Ryan Tomasello: Great. Thanks, guys.
Operator: Thank you. One moment for our next question, please. Our next question comes from the line of John Campbell, with Stephens. Your line is now open.
John Campbell : Hey, guys. Good morning. Hey, for insurance. I want to touch back on Ryan’s question there, just based on the channel commentary. Does — I mean it feels like the arrows are certainly pointing in the right direction for recovery next year. But just on the segment VMM outlook, I’m thinking maybe we should think about it like a seesaw effect, maybe next year, like you get the revenue rebound and the VMM margin comes back in a bit or alternatively rev remains somewhat sluggish, and then VMM kind of stays at current levels. Is that generally the right way to think about it for next year?
Doug Lebda: I’m going to let these other guys comment too. But the way I like to think about it is, is in VMD, not as support not as much on the percentage. And as your demand kicks in, you’re able to go obviously advertise while your cost of acquisition might go up a tad as you know, let’s just keep it simple bid higher in search terms. That obviously might crimp a percentage margin, but it would drive a lot more dollars. Trent? Scott?
Scott Peyree: Yes, I’ll jump in quick to and I echo what Doug says, I mean what we look, we look at total VMD. So as your client budgets are significantly increasing, as you’re spinning into more traffic, your VMM margins will typically come down, but your overall VMD will go up pretty significantly. And so, when we’re limited budget environments, it’s easy to target the types of traffic, the high quality traffic is with clients who want to make good margin off it, as the budgets move more towards that what you would call like, you know, an unlimited budget at like CPA targets for clients. That’s where you’re more aggressively spending in the areas trying to generate revenue and traffic, but oftentimes lower VMM margins, but higher overall VMD.
John Campbell: Okay, that makes sense. Appreciate that. And then, to what extent do you guys can — I’m hoping maybe you could run us through the strategic shifts and credit card, while you’re looking to partner how that partnership, economics work, maybe just at a high level? And then what do you think that could appear a partnership can do for the business in the years ahead?
Doug Lebda: Scott?
Scott Peyree: Yes, I would say, with this partnership — what I’m really excited about the partnership with third party bureau in being is the consumer’s ability to get credit card for subprime and year prime cards. And from a business perspective, that’s probably the most significant impact this will have is where a lot of our card presentation right now on our sites focus on more prime consumers, which, which throws out you know, a lot of consumers that don’t qualify for those cards. So now by doing this partnership, and bringing more options that consumers and allows us to onboard a lot more issuers, it make for a very smooth and easy process for those consumers to get preapproved for those cars that that wouldn’t be otherwise a little nervous about filling out a full application on a card.
So a lot, a lot more consumer choice means for every 100 consumers coming through the site, you’re finding a solution for a lot more of them than we are today. And that’s where I think, again, getting that marketing flywheel will help us increase traffic a lot there.
John Campbell: Okay, make sense to me. Thanks, guys.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Chris Kennedy, with William Blair. Your line is now open.
Chris Kennedy : Good morning. Thanks for taking the questions. Doug, you’ve seen a lot of cycles in this business over time, can you just talk about your competitive position today relative to prior cycles, and as the markets, improve, talk about the earnings power of the business?
Doug Lebda: So I think our position is better in this one, as if it were not for the debt that we — the debt refinancing that we’re facing, I would say we’re in a much stronger position. And in the past, several cycles that I’ve been to really that I’ve been through this, your monetization went down, we did not have the balance sheet that we had. We were getting — we were — and most importantly, we were concentrated in like 95% mortgage. This business with the diversification that we’ve pulled off, certainly at a cost has enabled us to weather the mortgage downturn, and then you can — whether the personal loan downturn. This is the first time that I’ve experienced, where literally everything is pulled back at once in every category, and we’ve still been able to make a good amount of money.
And that’s what I think differentiates this one from all the others. From a competitive standpoint, I would only add that there’s fewer competitors today the LendingTree brand name is obviously very well known. And we got to improve our product that we bring to consumers but that is underway. I’m thrilled the TreeQual that’s finally made it out of the gates after talking to you all about it for the last couple of years. And it’s going to be a knife fight among some other competitors, but we’re up for it and ready.
Chris Kennedy: Got it. Thank you. And then just can you talk about the margin profile, you’ve taken a lot of expenses out of the business and as the macro improves, kind of talk about the long term margin profile? Thank you.
Trent Ziegler: Yes, Chris, this is Trent. I’ll hit on that one. Yes, look, I mean, obviously, you’ve seen us take margins from mid to high teens EBITDA margin to mid-teens. — I’m sorry, mid to high single digits to mid-teens, just over the course of the last year or so. I think as we’ve unpacked our cost structure and continue to chip away at it, right, we’ve done a lot of really good work. And as we sit here today, we feel like we are still perfectly well resourced to continue to run this business and place a few focus bets, right, we’re not strapped for resourcing in such a way that we can’t continue to innovate and drive product improvement, we’re adequately staffed for that. And as the macro continues to improve, there’s not a lot of variable expense that we have to layer on top, right. And so we feel really good about our ability to maintain and improve upon kind of that mid-teens EBIT margin profile that you’re seeing today.
Chris Kennedy: Thanks for taking the questions.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Youssef Squali, with Truist Securities, your line is now open.
Youssef Squali : Awesome, thank you so much. So a question for Doug and for Trent. So, Doug, just as you look at the potential turnaround in 2024 across the businesses, maybe what early indicators are you tracking to identify the reversion, maybe in underwriting standards by lenders across both the consumer segment and home segment, not as much insurance, I think you’ve discussed that. And then Trent, can you just help us think through the Q4 guide and what’s implied across growth across the three segments, home, consumer and insurance please?
