IAC has announced its financial results for the second quarter, revealing a decline in revenue due to weakened advertising sales. The company is currently focused on revitalizing its Dotdash Meredith publishing segment and Angi, the home-repair services marketplace.
Declining Revenue and Narrowed Losses
In the second quarter, IAC, an internet and media holding company (ticker: IAC), generated $1.11 billion in revenue, representing an 18% decrease compared to the previous year. Although slightly below the Street consensus estimate of $1.12 billion, the company reported a narrower loss than expected, with an adjusted result before interest, taxes, depreciation, and amortization of $70.2 million, compared to the forecasted loss of $73 million. Consequently, IAC incurred a loss of $1.07 per share, exceeding the Street consensus forecast of a loss of 73 cents.
Decline in Dotdash Meredith Revenue
Dotdash Meredith, consisting of media brands such as People, Investopedia, Simply Recipes, and more, experienced a decline in revenue to $414 million, down 15% from the previous year. This fell short of analysts’ expectations, which had projected $420 million in revenue. Dotdash digital revenue saw a 10% decrease compared to the prior year, while print revenue faced a substantial decline of 21%. Both segments were negatively impacted by a weakened advertising market, especially within the entertainment and finance sectors.
Angi’s Decreased Revenue and Adjusted Earnings
Angi (ANGI), primarily owned by IAC and publicly traded, observed a revenue of $375.1 million, marking a 27% decrease from the previous year’s figures. This result fell below the Street’s outlook of $403 million. Angi incurred a loss of three cents per share in the quarter, wider than the expected loss by a penny. The adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) totaled $18.3 million, which failed to meet the consensus forecast of $30 million.
Overall, IAC’s financial performance was impacted by weakened advertising sales across both its Dotdash Meredith publishing segment and Angi. However, the company remains focused on revitalizing these divisions and improving its future prospects.
IAC Reports Revenue Figures for Search and “Emerging and Other” Businesses
IAC, a leading internet company, recently announced its revenue figures for the search business and its “emerging and other” businesses, including Care.com. Despite facing challenges in the market, the company managed to achieve impressive results.
Search Business Revenue
The search business of IAC generated a revenue of $177 million, which is a decrease of 11% compared to the previous year. However, this figure surpassed the consensus estimate of $153 million, showing promising performance in this segment.
“Emerging and Other” Businesses
The “emerging and other” businesses, which include Care.com, recorded a revenue of $147.9 million. Although there was an 8% decline in revenue, it fell slightly short of the consensus call for $150 million.
Shareholder Letter Highlights Successes
In a letter addressed to the shareholders, IAC’s CEO, Joey Levin, emphasized the company’s achievements and highlighted some significant developments.
Stock Buyback
Levin mentioned that IAC repurchased $165 million worth of stock between February and May. This buyback was executed at an average price of less than $51, significantly lower than the current market price of around $66. This strategic move demonstrates the company’s confidence in its future prospects.
Improved Profit Margins and Earnings Growth
Levin proudly stated that IAC achieved solid improvement in profit margins and earnings growth. Both Dotdash and Angi, divisions of IAC, reported smaller losses in the quarter compared to the same period last year.
Digital Revenue Growth
Levin revealed that Dotdash Meredith achieved a commendable 1% digital revenue growth in June. This success indicates the company’s ability to adapt and thrive in the digital landscape.
Quality Improvement Efforts
While Angi experienced a larger-than-expected decline in revenue, Levin contextualized it as a positive outcome. He emphasized that the lost revenue was mostly from low-value sources that the company consciously eliminated. By taking specific actions to improve the quality of service, IAC aims to enhance customer satisfaction.
Encouraging Progress
Levin concluded by stating that IAC is still far from achieving its aspirational future steady state at Angi and Dotdash Meredith. However, he expressed satisfaction with the progress made so far, underscoring the positive evidence of growth.
Future Outlook
IAC maintains a positive outlook for the rest of 2023, with an expected adjusted Ebitda between $320 million and $440 million. This range surpasses the consensus estimate of $337 million, indicating optimism for continued success. Additionally, the company’s management predicts an operating loss between $80 million and $260 million, showcasing improvements from the previous forecast of a loss between $90 million and $270 million.
IAC Stock Performance
In terms of stock performance, IAC shares have seen a significant increase of approximately 49% in the year-to-date period. This positive growth reflects investor confidence in the company’s future prospects.