LendingTree (TREE) Q3 2025: Non-Top 3 Carrier Spend Surges 60%, Bolstering Insurance Cycle Visibility

October 30, 2025 | By EarningsIQ Research

LendingTree’s Q3 saw a decisive return to insurance marketplace leadership, powered by a 60% YoY surge in spend from carriers ranked fourth to tenth, signaling depth and duration in the current insurance cycle. Margin expansion in high-touch consumer and small business verticals, alongside measured capital allocation, position the company for sustained growth into 2026. Management’s operational discipline and segment diversification are counterbalancing SEO turbulence and legacy mortgage headwinds, sharpening LendingTree’s defensive and offensive posture for the coming year.

Summary

• Insurance Demand Broadens: Spend from non-top-three carriers up 60%, underscoring cycle durability and competitive positioning.
• Consumer Segment Margin Strength: High-margin small business and credit card verticals drive record annualized margins and growth.
• Capital Flexibility Restored: Balance sheet deleveraging enables opportunistic buybacks and selective M&A, with a default focus on debt reduction.

Performance Analysis

LendingTree delivered its second-highest quarterly revenue in company history, reflecting six consecutive periods of top-line growth. Each of its three reporting segments posted double-digit year-over-year revenue and variable marketing dollar (VMD, a measure of gross profit after marketing spend) gains, demonstrating the resilience of its diversified marketplace model. The insurance segment, historically cyclical, reasserted leadership with a broadening of carrier spend beyond the top three partners, while the consumer segment’s small business and credit card businesses set new margin and growth benchmarks.

Insurance VMD expansion was particularly notable, with robust marketing budgets from a wider array of carriers, and home insurance VMD up 80% YoY now comprising nearly 20% of segment revenue. Consumer saw a 26% VMD and 11% revenue increase, led by a 50% surge in small business and improving credit card profitability. The home segment, despite a sluggish mortgage market, grew home equity product revenue by 35%, leveraging lender demand for alternative products as first mortgage activity remains at post-crisis lows.

• Insurance Cycle Depth: Non-top-three carrier spend up 60% YoY, signaling broad-based demand and less concentration risk.
• Small Business Outperformance: Concierge sales model yields 50% revenue growth, now the largest lending business within consumer.
• Home Equity as a Buffer: Home equity revenue up 35% offsets first mortgage softness, positioning the segment for eventual refi tailwinds.

LendingTree’s operational leverage is improving as VMD gains increasingly flow through to EBITDA, with management emphasizing both cost discipline and selective growth investment. The company’s balance sheet transformation, with leverage down from 4.4x to 2.6x in a year, provides new optionality for capital deployment.

Executive Commentary

Strategic Positioning

1. Insurance Marketplace Leadership and Cycle Durability

LendingTree’s insurance marketplace has regained a leadership position by capitalizing on a broadening base of carrier demand. The 60% YoY increase in spend from carriers ranked fourth through tenth, beyond the traditional top three, reduces concentration risk and extends cycle visibility. Management’s focus on matching high-intent consumers with carriers aligns with insurers’ aggressive market share pursuits in a currently profitable underwriting environment.

2. High-Margin Consumer Expansion Through Concierge Sales

The consumer segment’s margin profile is being reshaped by the rapid expansion of its high-touch concierge sales strategy, particularly in small business lending. This approach, which emphasizes personalized service and higher conversion rates, has propelled small business to the largest lending business in the segment, with management signaling plans to replicate the model in additional verticals to further enhance monetization and customer experience.

3. Capital Allocation Discipline and Balance Sheet Flexibility

With leverage reduced to 2.6x, LendingTree now enjoys greater capital allocation flexibility. The default priority remains debt reduction, offering a risk-free return above 8%, but the company is also positioned to consider opportunistic share repurchases and targeted bolt-on acquisitions. Management has ruled out large transformative deals, instead focusing on complementary product or technology tuck-ins that can be scaled through LendingTree’s distribution network.

4. Navigating SEO and Traffic Shifts in a Generative AI Era

SEO turbulence and the rise of LLM-driven (large language model) traffic are reshaping the digital lead generation landscape. While LLM and AI-originated leads convert at rates four to five times higher than legacy SEO, their current volume remains low. LendingTree’s expertise in paid search and its early focus on LLM content and placement position it to weather the transition, though management warns the era of “free rent on Google” is ending for the industry.

5. Mortgage Segment Poised for Inflection, But Timing Uncertain

The home segment’s growth is currently driven by home equity products, as first mortgage activity remains depressed. Management is preparing for a potential refinance boom if rates fall to around 5.75%, at which point three times as many borrowers would be “in the money.” The company’s strategy to expand its lender network aims to capture outsized volume when the cycle turns.

Key Considerations

LendingTree’s Q3 results highlight a business balancing near-term growth with long-term positioning as digital lead generation undergoes structural change. The company’s ability to grow through segment diversification, operational discipline, and capital flexibility are central to its current investment thesis.

Key Considerations:

• Insurance Revenue Mix Shift: Home and health insurance VMD up 80% and 41% respectively, now comprising nearly a third of insurance segment VMD.
• Concierge Model Expansion: Management plans to deploy high-touch sales to additional verticals, targeting both customer experience and monetization gains.
• SEO Disruption Risk: Industry-wide SEO turbulence is accelerating the shift to paid and LLM-originated traffic; LendingTree’s paid search strength is a relative advantage.
• Mortgage Inflection Preparation: Aggressive lender network expansion positions the company for rapid share capture if rates fall and refinance volume returns.
• Capital Allocation Optionality: Deleveraging creates room for buybacks and tuck-in M&A, but discipline remains the default posture.

Risks

Legacy SEO volatility presents a structural challenge as the industry shifts toward generative AI-driven search, potentially impacting lead volumes and acquisition costs. Mortgage segment growth remains hostage to macro rate movements, and while insurance demand is robust, margin variability linked to product mix (clicks vs. leads/calls) could pressure profitability. Competitive intensity, especially from new digital entrants, and the risk of over-indexing on paid channels, warrant close monitoring.

Forward Outlook

For Q4 2025, LendingTree guided to:

• Continued insurance segment growth, with broad-based carrier demand expected to persist into at least the first half of 2026.
• Steady consumer segment expansion, led by small business and improving credit card profitability.

For full-year 2025, management maintained its focus on:

• Operational leverage through VMD growth and expense discipline
• Balance sheet strength, with incremental capital flexibility for opportunistic buybacks or bolt-on M&A

Management highlighted several factors that will shape results:

• Insurance cycle health and the breadth of carrier participation
• Timing of a mortgage refinance inflection, contingent on rate declines

Takeaways

LendingTree’s Q3 underscores the benefits of segment diversification and operational adaptability as the company navigates a shifting digital landscape and prepares for cyclical mortgage upside. Investors should focus on the sustainability of insurance demand, the scalability of the concierge sales model, and the company’s ability to capitalize on emerging traffic sources while maintaining capital discipline.

• Insurance Cycle Depth: Broader carrier participation and strong home/health insurance growth reduce volatility and extend the revenue cycle.
• Consumer Margin Upside: Small business and credit card verticals are driving record profitability, with further expansion likely as concierge models roll out.
• Watch Mortgage Inflection: The timing and magnitude of a refinance wave remain the key swing factor for outsized upside in 2026.

Conclusion

LendingTree’s Q3 2025 results reflect a marketplace operator regaining insurance leadership, unlocking high-margin consumer growth, and restoring balance sheet flexibility. The company’s strategic pivot toward operational excellence and capital discipline positions it well for both cyclical upside and secular disruption in digital lead generation.

Industry Read-Through

Digital financial marketplaces are entering a new phase where traffic acquisition and quality are increasingly shaped by paid channels and generative AI. LendingTree’s experience underscores the need for diversified traffic sources and high-intent lead generation as legacy SEO becomes less reliable. Insurance marketing budgets are expanding beyond top carriers, suggesting a broader industry recovery, while mortgage origination remains rate dependent. Competitors reliant on organic search face mounting risk, and those with operational flexibility and capital discipline are best positioned for the next cycle.

TREE Financials Fintech Marketplace Insurance Lead Generation Capital Allocation