The Ballantyne-based parent of LendingTree said Tuesday it lost $6.4 million in the first quarter, $3.7 million more than it did a year ago, as higher expenses offset record revenue.
Tree.com reported $40 million in revenue for the quarter, up 43 percent from the same period last year, in large part because it made more money from its mortgage business. The company sells leads to lenders who compete for consumers shopping online for various types of mortgages and other loans and services.
Expenses totaled $45.9 million, up 62 percent from $28.3 million a year ago. The increase was largely the result of $10 million more in selling and marketing expenses as the company rolled out new television commercials. The company also said its legal costs increased by $6.7 million from a year ago as its federal patent trial started in the quarter.
On a conference call with analysts, CEO Doug Lebda said the companys mortgage business is benefiting from lenders who are purchasing more leads to offset declining demand from consumers to refinance home loans. Nationwide, mortgage lenders are originating fewer refinance mortgages than a year ago because of increases in interest rates.
Lenders obviously need our volume to continue to maintain their profitability, Lebda said.
Although the bulk of Tree.coms revenue stems from its mortgage business, it matches lenders with borrowers seeking other types of loans, such as personal and auto. The companys websites also allow consumers to comparison shop for online degrees, repairmen and other products and services.
Tree.coms revenue from nonmortgage products grew to $5.8 million in the first quarter, up about 107 percent from $2.8 million the same quarter a year ago. The company continues to seek ways to diversify its revenues. Lebda said last month that he is considering offering matching services to lenders and small businesses.
During the quarter, a jury in Charlotte determined that patents used by LendingTree to protect its methods for matching borrowers with lenders are invalid, and competitors did not infringe on them. LendingTree sued the competitors in 2010. Lebda said Tuesday that LendingTree will appeal the decision.