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Table of Contents
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 June 30, 2021
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 
 
https://cdn.kscope.io/3584228c31616761aedffcf643787faa-tree-20210630_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 July 23, 2021, there were 13,315,038 shares of the registrant's common stock, par value $.01 per share, outstanding, excluding treasury shares.




TABLE OF CONTENTS

  Page
Number
   
   

2

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements 

LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited) 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
 (in thousands, except per share amounts)
Revenue$270,014 $184,326 $542,764 $467,410 
Costs and expenses:    
Cost of revenue (exclusive of depreciation and amortization shown separately below)
13,934 13,464 27,829 27,716 
Selling and marketing expense185,206 113,921 382,668 309,459 
General and administrative expense39,811 28,489 74,800 60,571 
Product development13,290 10,812 25,758 21,775 
Depreciation4,443 3,550 8,161 6,928 
Amortization of intangibles11,310 13,756 22,622 27,513 
Change in fair value of contingent consideration(8,850)9,175 (8,053)1,053 
Severance 32  190 
Litigation settlements and contingencies322 (1,325)338 (996)
Total costs and expenses259,466 191,874 534,123 454,209 
Operating income (loss)10,548 (7,548)8,641 13,201 
Other (expense) income, net:    
Interest expense, net(9,840)(4,955)(20,055)(9,789)
Other income 7 40,072 7 
Income (loss) before income taxes708 (12,496)28,658 3,419 
Income tax benefit9,092 3,880 454 6,941 
Net income (loss) from continuing operations9,800 (8,616)29,112 10,360 
Loss from discontinued operations, net of tax(3,199)(21,141)(3,462)(25,716)
Net income (loss) and comprehensive income (loss)$6,601 $(29,757)$25,650 $(15,356)
Weighted average shares outstanding:
Basic13,243 12,984 13,157 12,971 
Diluted13,719 12,984 13,913 13,954 
Income (loss) per share from continuing operations:  
Basic$0.74 $(0.66)$2.21 $0.80 
Diluted$0.71 $(0.66)$2.09 $0.74 
Loss per share from discontinued operations:
Basic$(0.24)$(1.63)$(0.26)$(1.98)
Diluted$(0.23)$(1.63)$(0.25)$(1.84)
Net income (loss) per share:
Basic$0.50 $(2.29)$1.95 $(1.18)
Diluted$0.48 $(2.29)$1.84 $(1.10)
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
3

Table of Contents
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 (Unaudited) 
 June 30,
2021
December 31, 2020
 (in thousands, except par value and share amounts)
ASSETS:  
Cash and cash equivalents$203,164 $169,932 
Restricted cash and cash equivalents83 117 
Accounts receivable (net of allowance of $1,473 and $1,402, respectively)
124,076 89,841 
Prepaid and other current assets18,211 27,949 
Current assets of discontinued operations 8,570 
Total current assets345,534 296,409 
Property and equipment (net of accumulated depreciation of $23,696 and $20,238, respectively)
74,701 62,381 
Operating lease right-of-use assets79,967 84,109 
Goodwill420,139 420,139 
Intangible assets, net105,880 128,502 
Deferred income tax assets96,679 96,224 
Equity investment121,253 80,000 
Other non-current assets5,440 5,334 
Non-current assets of discontinued operations17,044 15,892 
Total assets$1,266,637 $1,188,990 
LIABILITIES:  
Current portion of long-term debt$161,723 $ 
Accounts payable, trade6,623 10,111 
Accrued expenses and other current liabilities106,376 101,196 
Current contingent consideration196  
Current liabilities of discontinued operations4,933 536 
Total current liabilities279,851 111,843 
Long-term debt465,876 611,412 
Operating lease liabilities100,153 92,363 
Non-current contingent consideration 8,249 
Other non-current liabilities389 362 
Total liabilities846,269 824,229 
Commitments and contingencies (Note 14)
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; 15,955,742 and 15,766,193 shares issued, respectively, and 13,314,424 and 13,124,875 shares outstanding, respectively
160 158 
Additional paid-in capital1,218,628 1,188,673 
Accumulated deficit(615,259)(640,909)
Treasury stock; 2,641,318 shares
(183,161)(183,161)
Total shareholders' equity420,368 364,761 
Total liabilities and shareholders' equity$1,266,637 $1,188,990 
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
4

Table of Contents
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 (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, 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)

  Common Stock Treasury Stock
 TotalNumber
of Shares
AmountAdditional
Paid-in
Capital
Accumulated
Deficit
Number
of Shares
Amount
 (in thousands)
Balance as of December 31, 2019$402,326 15,677 $157 $1,177,984 $(592,654)2,641 $(183,161)
Net income and comprehensive income14,401 — — — 14,401 — — 
Non-cash compensation11,917 — — 11,917 — — — 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(5,087)27 — (5,087)— — — 
Other — — (1)1 — — 
Balance as of March 31, 2020$423,557 15,704$157 $1,184,813 $(578,252)2,641$(183,161)
Net loss and comprehensive loss(29,757)— — — (29,757)— — 
Non-cash compensation13,158 — — 13,158 — — — 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(981)27 — (981)— — — 
Balance as of June 30, 2020$405,977 15,731 $157 $1,196,990 $(608,009)2,641 $(183,161)
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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LENDINGTREE, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six Months Ended
June 30,
 20212020
 (in thousands)
Cash flows from operating activities attributable to continuing operations:  
Net income (loss) and comprehensive income (loss)$25,650 $(15,356)
Less: Loss from discontinued operations, net of tax3,462 25,716 
Income from continuing operations29,112 10,360 
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations:
Loss on impairments and disposal of assets1,400 552 
Amortization of intangibles22,622 27,513 
Depreciation8,161 6,928 
Non-cash compensation expense34,730 25,075 
Deferred income taxes(455)(7,000)
Change in fair value of contingent consideration(8,053)1,053 
Unrealized gain on investments(40,072) 
Bad debt expense1,145 949 
Amortization of debt issuance costs2,547 1,158 
Amortization of convertible debt discount14,670 6,250 
Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities11,079 1,956 
Changes in current assets and liabilities:
Accounts receivable(35,381)35,501 
Prepaid and other current assets(680)1,369 
Accounts payable, accrued expenses and other current liabilities3,845 (19,134)
Current contingent consideration (2,670)
Income taxes receivable10,322 63 
Other, net(412)(2,007)
Net cash provided by operating activities attributable to continuing operations54,580 87,916 
Cash flows from investing activities attributable to continuing operations:
Capital expenditures(23,585)(9,108)
Equity investment(1,180)(80,000)
Net cash used in investing activities attributable to continuing operations(24,765)(89,108)
Cash flows from financing activities attributable to continuing operations:
Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of stock options(4,771)(6,068)
Net proceeds from revolving credit facility 55,000 
Payment of debt issuance costs(168)(306)
Contingent consideration payments (3,330)
Other financing activities(31)(14)
Net cash (used in) provided by financing activities attributable to continuing operations(4,970)45,282 
Total cash provided by continuing operations24,845 44,090 
Discontinued operations:
Net cash provided by (used in) operating activities attributable to discontinued operations8,353 (2,571)
Total cash provided by (used in) discontinued operations8,353 (2,571)
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents33,198 41,519 
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period170,049 60,339 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$203,247 $101,858 
 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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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 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. The HLC Bankruptcy case was closed on July 14, 2021. See Note 17—Discontinued Operations for additional information. Intercompany transactions and accounts have been eliminated.
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 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 17Discontinued Operations for additional information.
Basis of Presentation
The accompanying unaudited interim consolidated financial statements as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020, 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 six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, or any other period. The accompanying consolidated balance sheet as of December 31, 2020 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2020 (the "2020 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 2020 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 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. 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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; HLC ownership related claims; 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 June 30, 2021, 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 May 2021, the FASB issued ASU 2021-04 to clarify and reduce diversity in accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The amendments clarify that a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange should be accounted for as an exchange of the original instrument for a new instrument. This ASU is effective for annual and interim reporting periods beginning after December 15, 2021. Early adoption is permitted, including adoption in interim periods. An entity should adopt the guidance as of the beginning of its annual fiscal year. The amendments should be applied prospectively to modifications or exchanges occurring on or after the date of adoption. The Company adopted ASU 2021-04 in the second quarter of 2021.
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes, and clarifies certain aspects of the current guidance to improve consistency among reporting entities. This ASU is effective for annual and interim reporting periods beginning after December 15, 2020. Early adoption was permitted, including adoption in interim periods. Entities electing early adoption were required to adopt all amendments in the same period. Most amendments require prospective application while others are to be applied on a retrospective basis for all
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2019-12 in the first quarter of 2021. The amendments applicable to the Company required prospective application, and do not have material impacts to its consolidated financial statements.
Recently Issued 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. This ASU is effective for annual and interim reporting periods beginning after December 15, 2021. Early adoption is permitted for fiscal years beginning after December 15, 2020, including adoption in interim periods. An entity should adopt the guidance as of the beginning of its annual fiscal year. An entity may adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition. The Company expects the amendments to impact its convertible senior notes and warrants issued and is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.
NOTE 3—REVENUE
Revenue is as follows (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
Home$104,861 $74,123 $232,986 $153,297 
Credit cards22,424 7,194 40,061 58,780 
Personal loans25,208 8,827 40,076 40,336 
Other Consumer28,044 21,097 53,446 57,926 
Total Consumer75,676 37,118 133,583 157,042 
Insurance89,263 72,919 175,877 155,656 
Other214 166 318 1,415 
Total revenue$270,014 $184,326 $542,764 $467,410 
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.
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
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 in the Company's Consumer business was $7.3 million and $6.4 million at June 30, 2021 and December 31, 2020, respectively.
The contract liability recorded within accrued expenses and other current liabilities on the consolidated balance sheets related to upfront fees paid by consumers in the Company's Consumer business was $1.1 million and $0.7 million at June 30, 2021 and December 31, 2020, respectively. During the second quarter and first six months of 2021, the Company recognized revenue of $0.1 million and $0.7 million, respectively, that was included in the contract liability balance at December 31, 2020. During the second quarter and first six months of 2020, the Company recognized revenue of $0.1 million and $0.6 million, respectively, that was included in the contract liability balance at December 31, 2019.
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 of $0.1 million and $0.3 million in the second quarters of 2021 and 2020, respectively.
NOTE 4—CASH AND RESTRICTED CASH
Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands):
June 30,
2021
December 31, 2020
Cash and cash equivalents$203,164 $169,932 
Restricted cash and cash equivalents83 117 
Total cash, cash equivalents, restricted cash and restricted cash equivalents$203,247 $170,049 
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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A reconciliation of the beginning and ending balances of the allowance for doubtful accounts is as follows (in thousands):
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Balance, beginning of the period$1,429 $2,021 $1,402 $1,466 
Charges to earnings629 69 1,145 949 
Write-off of uncollectible accounts receivable(585)(337)(1,079)(669)
Recoveries collected 3 5 10 
Balance, end of the period$1,473 $1,756 $1,473 $1,756 
NOTE 6—GOODWILL AND INTANGIBLE ASSETS
The balance of goodwill, net and intangible assets, net is as follows (in thousands):
 June 30,
2021
December 31, 2020
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, net95,738 118,360 
Total intangible assets, net$105,880 $128,502 
Goodwill and Indefinite-Lived Intangible Assets
The Company's goodwill at each of June 30, 2021 and December 31, 2020 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.
Intangible assets with indefinite lives relate to the Company's trademarks.
Intangible Assets with Definite Lives
Intangible assets with definite lives relate to the following (in thousands):
 CostAccumulated
Amortization
Net
Technology$87,700 $(58,768)$28,932 
Customer lists77,300 (21,614)55,686 
Trademarks and tradenames17,000 (11,513)5,487 
Website content43,200 (37,567)5,633 
Balance at June 30, 2021$225,200 $(129,462)$95,738 
 CostAccumulated
Amortization
Net
Technology$87,700 $(48,166)$39,534 
Customer lists77,300 (18,560)58,740 
Trademarks and tradenames17,200 (9,947)7,253 
Website content43,200 (30,367)12,833 
Balance at December 31, 2020$225,400 $(107,040)$118,360 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of June 30, 2021, future amortization is estimated to be as follows (in thousands):
 Amortization Expense
Remainder of current year$20,116 
Year ending December 31, 202225,256 
Year ending December 31, 20238,602 
Year ending December 31, 20246,747 
Year ending December 31, 20256,259 
Thereafter28,758 
Total intangible assets with definite lives, net$95,738 
NOTE 7—EQUITY INVESTMENT
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 additional equity interest for $1.2 million. 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 Stash equity securities do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its securities. The Stash equity securities will be carried at cost and subsequently marked to market upon observable market events with any gains or losses recorded to the consolidated statement of operations and comprehensive income. During the first six months of 2021, the Company recorded a gain on the investment in Stash of $40.1 million as a result of an adjustment to the fair value of the Stash equity securities based on observable market events, which is included within other income on the consolidated statement of operations and comprehensive income. As of June 30, 2021, there have been no impairments to the acquisition cost of the Stash equity securities.
NOTE 8—BUSINESS ACQUISITIONS
Changes in Contingent Consideration
In 2018, the Company acquired all of the outstanding equity interests of QuoteWizard.com, LLC (“QuoteWizard”) and Ovation Credit Services, Inc. (“Ovation”). During 2020, the Company made the final earnout payment related to the achievement of certain defined operating metrics for Ovation.
In 2017, the Company acquired certain assets of Snap Capital LLC, which does business under the name SnapCap (“SnapCap”). During 2020, the Company made the final earnout payments related to the achievement of certain defined earnings targets for SnapCap.
The Company will make an earnout payment ranging from zero to $23.4 million based on the achievement of certain defined performance targets for QuoteWizard.
Changes in the fair value of contingent consideration is summarized as follows (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
QuoteWizard$(8,850)$8,058 $(8,053)$(204)
Ovation 1,039  1,180 
SnapCap 78  77 
Total changes in fair value of contingent consideration$(8,850)$9,175 $(8,053)$1,053 
As of June 30, 2021, the estimated fair value of the contingent consideration for the QuoteWizard acquisition totaled $0.2 million, which is included in current contingent consideration in the accompanying consolidated balance sheet. The
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

estimated fair value of the contingent consideration payments is determined using an option pricing model. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable.
Any differences in the actual contingent consideration payments will be recorded in operating income in the consolidated statements of operations and comprehensive income.
NOTE 9—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
 June 30,
2021
December 31, 2020
Accrued advertising expense$62,840 $54,045 
Accrued compensation and benefits10,632 14,081 
Accrued professional fees3,278 1,869 
Customer deposits and escrows7,467 8,153 
Contribution to LendingTree Foundation3,333 3,333 
Current lease liabilities5,286 5,375 
Other13,540 14,340 
Total accrued expenses and other current liabilities$106,376 $101,196 
NOTE 10—SHAREHOLDERS' EQUITY 
Basic and diluted income per share was determined based on the following share data (in thousands):
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Weighted average basic common shares13,243 12,984 13,157 12,971 
Effect of stock options394  523 592 
Effect of dilutive share awards72  103 91 
Effect of Convertible Senior Notes and warrants10  130 300 
Weighted average diluted common shares13,719 12,984 13,913 13,954 
For the second 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 six months of 2021, the weighted average shares that were anti-dilutive included options to purchase 0.4 million shares of common stock.
For the second quarter of 2020, the Company had a loss 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 0.8 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the second quarter of 2020, because their inclusion would have been anti-dilutive. For the second quarter of 2020, the weighted average shares that were anti-dilutive included options to purchase 0.7 million shares of common stock and 0.1 million restricted stock units. For the first six months of 2020, the weighted average shares that were anti-dilutive included options to purchase 0.2 million shares of common stock.
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 13—Debt for additional information. 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 second quarter and first six months 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. Shares of the Company's common stock associated with the warrants were excluded from the calculation of diluted income per share for the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

second quarter and first six months of 2021 and the first six months of 2020 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.
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. There were no repurchases of the Company's common stock during the first six months of 2021 and 2020. At June 30, 2021, approximately $179.7 million of the previous authorizations to repurchase common stock remain available.
NOTE 11—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
June 30,
Six Months Ended
June 30,
 2021202020212020
Cost of revenue$463 $333 $860 $575 
Selling and marketing expense1,976 1,597 3,778 2,753 
General and administrative expense13,254 9,729 25,425 18,852 
Product development2,601 1,499 4,667 2,895 
Total non-cash compensation$18,294 $13,158 $34,730 $25,075 
Stock Options
A summary of changes in outstanding stock options is as follows:
 Number of OptionsWeighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value(a)
  (per option)(in years)(in thousands)
Options outstanding at January 1, 2021924,710 $111.82 
Granted (b)
69,258 243.71 
Exercised(156,113)7.17 
Forfeited(4,727)263.72 
Expired(35)371.25 
Options outstanding at June 30, 2021833,093 141.52 5.20$82,110 
Options exercisable at June 30, 2021543,666 $71.06 3.20$82,039 
(a)The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $211.88 on the last trading day of the quarter ended June 30, 2021 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on June 30, 2021. The intrinsic value changes based on the market value of the Company's common stock.
(b)During the six months ended June 30, 2021, the Company granted stock options to certain employees and members of the board of directors with a weighted average grant date fair value per share of $130.25, calculated using the Black-Scholes option pricing model, which vesting periods include (a) immediate vesting on grant date (b) earlier of one year from grant date and the Company's annual meeting of stockholders for 2022 and (c) three years from grant date.
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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows:
Expected term (1)
5.00 - 6.00 years
Expected dividend (2)
 
Expected volatility (3)
53 - 59%
Risk-free interest rate (4)
0.59 - 1.07%
(1)The expected term of stock options granted was calculated using the "Simplified Method," which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees.
(2)For all stock options granted in 2021,