Tree.com Inc. recorded a year-to-year 33% increase in adjusted fourth quarter revenue “driven by a substantial increase in the mortgage business.”
Fourth-quarter 2012 revenue for the operator of LendingTree.com increased from $5.9 million in 4Q11, on a non-GAAP adjusted basis, to $23.9 million in 4Q12. It also was up 3% from continuing operations revenue of $23.3 million in 3Q12.
According to chairman and CEO of Tree.com, Doug Lebda, the fourth quarter “was a record quarter” that further continued the momentum gained from the sale of substantially all of its mortgage origination business in June 2012.
It marked Tree.com’s “second full quarter as a pure-play performance marketing company,” he said, noting that its revenue growth and variable marketing margin increased to “record levels, in spite of seasonal pressures.”
“The mortgage business performed particularly well in the fourth quarter, with revenue 10% higher than the third quarter and 225% higher than GAAP revenue in the prior year quarter,” Lebda said in a press release.
“The number of mortgage lenders active on our exchange grew over 15% from the third quarter and our monetization of consumer loan requests reflected robust lead quality,” Lebda said.
The company’s mortgage business revenue was 55% higher than its adjusted mortgage revenue in 4Q11. (Tree.com provides adjusted revenue for reasons related to a change in its reporting in the third quarter of last year related to the mortgage-origination asset sale.)
Continuing operations adjusted EBITDA of $2.8 million declined $500,000, or 14%, from 4Q11 and $1.1 million, or 28%, from 3Q12.
This was in part due to increased product development costs related to the Loan Explorer rate table and reverse mortgage products the company launched commercially in January 2013.