The IAC said its second-quarter financial results showed it was putting pressure on several key parts of its business.
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IACs
The stock was excluded from Wednesday’s broad market rally after the internet and media holding company released its second-quarter results, signaling pressure on some key parts of its business. I was.
especially,
IACs
provided a cautious short-term outlook for
angie
,
The company’s Dotdash Meredith unit shows slowing ad sales, while the company’s majority-owned home services business is also shrinking.
angie
stocks plummeted.
For the quarter,
IACs
(Ticker: IAC) had revenue of $1.36 billion, up 64% from a year ago. That’s largely thanks to the company’s recently completed acquisition of magazine publisher Meredith, but it falls a little short of the Street consensus of $1.38 billion.
The IAC reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $37.4 million, up 42% from the year-ago quarter. IAC posted a loss of $869.1 million, or $10.02 per share, in the fourth quarter. This largely reflects the decline in the value of the company’s shares to casino operators.
MGM Resorts International
(MGM).
IAC owns about 16% of MGM, and its share price fell 30% in the quarter.
The Dotdash Meredith division, which publishes magazines and websites, reported a 568 percent increase in revenue to $490 million in the fourth quarter, reflecting the acquisition, according to the IAC.
angie
(ANGI) revenue increased 23% to $515.8 million. Search revenue increased 8% to $198.2 million, while Emerging & Other revenue increased 6% to $161.1 million. This includes 10% growth in Care.com and 68% growth on a combined basis from Bluecrew and Vivian Health.
IAC repurchased $59 million of its stock during the quarter. This is his first share buyback since 2018. The company officially changed its name to his IAC Inc. and eventually he abandoned the old legal name of IAC/InterActiveCorp.
IAC CEO Joey Levin said in an interview: Barons The company is on a “strong path” with Dotdash Meredith and continues to migrate the Meredith brand to the Dotdash digital platform. Traffic should pick up as the migration rolls out, he said.
“I feel so good about it,” he says. “We have the best brands and we will continue to gain market share.” It points out that it continues to move to the platform and the slowdown of the advertising environment.
According to Levin, display advertising prices are down about 5% to 10%. He said performance has held up better in marketing, but still says some companies are slowing spending. In the crypto space, for example, some providers have gone out of business or stopped spending to attract new accounts, he notes.
For Angi, Levin said the business grew “good” in the quarter, but slowed as the company shifted its focus to improving margins. He said the company continues to grow beyond the overall home services category. But he also notes that the company’s monthly metrics (both IAC and Angi regularly report monthly sales) slowed in his July. The main problem, he said, was in the roofing category, where the company raised prices too much.
The IAC reported that Dotdash Meredith’s pro forma revenue fell 20% year-over-year in July after declining 28% in June and 10% in May. Angi reports an 18% increase in service revenue this month, slowing from over 100% growth in each of the last five months. Overall, Angi’s revenue increased 10% in his July, down from 27% in June and 24% in May, according to the company.
Levin said there was no update on IPO plans for Turo, a car-sharing business in which IAC has a large stake. (Turo previously filed his S-1 privately for an initial public offering.)
He says there is nothing new to report on whether IAC will eventually spin off Angi’s stake. He noted that IAC is not yet ready to announce financial results for Care.com or other “upstart” businesses, and that it has no current plans to spin out Dotdash Meredith, but launch it as an independent company. said to be the ultimate goal. .
Asked if the company might buy back additional shares, he said the company is “always thinking about buybacks.”
IAC has a long history of buying and selling businesses, and valuations of potential targets are more attractive than before, Levin said. But he said private market valuations have lagged the public market reset. He says the opportunity lies in the open market, but adds that he thinks prices could get even more attractive from here.
IAC shares fell 4.6% to $74.42 on Wednesday while Angi fell 16.8% to $5.11.of
S&P 500
increased by 1.8%.
Write to Eric J. Savitz at eric.savitz@barrons.com.
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