell: It feels like the early stages of the potential Super cycle I think Scott you just mentioned that this time it does feel a little bit sturdier than past cycles, but as far as the recovery. Scott I think you also mentioned kind of broad largely broad based and not so much driven by one or two customers I think the last kind of pumps. We have was maybe one large customer, but if you could unpack.
John Robert Campbell: The results, maybe this quarter across click versus leads and then.
Douglas R. Lebda: And the only thing I'd add is for everybody just to keep remembering the core business flywheel, which is, you know, we get demand from clients, lenders, insurance companies, then we go fill that as efficiently as we can. And if demand exceeds supply, we go out and get more customers. It's one of the great things about our business model that we can flex up. That incremental spend comes at a lower margin, and we do market up to the last profitable dollar.
John Robert Campbell: I don't know if you want to go more broadly maybe carrier versus the agent channel.
John Robert Campbell: The one.
Speaker Change: Okay go ahead, but I was just going to say real quickly.
Speaker Change: The one thing that we're very focused on insurance.
John Robert Campbell: And everywhere, but definitely in insurance because we because.
John Robert Campbell: Because we believe we have a very leading position there.
John Robert Campbell: Gaining share versus competition I think we've done a really good job of that particular way Scott.
Scott Perry: Yeah, just starting at the channel level, which I think is even better than clicks versus lease versus cost just because different carriers by different things.
John Robert Campbell: The corporate the direct corporate.
John Robert Campbell: Carrier buyers.
Douglas R. Lebda: So, higher dollars of VMM and lower percentages of that margin are generally, for me, a sign of the health of the business because it shows that demand is higher than supply. And so I just wanted to make that point to tell people that we literally wake up every day and say, from a business standpoint, how much VMD can we generate?
John Robert Campbell: Have had huge growth and those are largely.
John Robert Campbell: A lot of the click bars, but to talk about being broad based our top seven.
John Robert Campbell: Corporate property and casualty buyers all grew over 100% year over year compared to Q1 last year. So.
John Robert Campbell: Your point of last year, maybe being one or two not maybe it was it was just a couple really that were driving the growth from.
Douglas R. Lebda: The great thing about this diversification we've put in place in the last few years is that at any given time, demand and supply of each of these marketplaces have their own dynamics. And I think we can say, like, overall, everything that Scott just said is absolutely right. Like, we're seeing net increased demand from clients. We're also, and I'll give a lot of credit to Scott and his team on this, have done a lot better at operational efficiencies and putting some stuff in that, you know, are short-term things that Scott just hit on. And so, therefore, we can we can lean in. And just
John Robert Campbell: From the corporate.
John Robert Campbell: Earlier standpoint, it's broad based across the board and they are all expanding we're expecting significant expansion from all of them in Q2 sequentially compared to Q1, we're going to do an all time revenue record it will probably be the first time, we ever do over $100 million.
John Robert Campbell: The insurance Division.
John Robert Campbell: On the local agents that was an all time record in Q1, it's more of a big shift slowly, but it was up over in double digit percentage wise.
Ryan John Tomasello: Just one last follow-up here to put a finer point on reinvesting some of the margin back into marketing, just trying to understand why we're not seeing VMD guide up here despite the significant revenue guide up. I mean, when should we expect these marketing efforts to start to translate into more VMM dollars? It sounds like, you know, you do expect the spend to be profitable. Just trying to understand the put and takes there.
John Robert Campbell: Our agency, where we write our business ourselves where carriers have opened up enough deals in product that as we look at our Kpis management models.
John Robert Campbell: It's telling us our staff should be three times the size.
John Robert Campbell: Today.
John Robert Campbell: Very profitably running our staff three times.
John Robert Campbell: We are diligently in the process of expanding our agency. So the carriers the right through independent agencies are also expanding dramatically. So it is really just.
Trent Ziegler: Well, I mean, I would say there's some aspect of it that is certainly conservatism and not wanting to and not wanting to, and wanting to give us enough flexibility so that we can, you know, do the best we can. And, you know, we always try to do better. But we're just, you know, beginning this over the last couple months, and we want to make sure that
John Robert Campbell: Clearly across the board.
John Robert Campbell: And as I said answered an earlier question.
John Robert Campbell: The expansion continues its not like all of these carriers are fully open at this point they are continuing to open up states each month.
Speaker Change: Great to hear I appreciate all that color and then on the home segment.
John Robert Campbell: I think a key driver of the beat at least relative to our model.
John Robert Campbell: But if I unpack it just relative to what we had I mean, I'm thinking mortgage was maybe down 80% or so year over year, just given the strength in HELOC is that is that right.
Scott Peyree: God, thanks for taking the time. Scott, it's just, it's important also to grow our revenue to have a higher market share, higher, you know, more significant relationships with our clients, you know, more options for our clients to have, which gives us more opportunities to optimize in the future. You know, at some level, you can. You can only optimize the margin percentage to a certain level. At the end of the day, you need to grow your revenue.
John Robert Campbell: Yes.
John Robert Campbell: Down 80%.
Speaker Change: But if I.
John Robert Campbell: Home equity was more steady.
John Robert Campbell: Mortgage was down.
John Robert Campbell: Pretty significantly year over year and in that.
John Robert Campbell: And I think as Doug said at the top of the meeting.
John Robert Campbell: Home equity is probably going to be a big.
John Robert Campbell: Big driver through the end of this year, but we have been I would say pleasantly surprised or points.
Scott Peyree: And that's the key to expanding your DMD over the long run. So even though margins might squeeze a little bit in the next few quarters, our overall DMD is expected to continue to increase. And the more revenue you do over time, you know, the easier it is to expand your overall DMD. And that's definitely the route we're taking. Right, that makes sense. Thanks, Scott.
John Robert Campbell: Revenue did grow pretty decently sequentially.
John Robert Campbell: From Q1 from Q4 overall and in mortgage and we are expecting it to grow decently from Q1 to Q2 as well and a lot of that has just been driven by I think.
John Robert Campbell: Consumers are just a little bit more accepting of the higher rates and so youre seeing increased shopping behavior for home equity product, mainly but honestly, we have seen a little bit.
Operator: and thank you. And one moment for our next question, and our next question comes from John Campbell from Stevens Inc. Your line is now open.
John Robert Campbell: At a very low level, but an uptick in purchase and refinance as well.
John Robert Campbell: This is, I think, the first time in 10 quarters that we talked about a revenue beat. It's also been a long time since you raised the revenue guidance, so that is great. It seems like you guys are making some pretty measured turnarounds. But I wanted to double-click on the insurance business.
John Robert Campbell: Great.
Speaker Change: Yes, the only thing I'd add on to the.
Speaker Change: Yeah go ahead, sorry got so one just highlight on mortgage.
Speaker Change: On that is mortgage and home equity are basically fungible. So.
John Robert Campbell: Looking at them separately doesn't necessarily.
Speaker Change: I don't think the best way to look at it.
John Robert Campbell: I mean, it feels like the early stages of a potential super cycle. I think, Scott, you just mentioned that. This time, it does feel a little bit sturdier than past cycles. As far as the recovery is concerned, Scott, I think you also mentioned it's largely broad-based and not so much driven by one or two customers. I think the last kind of pump fake we had was maybe one large customer. But if you could unpack the results, maybe this quarter, across clicks versus leads and then, I don't know, if you want to go more broadly, maybe carrier versus the agent channel.
John Robert Campbell: The mortgage companies will sell a home loan that has the consumer's best fit for them.
John Robert Campbell: So if it doesn't make sense to refinance and youre not purchasing a house than there are consumers, who can get benefit from a second mortgage loan.
John Robert Campbell: And they make a lot of sense for vehicles, certainly better than credit card debt et cetera.
John Robert Campbell: And home prices and home values are up so home equity in this market is a natural product that both consumers are seeking and lenders are doing but it's it's basically just.
John Robert Campbell: A substitution for when purchase comes back more aggressively and conversion rates are there there'll be an purchase which as Scott just said, we're starting to see and certainly when rates fall, even a little bit. These.
Douglas R. Lebda: Go ahead, I was just going to say real quickly the one thing that we're very focused on insurance, and everywhere, but definitely insurance, because we believe we have a very leading position there. It's gaining share versus competition. I think we've done a really good job of that. Take it away, Scott.
John Robert Campbell: These high rates for so long have really just made a.
John Robert Campbell: Treasure trove of future refinances in the homes segment.
Speaker Change: Makes a lot of sense. Thanks, guys.
Speaker Change: And thank you.
Scott Peyree: Yeah, you know, starting at the channel level, which I think is even better than clicks versus leads versus calls, just because, you know, different carriers buy different things. But, um, you know, the corporate, the direct corporate carrier buyers have had huge growth, and those are largely a lot of a lot of the click buyers.
Speaker Change: And one moment our next question.
Speaker Change: And our next question comes from Melissa Wedel from Jpmorgan. Your line is now open.
Melissa Wedel: Good morning, Thanks for taking my questions.
Melissa Wedel: And was hoping to follow up on a couple of the comments from earlier.
Melissa Wedel: The sequential strength into the second quarter.
Scott Peyree: But to talk about being broad-based, our top seven corporate property and casualty buyers all grew by over 100% year over year compared to Q1 last year. So, you know, to your point about last year maybe being one or two, not maybe; it was just a couple really that were driving the growth. From the corporate carrier standpoint, it's broad-based across the board, and they're all expanding. We're expecting significant growth from all of them in Q2 sequentially compared to Q1. We're going to set an all-time revenue record. It will probably be the first time we ever make over $100 million in the insurance division. On the local agents front, that was an all-time record in Q1.
Melissa Wedel: Based on piecing together comments across the different segments, certainly hearing the strength in insurance for military but also.
Melissa Wedel: It sounds like the increase.
Melissa Wedel: Sequential revenue growth.
Melissa Wedel: For both her and consumer.
Melissa Wedel: Within consumer this should we think about that is <unk> driven.
Melissa Wedel: Business and noticeably absent from your comments for any sort of current trends.
Melissa Wedel: You did note the references to bank of America Onboarding to treat bar in the shareholder letter I was hoping you could just elaborate on that a little bit and then maybe any seasonality.
Melissa Wedel: Sort of home equity.
Melissa Wedel: The trends that you've seen historically.
Speaker Change: And trend why don't you start that and then Scott add on.
Speaker Change: Yes, just as it relates to the sequential improvement Melissa obviously, a lot of that is driven by insurance for the reason Scott just detail I mean, we continue to see partners opening up budgets opening up geographies.
Speaker Change: Et cetera, which is encouraging.
Scott Perry: We do expect some sequential growth in home again, mostly driven by home equity, which is where the which is where the opportunity is right now and then.
Scott Peyree: It's more of a big shift that moved slowly, but it was up double-digit percentage-wise. In our agency, where we write our business ourselves, our carriers have opened up enough geos and products that as we look at our KPI agency management models, it's telling us our staff should be three times the size it is today. And we're very profitably running a staff three times the size of today. So, we're diligently in the process of expanding our agency.
Melissa Wedel: And then consumer.
Melissa Wedel: I would probably point to mostly personal loans and small business. There is a seasonal component to those business. There's a seasonal trend where we tend to expect things to pick up Q1 to Q2 and into Q3.
Melissa Wedel: The card business, while we're excited about some of the product work that's going on there, particularly around <unk>, we're not expecting a ton of growth in that business or certainly not baking it into our guidance for the rest of the year, but we're going to continue to chip away at the counter.
Scott Peyree: So, you know, the carriers, the write-through independent agencies are also expanding dramatically. So, it is really just the expansion continues. It's not like all of these carriers are fully open at this point. They're continuing to open up states each month.
Melissa Wedel: Kind of the blocking and tackling around rig wall and Onboarding New partners, there and we think that that's ultimately the future of that business for us.
Melissa Wedel: Scott you want to add to that.
Melissa Wedel: Yes.
Speaker Change: I might just come in.
Scott Perry: Honestly, a hybrid global warming.
Scott Perry: Do you believe we are seeing we are going to see sequential revenue improvement.
John Robert Campbell: Great to hear. I appreciate all that color. And on the home segment, you know, that ended up being, I think, a key driver of the beat, at least relative to our model. But if I unpack it just relative to what we had, I mean, I'm thinking the mortgage was maybe down 80% or so year over year, just given the strength and HELOC. Is that, is that right?
Scott Perry: And just.
Scott Perry: Almost every single <unk>.
Scott Perry: Major industry, we operate in with the exception of maybe credit card.
Speaker Change: So we are yes.
Scott Perry: Small business is drawing personal loans is growing.
Scott Perry: Deposit auto loans mortgage home equity I mean, we're seeing.
Scott Perry: Growth.
Scott Perry: Cross the board and.
Scott Perry: And there's a lot of work and it's hard work in this down lending environment, but we do believe it's we've done a lot of the proper thing to be able to.
Scott Peyree: I'm down 80 percent now. But, but it's, I mean, home equity was more steady, and the mortgage was down pretty significantly year over year. And, you know, and Doug said at the start of the meeting, you know, home equity is probably going to be, you know, you know, the big driver through the end of this year. But we have been, I would say, pleasantly surprised by your point.
Scott Perry: Take take some market share in the important media marketplaces.
Scott Perry: And drive more traffic and have the distribution within our clients to deliver that traffic.
Scott Perry: I'm feeling pretty good about pretty broad base.
Scott Perry: Revenue growth from.
Scott Perry: From Q1 to Q2.
Speaker Change: Thanks for that.
Speaker Change: Just ask is there typically anything we should think about in terms of seasonality or consumer behavior around home equity certainly understand there's a lot of HPA embedded.
Scott Peyree: Revenue did grow pretty decently sequentially, from Q1 to Q4 overall in mortgage, and we are expecting it to grow decently from Q1 to Q2 as well. And a lot of that's just been driven by, I think, consumers are just a little bit more accepting of the high rates. And so you're seeing increased shopping behavior for home equity products mainly, but honestly, we've seen a little bit at a very low level, but an uptick in purchase and refinance as well.
Scott Perry: And housing prices right now, but do you typically see.
Scott Perry: An increase in.
Scott Perry: Demand for that type of product in the spring and summer months.
Scott Perry: We don't normally.
Scott Perry: We see a lot of season seasonality.
Scott Perry: In home equity I would say thats.
Scott Perry: More like one of our normal products.
Scott Perry: Q4 would be more seasonally light and the rest of them would.
Scott Perry: The seasonally normal.
Scott Perry: Theres not a lot of seasonality in that product, that's really just based on consumer need.
Douglas R. Lebda: The only thing I'd add to the...
Douglas R. Lebda: So one just highlight on mortgage on that is mortgage and home equity are basically fungible. So it's you looking at them separately doesn't necessarily is not, I don't think, the best way to look at it.
Speaker Change: Got it.
Scott Perry: Yes.
Scott Perry: You, probably see more seasonality in personal loans, you would see some in home equity, but I think a lot of more of the growth in home equity is just more of the fact that.
Scott Perry: Buying and purchasing homes that has come to a a crashing halt so just a lot of consumers are turning more to home equity <unk>.
Douglas R. Lebda: Mortgage companies will sell a home loan that is the consumer's best fit for them. And so if it doesn't make sense to refinance and you're not purchasing a house, then there are consumers who can benefit from a second mortgage loan. And they make a lot of sense for people, certainly better than credit card debt, et cetera. And home prices and home values are up. So home equity in this market is a natural product that both consumers are seeking and lenders are doing, a substitution for when purchase comes back more aggressively and conversion rates are there, they'll be in purchase, which Scott just said we're starting to see. And certainly, when rates fall even a little bit, these high rates for so long have really just made a treasure trove of future refinancers in the homesec.
Scott Perry: Remodeling or whatever versus selling.
Scott Perry: So we're seeing growth.
Scott Perry: Growth there because of that.
Speaker Change: Got it thanks, so much.
Speaker Change: Thank you.
Scott Perry: At one moment.
Speaker Change: And one moment our next question.
Speaker Change: And our next question comes from Mike Grondahl from Northland Securities. Your line is now open.
Michael John Grondahl: Hey, Thanks, guys.
Michael John Grondahl: Two questions one could you kind of talk about the significance of treat treat getting into bofa on the credit card side kind of what's your.
Douglas R. Lebda: Goal for that.
Michael John Grondahl: And then secondly did you guys disclose home equity revenues or credit card revenues in the first quarter.
Speaker Change: I'll take part of the first one what Scott.
Speaker Change: Add in on that.
Scott Perry: Getting bofa edge recall is fantastic from the standpoint that we've landed a significant card issuer and gone through the integration and.
John Robert Campbell: Makes a lot of sense. Thanks, guys.
Operator: And one moment for our next question. And our next question...
Michael John Grondahl: And that will lead to a better consumer experience and from a financial standpoint.
Operator: Good morning. Thanks for taking my questions today.
Operator: We get to the point, where you can get multiple offers to all consumers you probably need.
Operator: I was hoping to follow up on a couple of the comments from earlier about sequential strength into the second quarter, just based on piecing together comments across the different segments. Certainly, hearing the strength in insurance coming through also sounds like increased sequential revenue growth in Q2 for both home and consumer. Within consumer, should we think about that as being driven by small business and noticeably absent from your comments for any sort of card trends, although we did note the reference to Bank of America onboarding to TreeQol in the shareholder letter? I was hoping you could just elaborate on that a little bit and then maybe speak to any seasonality in sort of home equity trends that you've seen historically. Thanks.
Operator: One of.
Michael John Grondahl: Those types of issuers of different sizes. So we.
Operator: We've got a lot of interest we got a good pipeline, we have people live the product works consumers like it clients like it.
Michael John Grondahl: But it's got to get to enough scale that we would be able to sell.
Michael John Grondahl: <unk> replace.
Michael John Grondahl: Crazy click walls of the credit card business.
Speaker Change: Yeah, and then Mike on your second question.
Operator: We did disclose revenue for home equity was in the press release $20 8 million in the quarter, we did not disclose credit card revenue and our.
Operator: Or kind of guidepost as we disclose anything that is 10% or more of total revenue.
Speaker Change: Got it thanks guys.
Speaker Change: And thank you.
Trent Ziegler: And Trent, why don't you start that, and then Scott can add on?
Operator: And if you would like to ask a question that is star one again, if you'd like to ask a question that is.
Trent Ziegler: Yeah, just as it relates to the sequential improvement, Melissa, obviously, you know, a lot of that is driven by insurance for the reasons Scott just detailed. I mean, we continue to see partners opening up budgets, opening up geographies, etc., which is encouraging. You know, we do expect some sequential growth in home prices, again, mostly driven by home equity, which is where the opportunity is right now. And then consumers, I would probably point to mostly personal loans and small business.
Trent Ziegler: Star 111 moment, our next question.
Trent Ziegler: And our next question comes from Matt <unk> from Susquehanna International Group. Your line is now open.
Speaker Change: Hi, Thanks for taking my question can you just walk through the math for the 2025 convertible notes because it looks like there is still a significant gap between cash on the balance sheet. Once you take out about $50 million in cash as being necessary to keep on the balance sheet and the remaining balances.
Trent Ziegler: <unk> hundred $84 million of July 2025 convertible notes.
Trent Ziegler: Okay.
Trent Ziegler: $175 million of new money.
Speaker Change: There is.
Trent Ziegler: More like 60 to 70 million of excess cash flow and the balance sheet that we feel like we could that we could put to work.
Scott Peyree: There's, you know, a seasonal component to those businesses, a seasonal trend where we tend to expect things to pick up in Q1 to Q2 and then to Q3. For example, the card business, while we're excited about some of the product work that's going on there, particularly around TreeQual, we're not expecting a ton of growth in that business, or certainly not making it into our guidance for the rest of the year.
Trent Ziegler: Yes, and then we think we can free cash flow the remaining balance.
Scott Peyree: Of course of the next 15 months.
Speaker Change: And thank you.
Scott Peyree: And I am showing no further questions I would now like to turn the call back over to Doug Lebda CEO for closing remarks.
Speaker Change: Alright, Thank you and thank you all for being here look over the last several years.
Scott Peyree: They have not been easy for us and certainly not easy for you as shareholders.
Scott Peyree: The business faced.
Scott Peyree: But we're going to continue to chip away at the, you know, kind of the blocking and tackling around TreeQual and onboarding new partners there. And we think that's, ultimately, the future of that business for us. Scott, do you want to add to that?
Scott Peyree: <unk> and demand pulling back from clients, which then forced us to have to obviously right size the business.
Scott Peyree: And we had a looming debt repayment.
Scott Peyree: However from that.
Scott Peyree: Chaotic couple of years actually came some risks came in very very good things.
Scott Peyree: Yeah, I mean, I mean, I might just come in and honestly, hype it up a little bit more. You're like, I do believe we are seeing, we're going to see sequential revenue improvement, and just in almost every single, https://www.lendingtreeinc.com lender, across the board. And it's a lot of work, and it's hard work in this down lending environment, but we do believe we've done a lot of the proper things to be able to take some market share in the important media marketplaces, you know, and drive more traffic and have the distribution with our clients to deliver that traffic. So I'm feeling pretty good about the pretty broad base revenue growth from Q1 to Q2.
Scott Peyree: Today in operations operational improvement with Scott and his team are gripping.
Scott Peyree: And our operators are working.
Scott Peyree: Much more closely with with finance and other areas of the company and really approaching things together on product and tech.
Scott Peyree: We are now able to work on discrete.
Scott Peyree: Key projects that we hope will have positive financial returns, we've got a new <unk>.
Scott Peyree: <unk> process in a number of new people, there and I am excited to be shown you. Some results from that in the future and I think thats shown with <unk>, our clients are optimistic and strong.
Scott Peyree: Financially and I think that bodes well for.
Scott Peyree: For the future.
Scott Peyree: Our company and all of our employees are fired up to be taking the hill to win and I want to thank you all want to thank you for your Stick-to-it-ive nest with lending tree and I look forward to showing you guys. Some continued growth.
Scott Peyree: Thanks for that. I just asked you, is there typically anything we should think about in terms of seasonality or consumer behavior around home equity? Certainly understand there's a lot of HPA embedded in housing prices right now, but do you typically see an increase in Demand for that type of product in the spring and summer months? Thanks.
Scott Peyree: And continued growth and profitability.
Scott Peyree: This company plays to win in the future. Thank you.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Scott Peyree: Yeah.
Scott Peyree: Okay.
Scott Peyree: We don't normally see a lot of seasonality, and in home equity, I'd say that, more like one of our normal products, that Q4 would be more seasonally light, and the rest of them would be seasonally normal. There's not a lot of seasonality in that product. It's really just based on consumer need.
Scott Peyree: [music].
Scott Peyree: Okay.
Scott Peyree: Okay.
Scott Peyree: [music].
Scott Peyree: Okay.
Scott Peyree: Okay.
Scott Peyree: Thank you. You can probably see more seasonality in personal loans. You would see some growth in home equity, but I think a lot of the growth in home equity is just more of the fact that... Buying and purchasing homes has come to a crashing halt, so just a lot of consumers are turning more to home equity, you know, remodeling or whatever versus buying and selling. So we're seeing growth there because of that. I got it.
Scott Peyree: Okay.
Scott Peyree: [music].
Scott Peyree: Yes.
Scott Peyree: [music].
Scott Peyree: Yes.
Scott Peyree: Okay.
Scott Peyree: [music].
Scott Peyree: Okay.
Scott Peyree: [music].
Scott Peyree: Okay.
Scott Peyree: Okay.
Scott Peyree: Yes.
Scott Peyree: [music].
Operator: Got it. Thanks so much. (inaudible)
Operator: One moment for our next question, and our next question comes from Mike Grondahl from Northland Securities. Your line is now open.
Michael John Grondahl: Hey, thanks guys. Two questions. One, can you kind of talk about the significance of TreeQual getting into B of A on the credit card side? Goal for that. And then, secondly, did you guys disclose home equity revenues or credit card revenues in the first quarter? Thanks.
Douglas R. Lebda: I'll take part of the first one, and let Scott add in on that. Getting B of A on TreeQol is fantastic from the standpoint that we've landed a significant card issuer and gotten through the integration, and that will lead to a better consumer experience. And from a financial standpoint, to get to the point where you can give multiple offers to all consumers, you probably need one T of those types of issuers of different sizes.
Douglas R. Lebda: So we've got a lot of interest. We've got a good pipeline. We have people in place, the product works, consumers like it, clients like it. But it's got to get to enough scale that we would be able to supplement and or replace the crazy click walls of the credit card business.
Trent Ziegler: Mike, on your second question, we did disclose revenue for home equity. It was in the press release, $20.8 million in the quarter. We did not disclose credit card revenue. Our kind of guidepost is we disclose anything that is 10% or more of total revenue.
Michael John Grondahl: Got it. Thanks, guys.
Operator: And thank you. And if you would like to ask a question, that is star 11. Again, if you'd like to ask a question, that is... Star 11. One moment for our next question. And our next question comes from Madeline Dow from Susquehanna International Group. Your line is now open.
Madeline Dow: Hi, thanks for taking my question. Can we just walk through the math for the 2025 convertible notes? Because it looks like there's still a significant gap between cash on the balance sheet once you take out about $50 million in cash that is being necessary to keep on the balance sheet and the remaining balance of $284 million of the July 2025 convertible notes. Thanks. Yeah.
Trent Ziegler: Yeah, I mean, 175 million of new money. There's more like 60 to 70 million of excess cash flow on the balance sheet that we feel like we could put to work. Yeah, and then we, and then we think we can pre-cash flow the remaining balance over the course of the next 15 months.
Operator: And, thank you. And I am showing no further questions. I would now like to turn the call back over to Doug Lebda, CEO, for closing remarks.
Douglas R. Lebda: Thank you and thank y'all for being here. Look, over the last several years, it has not been easy for us, and certainly not easy for you as shareholders. The business faced RPLs and demand pulling back from clients, which then forced us to have to obviously right-size the business, and we had a looming debt repayment. However, from that chaotic couple of years, actually, came some very, very good things.
Douglas R. Lebda: Today in operations, operational improvement with Scott and his team is gripping, and our operators are working much more closely with finance and other areas of the company and really approaching things together. On product and tech, we are now able to work on discrete key projects that we hope will have positive financial returns. We've got a new product process and a number of new people there, and I'm excited to be showing you some results from that in the future, and I think that will be shown with TreeQol.
Douglas R. Lebda: Our clients are optimistic and strong financially, and I think that bodes well for the future. Our company and all of our employees are fired up to be taking the hill to win, and I want to thank you all. I want to thank you for your stick-to-itiveness with LendingTree, and I look forward to showing you guys some continued growth and continued growth and profitability as this company plays to win in the future. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Douglas R. Lebda: [music].
Operator: [inaudible]
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Operator: [music].