INCOME TAXES

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income Tax Provision

The components of the income tax expense (benefit) are as follows (in thousands):

	Year Ended December 31,
	2025		2024		2023
Current income tax (benefit) expense:
Federal	$	104	$	587	$	1,155
State	(637)		940		1,022
Current income tax (benefit) expense	(533)		1,527		2,177
Deferred income tax (benefit) expense:
Federal	(100,510)		947		(3,383)
State	(29,241)		1,846		(1,309)
Deferred income tax (benefit) expense	(129,751)		2,793		(4,692)
Income tax (benefit) expense	$	(130,284)	$	4,320	$	(2,515)

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2—Significant Accounting Policies, the reconciliation of the income tax expense (benefit) to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes is shown as follows (in thousands, except for percentages):

	Year Ended December 31,
	2025
Federal statutory income tax	$	4,415	21.0	%
State and local income taxes, net of federal effect	(23,711)		(112.8)	%
Foreign tax effects	57		0.3	%
Effect of cross-border tax laws:
Global intangible low-taxed income inclusion	420		2.0	%
Tax credits:
Research and experimentation tax credit	(1,547)		(7.4)	%
Increase (decrease) in valuation allowance	(114,973)		(546.9)	%
Nontaxable or nondeductible items:
Nondeductible executive compensation	3,562		16.9	%
Excess tax deductions on non-cash compensation	799		3.8	%
Other nontaxable or nondeductible	359		1.7	%
Changes in unrecognized tax benefits	232		1.1	%
Other, net	103		0.5	%
Income tax expense (benefit)	$	(130,284)	(619.7)	%

State and local income taxes, net of federal benefit decreased the effective tax rate by 112.8% for the year ended December 31, 2025. The decrease was primarily due to the releases of valuation allowances against deferred tax assets in multiple state jurisdictions where the Company concluded it is more likely than not that certain deferred tax assets will be realized. Valuation allowances remain in place where realization of deferred tax assets is not considered more likely than not. The most significant impacts related to California and Illinois, which together represented more than 50% of the total state tax benefit. The remaining decrease was attributable to a combination of several other state jurisdictions.

The reconciliation of the income tax expense (benefit) to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in thousands):

	Year Ended December 31,
	2024		2023
Federal statutory income tax	$	(7,851)	$	(26,233)
State income taxes, net	(502)		(2,883)
Excess tax deductions on non-cash compensation	3,633		6,373
Research and experimentation tax credit	(1,500)		(1,512)
Nondeductible executive compensation	3,245		2,174
Increase (decrease) in valuation allowance	5,045		17,087
Remeasurement of state deferred tax	776		73
Expiration of state net operating loss carryforwards	535		595
Global intangible low-taxed income inclusion	420		420
Other, net	519		1,391
Income tax expense (benefit)	$	4,320	$	(2,515)

Deferred Income Taxes

The tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows (in thousands):

	December 31,
	2025		2024
Deferred tax assets:
Provision for accrued expenses	$	4,303	$	1,541
Leasing	11,991		19,053
Net operating loss carryforwards (a)	45,032		38,746
Capitalized research and experimentation	16,577		35,861
Non-cash compensation expense(b)	22,931		23,953
Property and equipment	1,985		833
Intangible assets	—		1,882
Interest	24,641		22,422
Equity investment	16,538		19,659
Tax credits	16,995		15,522
Other	61		71
Total gross deferred tax assets	161,054		179,543
Less: valuation allowance (c)	(18,008)		(167,549)
Total deferred tax assets, net of the valuation allowance	143,046		11,994
Deferred tax liabilities:
Leasing	(10,080)		(16,379)
Intangible and other assets	(7,617)		—
Prepaid expenses	(482)		(484)
Other	—		(15)
Total gross deferred tax liabilities	(18,179)		(16,878)
Net deferred taxes	$	124,867	$	(4,884)

(a)At December 31, 2025, the Company had pre-tax consolidated federal net operating losses (“NOLs”) of $148.8 million. The federal NOLs no longer expire under the Tax Cuts and Jobs Act. The Company's NOLs will be available to offset taxable income, subject to the Internal Revenue Code Section 382 annual limitation. In addition, the Company has state NOLs of approximately $423.1 million at December 31, 2025, a portion of which will expire at various times between 2026 and 2055.

(b)Certain out-of-the-money stock options are expected to expire unexercised, and as a result may be required to reverse the related deferred tax asset for share-based compensation, which could increase income tax expense and our effective tax rate in a future period.

(c)The valuation allowance is related to items for which it is “more likely than not” that the tax benefit will not be realized.

Deferred income taxes are presented in the accompanying consolidated balance sheets as follows (in thousands):

	December 31,
	2025		2024
Deferred income tax assets	$	124,867	$	—
Deferred income tax liabilities	—		(4,884)
Net deferred taxes	$	124,867	$	(4,884)

Valuation Allowance

A valuation allowance is provided on deferred tax assets if it is determined that it is “more likely than not” that the deferred tax asset will not be realized. As of each reporting date, management considers both positive and negative evidence regarding the likelihood of future realization of the deferred tax assets.

During 2025, the Company recorded a tax benefit of $149.5 million to reduce the valuation allowance the Company established in 2022 against its net deferred tax assets. Management determined upon review of the deferred tax assets for recoverability that sufficient positive evidence existed to conclude a substantial portion of the valuation allowance was no longer needed. Based on sustained profitability, improved forecasts of future taxable income, and the reversal of existing temporary differences, management concluded that it is more likely than not that we will be able to utilize the deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company maintains a valuation allowance of $18.0 million primarily related to certain states for which it estimates the net operating losses will expire prior to being utilized and other deferred tax assets related to equity investments for which it is not more likely than not that the deferred tax assets will be realized. In determining the amount of the remaining valuation allowance, the Company considered the scheduled reversal of deferred tax liabilities. Should there be a change in the valuation allowance in the future, the income tax provision would increase or decrease in the period in which the allowance is changed.

A reconciliation of the beginning and ending balances of the deferred tax valuation allowance is as follows (in thousands):

	Year Ended December 31,
	2025		2024		2023
Balance, beginning of the period	$	167,549	$	162,504	$	145,401
Charges to earnings	(149,541)		5,045		17,103
Balance, end of the period	$	18,008	$	167,549	$	162,504

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):

	Year Ended December 31,
	2025		2024
Balance, beginning of the period	$	3,721	$	3,424
Additions based on tax positions of the current period	225		225
Additions (subtractions) based on tax positions of the prior period	7		72
Balance, end of the period	$	3,953	$	3,721

Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense. Interest and penalties on unrecognized tax benefits included in income tax expense of an immaterial amount has been recognized for the tax years ended December 31, 2024 and 2023. For the year ended December 31, 2025 interest is not currently required to be recorded, as there have been no tax attributes included in income tax returns filed for those tax periods to require consideration of interest expense.

As of December 31, 2025 and 2024, the accrual for unrecognized tax benefits, including interest, was $4.0 million and $3.7 million, respectively, which would benefit the effective tax rate if recognized.

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2—Significant Accounting Policies, cash paid for income taxes, net of refunds, during the year ended December 31, 2025 was as follows (in thousands):

Federal	$	305
Illinois	780
Other U.S. state and local	314
Foreign - India	135
Total income taxes paid, net of refunds received	$	1,534

Tax Audits

LendingTree is subject to audits by federal, state and local authorities in the area of income tax. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns; however, any amounts paid upon resolution of issues raised may differ from the amount provided. Differences between the reserves for tax contingencies and the amounts owed by the Company are recorded in the period they become known. As of December 31, 2025, the Company is subject to a federal income tax examination for the tax years 2015 through 2024. In addition, the Company is subject to state and local tax examinations for the tax years 2020 through 2024.