10-Q 1 tree-20220930.htm 10-Q tree-20220930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2022
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                 
Commission File No. 001-34063 
 
tree-20220930_g1.jpg
LendingTree, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
26-2414818
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
 1415 Vantage Park Dr., Suite 700, Charlotte, North Carolina 28203
(Address of principal executive offices)(Zip Code)
(704541-5351
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No   
As of October 31, 2022, there were 12,785,635 shares of the registrant's common stock, par value $.01 per share, outstanding, excluding treasury shares.




TABLE OF CONTENTS


2


PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements 

LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited) 
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
 (in thousands, except per share amounts)
Revenue$237,836 $297,450 $782,937 $840,214 
Costs and expenses:    
Cost of revenue (exclusive of depreciation and amortization shown separately below)
14,105 15,020 44,240 42,849 
Selling and marketing expense176,875 206,475 565,569 589,143 
General and administrative expense39,540 40,126 115,802 114,926 
Product development14,043 13,384 42,413 39,142 
Depreciation5,274 4,808 15,024 12,969 
Amortization of intangibles6,582 10,345 21,574 32,967 
Change in fair value of contingent consideration (196) (8,249)
Restructuring and severance 47 3,760 47 
Litigation settlements and contingencies(7)22 (41)360 
Total costs and expenses256,412 290,031 808,341 824,154 
Operating (loss) income(18,576)7,419 (25,404)16,060 
Other (expense) income, net:    
Interest expense, net(5,720)(11,826)(19,990)(31,881)
Other income1,523  1,806 40,072 
(Loss) income before income taxes(22,773)(4,407)(43,588)24,251 
Income tax (expense) benefit(135,910)1 (133,956)455 
Net (loss) income from continuing operations(158,683)(4,406)(177,544)24,706 
Loss from discontinued operations, net of tax(1)(54)(4)(3,516)
Net (loss) income and comprehensive (loss) income$(158,684)$(4,460)$(177,548)$21,190 
Weighted average shares outstanding:
Basic12,758 13,268 12,794 13,194 
Diluted12,758 13,268 12,794 13,797 
(Loss) income per share from continuing operations:  
Basic$(12.44)$(0.33)$(13.88)$1.87 
Diluted$(12.44)$(0.33)$(13.88)$1.79 
Loss per share from discontinued operations:  
Basic$ $ $ $(0.27)
Diluted$ $ $ $(0.25)
Net (loss) income per share:  
Basic$(12.44)$(0.34)$(13.88)$1.61 
Diluted$(12.44)$(0.34)$(13.88)$1.54 
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
3

LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 (Unaudited) 
 September 30,
2022
December 31,
2021
 (in thousands, except par value and share amounts)
ASSETS:  
Cash and cash equivalents$285,538 $251,231 
Restricted cash and cash equivalents127 111 
Accounts receivable (net of allowance of $2,356 and $1,456, respectively)
96,330 97,658 
Prepaid and other current assets28,466 25,379 
Total current assets410,461 374,379 
Property and equipment (net of accumulated depreciation of $33,211 and $28,315, respectively)
64,848 72,477 
Operating lease right-of-use assets69,770 77,346 
Goodwill420,139 420,139 
Intangible assets, net64,189 85,763 
Deferred income tax assets 87,581 
Equity investments174,580 158,140 
Other non-current assets6,308 6,942 
Non-current assets of discontinued operations 16,589 
Total assets$1,210,295 $1,299,356 
LIABILITIES:  
Current portion of long-term debt$2,484 $166,008 
Accounts payable, trade4,583 1,692 
Accrued expenses and other current liabilities84,464 106,731 
Current liabilities of discontinued operations 1 
Total current liabilities91,531 274,432 
Long-term debt813,395 478,151 
Operating lease liabilities90,532 96,165 
Deferred income tax liabilities8,059 2,265 
Other non-current liabilities281 351 
Total liabilities1,003,798 851,364 
Commitments and contingencies (Note 13)
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; 16,140,103 and 16,070,720 shares issued, respectively, and 12,784,637 and 13,095,149 shares outstanding, respectively
161 161 
Additional paid-in capital1,177,409 1,242,794 
Accumulated deficit(704,895)(571,794)
Treasury stock; 3,355,466 and 2,975,571 shares, respectively
(266,178)(223,169)
Total shareholders' equity206,497 447,992 
Total liabilities and shareholders' equity$1,210,295 $1,299,356 
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
4

LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Nine Months Ended September 30, 2022
 (Unaudited)
 
  Common Stock Treasury Stock
 TotalNumber
of Shares
AmountAdditional
Paid-in
Capital
Accumulated
Deficit
Number
of Shares
Amount
 (in thousands)
Balance as of December 31, 2021$447,992 16,071 $161 $1,242,794 $(571,794)2,976 $(223,169)
Net loss and comprehensive loss(10,826)— — — (10,826)— — 
Non-cash compensation15,080 — — 15,080 — — — 
Purchase of treasury stock(43,009)— — — — 379 (43,009)
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(3,086)49 — (3,086)— — — 
Cumulative effect adjustment due to ASU 2020-06(65,303)— — (109,750)44,447 — — 
Balance as of March 31, 2022$340,848 16,120$161 $1,145,038 $(538,173)3,355$(266,178)
Net loss and comprehensive loss(8,038)— — — (8,038)— — 
Non-cash compensation17,335 — — 17,335 — — — 
Issuance of common stock for stock options, employee stock purchase plan, restricted stock awards and restricted stock units, net of withholding taxes341 21 — 341 — — — 
Balance as of June 30, 2022$350,486 16,141 $161 $1,162,714 $(546,211)3,355 $(266,178)
Net loss and comprehensive loss(158,684)— — — (158,684)— — 
Non-cash compensation15,575 — — 15,575 — — — 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes and cancellations(880)(1)— (880)— — — 
Balance as of September 30, 2022$206,497 16,140 $161 $1,177,409 $(704,895)3,355 $(266,178)















LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Nine Months Ended September 30, 2021
 (Unaudited)
5


  Common Stock Treasury Stock
 TotalNumber
of Shares
AmountAdditional
Paid-in
Capital
Accumulated
Deficit
Number
of Shares
Amount
 (in thousands)
Balance as of December 31, 2020$364,761 15,766 $158 $1,188,673 $(640,909)2,641 $(183,161)
Net income and comprehensive income19,049 — — — 19,049 — — 
Non-cash compensation16,436 — — 16,436 — — — 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(4,801)31 (4,801)— — — 
Other(2)— — (2)— — — 
Balance as of March 31, 2021$395,443 15,797$158 $1,200,306 $(621,860)2,641$(183,161)
Net income and comprehensive income6,601 — — — 6,601 — — 
Non-cash compensation18,294 — — 18,294 — — — 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes30 159 2 28 — — — 
Balance as of June 30, 2021$420,368 15,956 $160 $1,218,628 $(615,259)2,641 $(183,161)
Net loss and comprehensive loss(4,460)— — — (4,460)— — 
Non-cash compensation17,074 — — 17,074 — — — 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(1,894)13 — (1,894)— — — 
Other(6)— — (6)— — — 
Balance as of September 30, 2021$431,082 15,969 $160 $1,233,802 $(619,719)2,641 $(183,161)
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
6

LENDINGTREE, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Nine Months Ended
September 30,
 20222021
 (in thousands)
Cash flows from operating activities attributable to continuing operations:  
Net (loss) income and comprehensive (loss) income$(177,548)$21,190 
Less: Loss from discontinued operations, net of tax4 3,516 
Net (loss) income from continuing operations(177,544)24,706 
Adjustments to reconcile net (loss) income from continuing operations to net cash provided by operating activities attributable to continuing operations:
Loss on impairments and disposal of assets4,261 2,651 
Amortization of intangibles21,574 32,967 
Depreciation15,024 12,969 
Non-cash compensation expense47,990 51,804 
Deferred income taxes133,943 (455)
Change in fair value of contingent consideration (8,249)
Gain on investments (40,072)
Bad debt expense2,708 1,823 
Amortization of debt issuance costs5,443 3,756 
Write-off of previously-capitalized debt issuance costs 1,066 
Amortization of debt discount1,475 22,297 
Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities(890)13,015 
Changes in current assets and liabilities:
Accounts receivable(1,380)(43,688)
Prepaid and other current assets(6,271)(2,762)
Accounts payable, accrued expenses and other current liabilities(19,146)7,537 
Income taxes receivable(389)10,322 
Other, net(469)(794)
Net cash provided by operating activities attributable to continuing operations26,329 88,893 
Cash flows from investing activities attributable to continuing operations:
Capital expenditures(8,970)(30,515)
Equity investments(16,440)(1,180)
Net cash used in investing activities attributable to continuing operations(25,410)(31,695)
Cash flows from financing activities attributable to continuing operations:
Proceeds from term loan250,000  
Repayment of term loan(625) 
Repayment of 0.625% Convertible Senior Notes
(169,659) 
Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of stock options(3,292)(6,666)
Purchase of treasury stock(43,009) 
Payment of debt issuance costs(4)(5,995)
Payment of original issue discount on undrawn term loan (2,500)
Other financing activities (31)
Net cash provided by (used in) financing activities attributable to continuing operations33,411 (15,192)
Total cash provided by continuing operations34,330 42,006 
Discontinued operations:
Net cash (used in) provided by operating activities attributable to discontinued operations(7)3,330 
Total cash (used in) provided by discontinued operations(7)3,330 
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents34,323 45,336 
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period251,342 170,049 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$285,665 $215,385 
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
7


LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



NOTE 1—ORGANIZATION
Company Overview
LendingTree, Inc. is the parent of LT Intermediate Company, LLC, which holds all of the outstanding ownership interests of LendingTree, LLC, and LendingTree, LLC owns several companies (collectively, “LendingTree” or the “Company”).

LendingTree operates what it believes to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. The Company offers consumers tools and resources, including free credit scores, that facilitate comparison-shopping for mortgage loans, home equity loans and lines of credit, reverse mortgage loans, auto loans, credit cards, deposit accounts, personal loans, student loans, small business loans, insurance quotes, sales of insurance policies and other related offerings. The Company primarily seeks to match in-market consumers with multiple providers on its marketplace who can provide them with competing quotes for loans, deposit products, insurance or other related offerings they are seeking. The Company also serves as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries it generates with these providers.

The consolidated financial statements include the accounts of LendingTree and all its wholly-owned entities, except Home Loan Center, Inc. (“HLC”) subsequent to its bankruptcy filing on July 21, 2019, which resulted in the Company's loss of a controlling interest in HLC under applicable accounting standards. Intercompany transactions and accounts have been eliminated. The HLC Bankruptcy case was closed on July 14, 2021. The HLC entity was legally dissolved in the first quarter of 2022. See Note 16—Discontinued Operations for additional information.
Discontinued Operations
The LendingTree Loans business, which consisted of originating various consumer mortgage loans through HLC (the “LendingTree Loans Business”), is presented as discontinued operations in the accompanying consolidated balance sheets, consolidated statements of operations and comprehensive income and consolidated statements of cash flows for all periods presented. The notes accompanying these consolidated financial statements reflect the Company's continuing operations and, unless otherwise noted, exclude information related to the discontinued operations. See Note 16Discontinued Operations for additional information.
Basis of Presentation
The accompanying unaudited interim consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company's financial position for the periods presented. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or any other period. The accompanying consolidated balance sheet as of December 31, 2021 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”). The accompanying consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in the 2021 Annual Report. 
NOTE 2—SIGNIFICANT ACCOUNTING POLICIES
Accounting Estimates
Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and
8


LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. 
Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include: the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; fair value of assets acquired in a business combination; contingent consideration related to business combinations; litigation accruals; contract assets; various other allowances, reserves and accruals; assumptions related to the determination of stock-based compensation; and the determination of right-of-use assets and lease liabilities. 
The Company considered the impact of the COVID-19 pandemic on the assumptions and estimates used when preparing its financial statements including, but not limited to, the allowance for doubtful accounts, valuation allowances, contract asset and contingent consideration. These assumptions and estimates may change as new events occur and additional information is obtained. If economic conditions caused by the COVID-19 pandemic do not recover as currently estimated by management, such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity.
Certain Risks and Concentrations
LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud.
Financial instruments, which potentially subject the Company to concentration of credit risk at September 30, 2022, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit. The Company requires certain Network Partners to maintain security deposits with the Company, which in the event of non-payment, would be applied against any accounts receivable outstanding.
Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the Company's marketplace.
Lenders and lead purchasers participating on the Company's marketplace can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders and lead purchasers can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans and other products from Network Partners without utilizing the Company's services, the Company's ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the Network Partners whose loans and other financial products are offered on its online marketplace, consumers may obtain offers from these Network Partners without using its service.
Other than a support services office in India, the Company's operations are geographically limited to and dependent upon the economic condition of the United States.
Litigation Settlements and Contingencies
Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements.
Recently Adopted Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, which simplifies the accounting for convertible instruments, amends the derivatives scope exception guidance for contracts in an entity’s own equity, and amends the related earnings-per-share guidance. Under the new guidance, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. Additionally, the new guidance requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. This ASU is effective for annual and interim reporting periods beginning after December 15, 2021, with early adoption permitted for periods beginning after December 15, 2020. An entity may adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition.
9


LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective transition approach and recognized the cumulative effect of initially applying ASU 2020-06 as a $44.4 million adjustment to the opening balance of accumulated deficit, comprised of $60.8 million for the interest adjustment, net of $16.4 million for the related tax impacts. The recombination of the equity conversion component of our convertible debt remaining outstanding caused a reduction in additional paid-in capital and an increase in deferred income tax assets. The removal of the remaining debt discounts recorded for this previous separation had the effect of increasing our net debt balance. ASU 2020-06 also requires the dilutive impact of convertible debt instruments to utilize the if-converted method when calculating diluted earnings per share and the result is more dilutive. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. See Note 12—Debt for further information.
The cumulative effect of the changes made to the consolidated January 1, 2022 balance sheet for the adoption of ASU 2020-06 were as follows (in thousands):
December 31, 2021Adjustments due to
ASU 2020-06
January 1, 2022
Assets:
Deferred income tax assets$87,581 $23,979 $111,560 
Liabilities:
Current portion of long-term debt$166,008 $3,213 $169,221 
Long-term debt478,151 86,069 564,220 
Shareholders' equity:
Additional paid-in capital$1,242,794 $(109,750)$1,133,044 
Accumulated deficit(571,794)44,447 (527,347)
The adoption of ASU 2020-06 did not impact our cash flows or compliance with debt covenants.
Recently Issued Accounting Pronouncements

The Company has considered the applicability of recently issued accounting pronouncements by the Financial Accounting Standards Board and have determined that they are not applicable or are not expected to have a material impact on our consolidated financial statements.
NOTE 3—REVENUE
Revenue is as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Home$64,927 $112,422 $240,809 $345,408 
Credit cards24,298 26,914 81,426 66,975 
Personal loans37,701 33,803 115,209 73,879 
Other Consumer40,662 39,294 113,238 92,740 
Total Consumer102,661 100,011 309,873 233,594 
Insurance70,231 84,837 232,025 260,714 
Other17 180 230 498 
Total revenue$237,836 $297,450 $782,937 $840,214 
The Company derives its revenue primarily from match fees and closing fees. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and promised services have transferred to the customer. The Company's services are generally transferred to the customer at a point in time.
10


LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue from Home products is primarily generated from upfront match fees paid by mortgage Network Partners that receive a loan request, and in some cases upfront fees for clicks or call transfers. Match fees and upfront fees for clicks and call transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a loan request to the customer.
Revenue from Consumer products is generated by match and other upfront fees for clicks or call transfers, as well as from closing fees, approval fees and upfront service and subscription fees. Closing fees are derived from lenders on certain auto loans, business loans, personal loans and student loans when the lender funds a loan with the consumer. Approval fees are derived from credit card issuers when the credit card consumer receives card approval from the credit card issuer. Upfront service fees and subscription fees are derived from consumers in the Company's credit services product. Upfront fees paid by consumers are recognized as revenue over the estimated time the consumer will remain a customer and receive services. Subscription fees are recognized over the period a consumer is receiving services.
The Company recognizes revenue on closing fees and approval fees at the point when a loan request or a credit card consumer is delivered to the customer. The Company's contractual right to closing fees and approval fees is not contemporaneous with the satisfaction of the performance obligation to deliver a loan request or a credit card consumer to the customer. As such, the Company records a contract asset at each reporting period-end related to the estimated variable consideration on closing fees and approval fees for which the Company has satisfied the related performance obligation but are still pending the loan closing or credit card approval before the Company has a contractual right to payment. This estimate is based on the Company's historical closing rates and historical time between when a consumer request for a loan or credit card is delivered to the lender or card issuer and when the loan is closed by the lender or approved by the card issuer.
Revenue from the Company's Insurance products is primarily generated from upfront match fees and upfront fees for website clicks or fees for calls. Match fees and upfront fees for clicks and call transfers are earned through the delivery of consumer requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a consumer request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a consumer request to the customer.
The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $12.2 million and $9.1 million at September 30, 2022 and December 31, 2021, respectively.
The contract liability recorded within accrued expenses and other current liabilities on the consolidated balance sheets related to upfront fees paid by consumers was $0.9 million and $0.8 million at September 30, 2022 and December 31, 2021, respectively. During the first nine months of 2022, the Company recognized revenue of $0.8 million that was included in the contract liability balance at December 31, 2021. During the first nine months of 2021, the Company recognized revenue of $0.7 million that was included in the contract liability balance at December 31, 2020.
Revenue recognized in any reporting period includes estimated variable consideration for which the Company has satisfied the related performance obligations but are still pending the occurrence or non-occurrence of a future event outside the Company's control (such as lenders providing loans to consumers or credit card approvals of consumers) before the Company has a contractual right to payment. The Company recognized increases to such revenue from prior periods. This increase was $0.1 million in the third quarter of 2022, and was $0.4 million in the third quarter of 2021.
NOTE 4—CASH AND RESTRICTED CASH
Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands):
September 30,
2022
December 31,
2021
Cash and cash equivalents$285,538 $251,231 
Restricted cash and cash equivalents127 111 
Total cash, cash equivalents, restricted cash and restricted cash equivalents$285,665 $251,342 
11


LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5—ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts.
The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, current and expected economic conditions and the specific customer's current and expected ability to pay its obligation. Accounts receivable are considered past due when they are outstanding longer than the contractual payment terms. Accounts receivable are written off when management deems them uncollectible.
A reconciliation of the beginning and ending balances of the allowance for doubtful accounts is as follows (in thousands):
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Balance, beginning of the period$2,300 $1,473 $1,456 $1,402 
Charges to earnings679 678 2,708 1,823 
Write-off of uncollectible accounts receivable(623)(645)(1,808)(1,724)
Recoveries collected   5 
Balance, end of the period$2,356 $1,506 $2,356 $1,506 
NOTE 6—GOODWILL AND INTANGIBLE ASSETS
The balance of goodwill, net and intangible assets, net is as follows (in thousands):
 September 30,
2022
December 31,
2021
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, net54,047 75,621 
Total intangible assets, net$64,189 $85,763 
Goodwill and Indefinite-Lived Intangible Assets
The Company's goodwill at each of September 30, 2022 and December 31, 2021 consists of $59.3 million associated with the Home segment, $166.1 million associated with the Consumer segment, and $194.7 million associated with the Insurance segment.
At June 30, 2022, the Company assessed the qualitative factors in its impairment testing of goodwill and determined that the effects of the challenging interest rate environment, consumer price inflation, and the decline in the Company's market capitalization required a quantitative impairment test be performed. The quantitative goodwill impairment test found that the fair value of each reporting unit exceeded its carrying amount, indicating no goodwill impairment. The Company will monitor the recovery of the Insurance reporting unit. The property and casualty auto industry is experiencing challenges caused by inflation, supply chain challenges, and rising severity and frequency of claims. Changes in the timing of the recovery compared to current expectations could cause an impairment to the Insurance reporting unit.
Intangible assets with indefinite lives relate to the Company's trademarks.
12


LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible Assets with Definite Lives
Intangible assets with definite lives relate to the following (in thousands):
 CostAccumulated
Amortization
Net
Technology$74,900 $(71,108)$3,792 
Customer lists77,300 (29,248)48,052 
Trademarks and tradenames10,700 (8,497)2,203 
Balance at September 30, 2022$162,900 $(108,853)$54,047 
 CostAccumulated
Amortization
Net
Technology$87,700 $(69,369)$18,331 
Customer lists77,300 (24,668)52,632 
Trademarks and tradenames11,700 (7,767)3,933 
Website content26,100 (25,375)725 
Balance at December 31, 2021$202,800 $(127,179)$75,621 
Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of September 30, 2022, future amortization is estimated to be as follows (in thousands):
 Amortization Expense
Remainder of current year$3,682 
Year ending December 31, 20238,602 
Year ending December 31, 20246,747 
Year ending December 31, 20256,259 
Year ending December 31, 20265,504 
Thereafter23,253 
Total intangible assets with definite lives, net$54,047 
NOTE 7—EQUITY INVESTMENTS
In January 2022, the Company acquired an equity interest in EarnUp Inc. (“EarnUp”) for $15.0 million. The company is a consumer-first mortgage payment platform that intelligently automates loan payment scheduling and helps consumers better manage their money and improve their financial well-being.
On February 28, 2020, the Company acquired an equity interest in Stash Financial, Inc. (“Stash”) for $80.0 million. On January 6, 2021, the Company acquired an additional equity interest for $1.2 million. On October 18, 2021, the Company entered into a stock transfer agreement with third parties to sell a portion of its Stash equity securities for $46.3 million. The Company sold $35.3 million in October and closed on an additional $11.0 million in November 2021. The Company recorded a realized gain of $27.9 million based on the sale of Stash equity securities under the stock transfer agreement, which is included within other income on the consolidated statement of operations and comprehensive income. Stash is a consumer investing and banking platform. Stash brings together banking, investing, and financial services education into one seamless experience offering a full suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back® rewards program.
The equity securities do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its securities. The equity securities will be carried at cost less impairment, if any, and subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar investments with any gains or losses recorded to the consolidated statement of operations and comprehensive income. In 2021, the Company recorded a net unrealized gain on the investment in Stash of $95.4 million as a result of an adjustment to the fair
13


LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

value of the Stash equity securities based on observable price changes, which is included within other income on the consolidated statement of operations and comprehensive income.
As of September 30, 2022, there have been no impairments to the acquisition cost of the equity securities.
NOTE 8—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
 September 30,
2022
December 31,
2021
Accrued advertising expense$48,162 $59,150 
Accrued compensation and benefits8,954 16,330 
Accrued professional fees3,021 1,887 
Customer deposits and escrows7,442 7,546 
Contribution to LendingTree Foundation 3,333 
Current lease liabilities8,909 8,595 
Other7,976 9,890 
Total accrued expenses and other current liabilities$84,464 $106,731 
NOTE 9—SHAREHOLDERS' EQUITY 
Basic and diluted income per share was determined based on the following share data (in thousands):
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Weighted average basic common shares12,758 13,268 12,794 13,194 
Effect of stock options   452 
Effect of dilutive share awards   96 
Effect of Convertible Senior Notes and warrants   55 
Weighted average diluted common shares12,758 13,268 12,794 13,797 
For the third quarter and first nine months of 2022, the Company had losses from continuing operations and, as a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding was used to compute loss per share. Approximately 0.1 million and 0.2 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2022 respectively, because their inclusion would have been anti-dilutive. Approximately 0.4 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the third quarter of 2021.
For the third quarter of 2022, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.5 million restricted stock units. For the first nine months of 2022, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.4 million restricted stock units. For the third quarter of 2021, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 0.9 million shares of common stock and 0.2 million restricted stock units. For the first nine months of 2021, the weighted average shares that were anti-dilutive included options to purchase 0.4 million shares of common stock and 0.1 million restricted stock units.
The convertible notes and the warrants issued by the Company could be converted into the Company’s common stock, subject to certain contingencies. See Note 12—Debt for additional information. On January 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method. Following the adoption, the if-converted method is used for diluted net income per share calculation of our convertible notes. Prior to the adoption of ASU 2020-06 the dilutive impact of the
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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

convertible notes was calculated using the treasury stock method. See Note 2—Significant Accounting Policies for additional information.
Approximately 1.2 million shares and 2.1 million shares related to the potentially dilutive shares of the Company's common stock associated with the 0.50% Convertible Senior Notes due July 15, 2025 and the 0.625% Convertible Senior Notes due June 1, 2022 were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2022, respectively, because their inclusion would have been anti-dilutive. Shares of the Company's stock associated with the warrants issued by the Company in 2017 and 2020 were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2022 and 2021 as they were anti-dilutive since the strike price of the warrants was greater than the average market price of the Company's common stock during the relevant periods.
Shares of the Company's common stock associated with the 0.50% Convertible Senior Notes due July 15, 2025 were excluded from the calculation of diluted income per share for the third quarter and first nine months of 2021 and shares of the Company's common stock associated with the 0.625% Convertible Senior Notes due June 1, 2022 were excluded in the third quarter of 2021 as they were anti-dilutive since the conversion price of the notes was greater than the average market price of the Company's common stock during the relevant periods.
The employee stock purchase plan did not have a material impact to the calculation of diluted shares.
Common Stock Repurchases
In each of February 2018 and February 2019, the board of directors authorized and the Company announced the repurchase of up to $100.0 million and $150.0 million, respectively, of LendingTree's common stock. During the nine months ended September 30, 2022, the Company purchased 379,895 shares of its common stock pursuant to this stock repurchase program. At September 30, 2022, approximately $96.7 million of the previous authorizations to repurchase common stock remain available.
NOTE 10—STOCK-BASED COMPENSATION
Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands):
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Cost of revenue$417 $371 $1,252 $1,231 
Selling and marketing expense2,198 1,805 6,522