IAC, a prominent internet and media holding company, is making progress in its efforts to revitalize its two main business units: Angi, a home services provider, and Dotdash Meredith, a publisher of niche print and web content. While there is still work to be done, IAC is optimistic about the future.
Q3 Revenue Results
In the third quarter, IAC reported a revenue of $1.11 billion, showing a 15% decline compared to the previous year. However, this result aligned with the Wall Street consensus as tracked by FactSet. Notably, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter was $100.4 million, which marks an impressive 83% increase from the previous year. This figure also exceeded the Street’s consensus estimate of $83 million.
Net Loss Reflecting Noncash Mark-to-Market Adjustment
IAC experienced a net loss of $390.5 million (or $4.72 per share) in the quarter. This loss was primarily attributable to a noncash adjustment of $463 million related to the marking-to-market of IAC’s stake in MGM Resorts International, a casino gaming company.
Dotdash Meredith Performance
Dotdash Meredith, which comprises renowned publications like People, Food & Wine, and Investopedia, generated $418 million in revenue during the quarter. This figure represents an 11% decrease compared to the previous year but exceeded consensus estimates. Notably, search revenue for Dotdash Meredith increased by 6% to $166 million, surpassing Street expectations. Revenue from the “emerging and other” category amounted to $158 million, marking a 12% decline.
Angi’s Revenue Performance
Angi, although publicly traded, is majority-owned by IAC. The company reported a revenue of $372 million in the quarter, showcasing a 25% decrease. While this figure slightly fell short of consensus estimates ($374 million), IAC remains hopeful about Angi’s future prospects.
Despite facing challenges, IAC remains committed to implementing its turnaround strategies and is optimistic about the growth potential of Angi and Dotdash Meredith.
A Letter to Shareholders: Reflecting on Progress and Future Plans
In a recent letter to shareholders, Joey Levin, the CEO of IAC, discussed the significant changes made over the past year. He stepped in as CEO of Angi, and expectations at Dotdash Meredith were reset to adapt to the challenges brought on by a large integration and a slowing advertising market.
Delivering on Our Promises
Despite the tough adjustments made at our two largest businesses, Levin expressed satisfaction with the progress made since then. He stated, “We’ve generally delivered what we said.”
Angi: A Bet with High Risk and Reward
Levin identified Angi as the highest risk-to-reward bet in the IAC portfolio. This quarter, adjusted Ebitda for Angi grew by an impressive 13%. The company is currently in the process of transforming its business model from a lead generator to a category-leading marketplace. In line with their positive outlook, Angi plans to buy back 14 million shares. Levin emphasized that this decision is supported by the progress witnessed and current trading prices.
Dotdash Meredith: Reversing the Slide
Levin also highlighted the remarkable growth of adjusted Ebitda for Dotdash Meredith, which saw a staggering increase of 37% in the quarter. This excludes some one-time charges from the previous year. He confidently stated, “We’ve stopped the slide” in the company’s digital business and expressed his belief that there will be no further declines. The value of the merger with Meredith is finally coming to life, reflecting the positive outcome of a long integration journey.
Revised Forecast and Outlook
Looking ahead, IAC now anticipates full-year adjusted Ebitda, excluding certain items, to range between $330 million and $370 million. This range has been narrowed from the previous forecast of $320 million to $440 million. Additionally, the company now expects a full-year operating loss between $170 million and $240 million, narrowing from the previous forecast range of $80 million to $260 million.
In conclusion, Levin’s letter to shareholders showcases the progress made at Angi and Dotdash Meredith while outlining the company’s revised financial outlook. As IAC continues to navigate the dynamic market landscape, the focus remains on delivering results and exploring opportunities for growth.
IAC Shares and Angi Performance
IAC, a prominent company, has experienced a minimal increase of less than 1% in its shares since the beginning of the year. On the other hand, Angi, a subsidiary of IAC, has seen a substantial decline of 27% in its performance.
It is evident that IAC’s shares have struggled to gain significant momentum in the market thus far. Despite various efforts and strategies, the company has only managed to achieve a marginal growth rate. However, it is crucial to note that this percentage reflects the year-to-date performance and does not provide a comprehensive picture of the company’s overall trajectory.
In contrast, Angi, a subsidiary of IAC, has faced more significant challenges. With a notable downturn of 27% in its performance, Angi’s shares have experienced a considerable decrease in value. This downward trend indicates potential issues or market conditions that have negatively impacted Angi’s operations.
As both IAC and Angi continue to navigate the complexities of the market, it is essential for investors and stakeholders to closely monitor their respective performance trends. Understanding the factors influencing the fluctuation in share prices will provide valuable insights into the future trajectory of these companies.