Slide 1: Investor Presentation
Investor Presentation December, 2014 Tree.com, Inc. Nasdaq: TREE
Slide 2: Forward-Looking Statements
Forward-Looking Statements Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 The matters contained in this presentation may be considered to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as ame
Slide 3: A True Online Marketplace
A True Online Marketplace Matching Consumers with Lenders and Other Service Providers Free Credit Scores Tools & Resources Retail Banks Ratings & Reviews Access to Cost-Efficient Mortgage Cos. Multiple Customer Offers Acquisition Specialty & P2P Performance Marketing Auto Machine Dealers/ Lenders Ex
Slide 4: Where Consumers Shop for Money
Where Consumers Shop for Money THE Online Marketplace for Analogous to other marketplaces Consumer Loan Shopping for Travel, Retail, etc. 4
Slide 5: Working With Top-Tier Lenders
Working With Top-Tier Lenders… …of all models… …across loan categories Banks $16B+ Annual Loan Originations(1) Facilitated by LendingTree Mortgage Other Lenders/ Personal Loans Brokers Auto Loans Home Equity Mortgage P2P & Specialty Finance $16B+ Student Loan Refi Small Business 1) Annual run-rate b
Slide 6: Providing Value to Both Borrowers and Lenders
Providing Value to Both Borrowers and Lenders Borrowers can save by Lenders receive predictable, comparison-shopping targeted, cost-efficient volume Sample Personal Loan Borrower(1) Highly-Targeted “Filters” 20% Savings Lender #1 17.0% Lender #2 18.2% Multiple Delivery Methods Lender #3 21.0% Lender
Slide 7: Addressable Markets
Addressable Markets Well-positioned to capture share across lending categories Mortgage – the largest component $12 Trillion Debt Outstanding of US consumer debt (US Consumer(1) + Small Business(2)) 7x larger than the #2 category Other Small Biz $0.3 LendingTree facilitating ~1.2% of Credit Card
Slide 8: Continuous Product Innovation
Continuous Product Innovation Student Loan Refi – Q4 ‘14 Small Biz Loans – Q3 ‘14 Local Introductions – Q1 ‘14 Loan Officer Directory – Q1 ‘14 Personal Loans – Q3 ‘13 Mobile Experience – Q2 ‘13 Credit Cards – Q2 ‘13 Reverse Mortgage – Q1 ‘13 8
Slide 9: All-New My LendingTree
All-New My LendingTree 100% free credit score…“with a brain” Free credit score for new and existing customers enables: Proactive, market-based savings alerts to consumers Repeat user engagement – lifetime value Mortgage Exposure to broader set of Mortgage Purchase Auto LT offerings Refi Purcha
Slide 10: My LendingTree (cont'd)
My LendingTree (cont’d) New user growth accelerating 300k+ users in 160 days Daily New Users Cumulative New Users 4,000 3rd 100k Launched in 40 days 3,500 TV ad 3,000 Began paid Marketing 2nd 100k 2,500 in 47 days Mobile 2,000 enabled 1,500 1st 100k in 73 days 1,000 500 0 Jun-14 Jul-14 Aug-14 Sep-14
Slide 11: The Iconic Brand
The Iconic Brand 71% brand awareness Q3 ‘14 - first TV spot targeting personal loans $1+ billion lifetime investment Nov ‘14 – “Free credit score with a brain” targeting My LendingTree signups Aided Brand Awareness(1) 100% 80% 78% 80% 71% 69% 62% 60% 40% 18% 20% 14% 9% 0% Bank of America Wells Fargo
Slide 12: Our Vision
Our Vision “To empower consumers to make the smartest decisions at the most critical times in their lives and partners to build enduring and meaningful businesses with us.” , ~1.2% (3) 12
Slide 13: How We Make Money
How We Make Money Facilitate loan originations for our lender network 1) Increase lender demand 2) Improve lender conversion 3) Enhance marketing efficiency Variable Revenue Marketing & Marketing Advertising Margin Funded Loans , ~1.2% (3) Qualified Lenders Consumers 13
Slide 14: Operating Model
Operating Model % of Revenue(1) • Transmit Fees Revenue 100% • Closed Loan Fees • Hybrid • TV • Paid Search • Social Media - Working media expense 57% • Radio • Organic Search • Partnerships • Print • Display • Email • Agency Fees - Non-media expense 3% • Creative Production • Ad Serving = Variable
Slide 15: Quarterly Financial Performance
Quarterly Financial Performance Revenue & VMM ($ Mil) Adjusted EBITDA ($ Mil) $50 100% $6 $5.9 $5.8 30% Launched National Brand Campaign $5.5 $5.7 $45 90% $5.4 - $42.1 $41.3 $42.5 $4.7 $40.0 - $5 25% $40 $40.5 80% $37.4 $37.3 $36.4 $4.5 $35 70% $4.1 $4 20% $30 $28.1 60% $3.4 16% 48% 15% 14% 14% $25
Slide 16: Unpacking Growth: Mortgage vs. Non-Mortgage
Unpacking Growth: Mortgage vs. Non-Mortgage Revenue ($ Mil) Mortgage Revenue Outperforming Market Originations $45 100% 95% Y/Y Growth 75% $42.1 $41.3 75% 51% $40.0 $7.5 50% 35% $9.3 30% $40 25% 23% 12% $5.8 5% $37.4 $37.3 $36.4 0% (3%) $4.4 (25%) $3.7 $4.7 $35 (24%) (27%) (50%) (44%) (45%) $34.7 (5
Slide 17: Selected Balance Sheet Items
Selected Balance Sheet Items ($ Mil) 9/30/14 Cash & Equivalents $83.6 Restricted Cash & Equivalents 21.9 Accounts Receivable 13.8 Total Current Assets 121.1 Working capital of PP&E 5.6 $63.4M(1) Goodwill 3.6 Intangible Assets 11.6 Significant NOLs(2) Total Assets $142.0 $30M Federal Accounts Payab
Slide 18: Guidance Summary & Investment Highlights
Guidance Summary & Investment Highlights FY 2014 Guidance Investment Highlights Revenue $164.0 - $166.0 THE marketplace for consumer loans Y/Y Growth 18% - 19% Providing value to consumers & lenders Leader in largest loan category – Mortgage VMM $ $63.0 - $65.0 At forefront of high-growth lending ca
Slide 19: For more information please contact:
For more information please contact: Trent Ziegler VP – Finance & Investor Relations trent.ziegler@tree.com 704-943-8294 Alex Mandel Chief Financial Officer alex.mandel@tree.com Doug Lebda CEO and Chairman doug@tree.com 19
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