LendingTree sees 14% adjusted EBITDA growth at midpoint of 2026 guidance as it plans Q4 stock buybacks

• “We’re very excited to provide strong financial results in Q3 that handily beat guidance we put out as well as our updated guidance for the full year assumes adjusted EBITDA growth by 14% at the midpoint despite ongoing headwinds in the mortgage business.” (CEO, President & Director Scott Peyree)

• “The new bidding platform with our largest client that we were integrating with at the end of Q2 and beginning of Q3 went very well and rolled out faster than we fully expected to and provide a benefit to our business there throughout the quarter.” (CEO Peyree)

• “Q2 was a trough in the performance of the small business lending, and we did see strong sequential growth.” (CEO Peyree) “September and October were our 2 best SMB concierge sales month since January of this year.” (CEO Peyree)

• “Even in those headwinds, we provided strong year-over-year growth in both revenue and VMD.” (CEO Peyree) “Home equity has become and HELOC has become a major part of that business, and that business is much less interest rate sensitive.” (CEO Peyree)

• “All of the LLMs added up together are 5% of the search bucket.” (CEO Peyree) “We don’t expect any sort of massive growth in traffic from the LLMs anytime in the near or midterm, nor do we expect any major loss of traffic we’re getting from other sources to the LLMs anytime in the near future.” (CEO Peyree)

• “When you look at our cash flow, look at our Q3 LTM cash flow, free cash flow, excluding litigation, it’s $100 million.” (CFO & Treasurer Jason Bengel) “This quarter, we paid down $60 million of debt.” (CFO Bengel) “We saved $5 million in interest expense, bringing our gross debt down to $336 million.” (CFO Bengel)

• “You’ll see in our financials, we did take a noncash goodwill impairment of $99 million in Home and Consumer.” (CFO Bengel) “In Q4, we’re going to be buying back stock, and we’re going to continue paying down debt.” (CFO Bengel)

Outlook

• “Our updated guidance for the full year assumes adjusted EBITDA growth by 14% at the midpoint despite ongoing headwinds in the mortgage business.” (CEO Peyree)

• “Within 2026, expenses [are] growing around 3% at the midpoint.” (CFO Bengel) “We expect all that to continue into 2027.” (CFO Bengel)

• “We’re still a little early in our planning for 2027. So we’re not putting out guidance or numbers really at this point.” (CFO Bengel) “Insurance, we expect continued tailwinds for a while.” (CFO Bengel) “Home equity [is] really driven by Home equity.” (CFO Bengel) “Consumer, it’s really about SMB… it’s been improving… but it’s hard to really guarantee that.” (CFO Bengel)

• “The guide isn’t assuming the sort of budgets that we’ve gotten in prior years… We’re just being conservative there.” (CFO Bengel)

Financial Results

• The prepared remarks did not disclose quarterly EPS or revenue figures, so comparisons to the provided analyst EPS and revenue estimates were not available from the transcript.

• “This quarter, we paid down $60 million of debt… bringing our gross debt down to $336 million, pretty -- approaching pretty close to our $200 million longer-term goal.” (CFO Bengel)

• “We did take a noncash goodwill impairment of $99 million in Home and Consumer… [that] resulted in the charge.” (CFO Bengel) “This doesn’t reflect a change in our expectations for these segments.” (CFO Bengel)

• “Look at the midpoint of our guide versus 2023, you’re looking at a 25% EBITDA CAGR… expenses with a 3% CAGR… net leverage moving from 5.3 to 1.7.” (CFO Bengel)

• “Our Q3 LTM cash flow, free cash flow, excluding litigation, it’s $100 million.” (CFO Bengel)

Q&A

• Jed Kelly, Oppenheimer & Co. Inc., Research Division: “Are you seeing like the same thing? And do you just have like a good multiyear visibility into insurance over the next couple of years?” CEO Peyree: “I would generally agree with that sentiment… I would say to ’28 and beyond… there’s a lot of continued growth.”

• Jed Kelly, Oppenheimer & Co. Inc., Research Division: “Do you think you can continue growing expenses at 3%, 4%? Or do you think you’re going to have to invest more…?” CFO Bengel: “It is possible that as we move into 2027, we do wind up investing more in AI, but we would expect an outsized increase in productivity moving forward.” CEO Peyree: “It’s a little bit of both.”

• Youssef Squali, Truist Securities, Inc., Research Division: “Are you actually talking to some of these platforms?” CEO Peyree: “Yes, we’re actively engaged in some platforms more so than others.”

• Youssef Squali, Truist Securities, Inc., Research Division: “As we look at 2027, can you maybe just kind of share your initial outlook…?” CFO Bengel: “It’s a little bit early to be putting out numbers… [Home] is going to be home equity driven… Consumer… it’s really about SMB.” CEO Peyree: “Small business, if it continues to recover… that would be major growth.”

• Ryan Tomasello, Keefe, Bruyette, & Woods, Inc., Research Division: “Are you… telegraphing… incremental investment next year? And… sustain double-digit EBITDA growth…?” CEO Peyree: “We feel that there’s a lot of growth just in areas where we’ve arguably been under-indexed… social media… business development, publishers.”

• Ryan Tomasello, Keefe, Bruyette, & Woods, Inc., Research Division: “Any way to quantify how far below you are on those take rates and average loan sizes?” CFO Bengel: “If SMB was performing at the original budget, we would be north of $160 million EBITDA this year.”

• Daniel Pfeiffer, JPMorgan Chase & Co, Research Division: “What their mindset is as it relates to partnering versus blocking AI agents…?” CEO Peyree: “They don’t want their rate tables publicly available… Now where they work with us… they’re like, okay, you’re logged in… we’re more than happy to show rates.”

• Daniel Pfeiffer, JPMorgan Chase & Co, Research Division: “If you could share any stats on the member base today…?” CEO Peyree: “No, we’re not currently providing any stats on those front publicly.”

• Mike Grondahl, Northland Capital Markets, Research Division: “A question on your 4Q guidance… reflects seasonality…?” CFO Bengel: “The real uncertainty is with insurance… the guide isn’t assuming the sort of budgets that we’ve gotten in prior years… We’re just being conservative there.” CEO Peyree: “If you look year-over-year, the biggest driver probably is small business.”

• Mike Grondahl, Northland Capital Markets, Research Division: “Help us think about your kind of appetite for buyback…?” CFO Bengel: “Our debt… target debt level is $200 million… When you look at where our stock is… compared to our free cash flow, it’s just pretty obvious that it is an attractive opportunity that we’re going to take advantage of.”

Sentiment Analysis

• Analyst tone was mostly neutral-to-slightly positive, with forward-looking probing on insurance-cycle duration (“into ’28, ’29”), AI/platform risk and integration, the durability of EBITDA growth amid organic-traffic investment, and conservatism embedded in Q4 guidance.

• Management tone was positive in prepared remarks and generally steady in Q&A, emphasizing durability and execution while using firm language around AI/search disruption (“we don’t expect any… major loss of traffic”) and capital returns (“In Q4, we’re going to be buying back stock”).

• Versus last quarter’s heavier focus on SMB softness and “the miss,” the current call carried more confidence on sequential SMB recovery (“strong sequential growth”) and shifted more airtime to AI agents/LLMs and explicit shareholder returns (Q4 buybacks), while still flagging mortgage headwinds and insurance-budget uncertainty.

Quarter-over-quarter comparison

• Q2 emphasized reported growth metrics (“Revenue was up 25% year-over-year, and our adjusted EBITDA was up 11% year-over-year.”) (CEO Peyree), while Q3 emphasized beating guidance and reaffirmed full-year framing (“adjusted EBITDA growth by 14% at the midpoint”). (CEO Peyree)

• Q2 positioned SMB weakness as macro-driven and emerging from a miss (“demand came in softer than we forecast, which drove the miss.”) (CEO Peyree); Q3 framed Q2 as “a trough” and highlighted sequential improvement (“September and October were our 2 best SMB concierge sales month since January”). (CEO Peyree)

• Q2 highlighted flexibility for “buybacks and accretive M&A” (CEO Peyree); Q3 moved to a near-term commitment (“In Q4, we’re going to be buying back stock”). (CFO Bengel)

• Q3 newly introduced a disclosed goodwill impairment figure (“a noncash goodwill impairment of $99 million”) and quantified debt paydown and interest savings; Q2 did not mention those specific items.

Risks and Concerns

• “Long-term interest rates… have definitely gone in the wrong direction this year, which has provided some headwinds.” (CEO Peyree) “Mortgage is hard right now.” (CFO Bengel)

• “The real uncertainty is with insurance… the guide isn’t assuming the sort of budgets that we’ve gotten in prior years.” (CFO Bengel)

• “The merchant sentiment has recovered, but not fully… the take rates on loans are lighter… and then the average size of loan is a little lighter.” (CEO Peyree) Mitigation was tied to historical normalization: “We have a long-term history of like what the take rate on loans generally is… no reason to believe we won’t be right back there.” (CEO Peyree)

• On AI/search disintermediation, management framed the near-term risk as limited: “All of the LLMs added up together are 5% of the search bucket.” (CEO Peyree)

Final Takeaway

Management described Q3 as a guidance beat while keeping its full-year framework centered on “adjusted EBITDA growth by 14% at the midpoint,” alongside disciplined expense growth expectations and continued deleveraging. Executives highlighted insurance strength, sequential SMB improvement from a Q2 “trough,” and a Home strategy increasingly oriented toward home equity/HELOCs amid a difficult mortgage backdrop. The call also elevated capital allocation as a near-term stock factor, with the CFO stating, “In Q4, we’re going to be buying back stock,” while also disclosing a “noncash goodwill impairment of $99 million” and reiterating a longer-term $200 million gross-debt target.

Read the full Earnings Call Transcript

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