- LendingTree Inc TREE Stocks plunge Tuesday morning after mixed Q1 results. The company, which does its business with Ovation Credit Services, also reduced its fiscal 23 outlook.
- TREE reported revenue of $200.5 million for the first quarter of 2023, down 29% year over year and missing the consensus of $207.0 million.
- Home segment sales were down 57% Y/Y to $43.7 million and consumer segment sales were down 21% Y/Y to $79.7 million in the first quarter Y/Y. Insurance segment revenue also declined 4% year over year to $77.1 million in the quarter.
- Around 25.8 million consumers have signed up for MyLendingTree as of March 31, 2023.
- Variable marketing margin declined 19% year over year to $76.1 million in the first quarter. Adjusted EBITDA for the quarter fell 51% year over year to $14.5 million.
- Adjusted earnings per share fell 46% year over year to $0.25 but beat the consensus of $(0.10).
- In April, following the quarter-end, the Company made the decision to close its Ovation credit services business, taking into account the financial impact in the guidance.
- The company said its Ovation Credit Services business is facing challenges due to COVID as the industry has faced increased regulatory pressures of late.
- 2023 Outlook cut: The company now expects revenue of $760 million to $800 million (vs. $935 million to $985 million previously and consensus of $945.6 million), variable marketing margin of $290 million to $310 million (vs the prior range of $325 to $350 million) and Adjusted EBITDA of $80 to $90 million (up from $85 to $95 million previously).
- Outlook Q2 2023: TREE expects revenue of $190 million to $200 million (vs consensus of $244.27 million), variable marketing margin of $75 million to $80 million and Adjusted EBITDA of $17 million to $22 million Dollar.
- “During the first quarter, we completed a strategic cost reduction that impacted 13% of our workforce. The plan targeted parts of our business that are more capital intensive, as well as areas where revenue prospects have become less certain given the challenging economic environment,” said Doug Lebda, chairman and CEO.
- price action: TREE shares trade 28.3% lower at $16.74 on latest check Tuesday.
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