The soft advertising environment continues to weigh on financial results of
—but the internet and media holding company sees opportunities emerging from the recent tech downturn, and it is on the hunt.
For the December quarter, IAC (ticker: IAC) posted revenue of $1.25 billion, up 8% from a year earlier, and about in line with estimates. Adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, was $99.7 million, above consensus Street estimates at $92 million.
Under generally accepted accounting principles, IAC lost 2 cents a share in the quarter, while the Street had expected a loss of 28 cents. Keep in mind that IAC’s GAAP results are highly dependent on the shift valuation of its large stake in
(MGM), which make them largely impossible for the Street to accurately predict. That stake, with a current value of about $2.8 billion, accounts for about 60% of IAC’s current market cap of $4.6 billion.
IAC’s Dotdash Meredith unit, which includes a range of print and online publications, posted revenue of $260 million, down 26% on a pro forma basis, with digital revenue off 14% and print revenue 36% lower. In January, IAC cut staffing at Dotdash Meredith by 7%. Dotdash publications include familiar print brands, like People, Food & Wine and Travel & Leisure, and online brands, like Investopedia, The Spruce, and AllRecipes. In the December quarter, Dotdash Meredith suffered an operating loss of $8.8 million.
IAC said its publicly traded
(ANGI) home services unit had revenue of $442 million, slightly below consensus at $445 million, but up 6% from the year-earlier quarter. Angi posted a loss in the quarter off 11 cents a share; consensus estimates had called for a loss of four cents a share. Angi had a fourth-quarter operating loss of $60.4 million, contributing to IAC’s combined operating loss of $75.1 million.
Search revenue was $153 million, down 45%; “emerging and other” revenue was $177.1 million, down 16%.
IAC’s results in recent quarters have rarely provided surprises, since the company had adopted a policy of providing monthly financial updates on its various business segments. But the company discontinued the practice at the end of 2022, which could lead to more volatility starting with the March quarter results.
For 2023, the company is projecting adjusted Ebitda of $270 million to $400 million, with Dotdash Meredith providing $250 million to $300 million of the total, and Angi chipping in between $60 million and $100 million. Street consensus estimates had called for $344 million of combined adjusted Ebitda, including $291 million from Dotdash and $100 million from Angi.
In a letter to shareholders accompanying the earnings announcement, IAC CEO Joey Levin said the current environment “is attractive for deploying capital, because for the first time in a while, prices for growing companies with risk once again reflect an opportunity to create value when we get the thesis right.”
Levin said the company sees three main areas of opportunity: “unloved public companies,” like former SPACs and smaller IPOs; “diamonds in the rough,” where real value is hidden by “muddled” income statements; and “smallish” private companies that will face liquidity challenges this year.
In late trading Monday, IAC shares are 3.5% higher at $53.
Write to Eric J. Savitz at email@example.com