Tree.com, the parent of LendingTree, increased fourth-quarter revenue by more than half from a year earlier, to $36.4 million, a feat the company credited to strategy changes and new products.
Revenue from mortgage products increased 49% despite market headwinds that caused a 47% decline of total mortgage market originations during this time. During the fourth quarter, consumer demand tends to drop and advertising becomes more costly, said Doug Lebda, chairman and chief executive officer of Tree.com, but the company beat its guidance on all metrics.
Purchase mortgage products offered through LendingTree.com continued to grow during the quarter, increasing revenue from this line by nearly 200%.
"Proactive and ongoing enhancements" to the LendingTree.com platform drove purchase loan revenue growth, according to a company release.
Additionally, "our diversification strategy" helped generate high revenue from non-mortgage marketing products, Lebda explained.
As mortgage originations continue to decline significantly, performance-based marketing services are taking on greater importance for lenders, according to Lebda.
For example, in the fourth quarter, one-third of the existing Tree.com clients spent at least 20% more compared to the third quarter, he said. "And as mortgage originations continued to contract, we saw improved monetization of our leads."
Revenue from ancillary products also logged a significant increase of 112%, to $5.2 million, which Lebda attributed to the launch of new products including the LoanExplorer "rate table" marketplace, reverse mortgages and personal loans.