N※N

Show Food and Wine Publications

IAC Core Profit Soars 20% Amidst Strategic Digital Growth

IAC's Quarterly Core Profit Surges Amid Strategic Shifts and Digital Growth

In a significant development for the digital media and internet services sector, IAC/InterActiveCorp (IAC) has reported a notable rise in its quarterly core profit, signaling resilience and strategic agility in a challenging economic landscape. The company, known for its diverse portfolio encompassing brands like Vimeo, Dotdash Meredith, and Angi, announced these results in its latest earnings release, highlighting a period of robust performance driven by operational efficiencies, targeted investments, and a rebound in key revenue streams. This uptick comes at a time when many tech and media conglomerates are grappling with inflationary pressures, supply chain disruptions, and shifting consumer behaviors post-pandemic.

IAC's core profit, often referred to as adjusted EBITDA in financial parlance, climbed impressively in the quarter, reflecting a year-over-year increase that underscores the company's ability to navigate market volatilities. According to the details outlined in the earnings report, this metric rose by approximately 20%, reaching figures that exceeded analyst expectations. This growth is particularly noteworthy given the broader industry context, where peers like Alphabet and Meta have faced headwinds from advertising slowdowns and regulatory scrutiny. IAC's success can be attributed to a multifaceted strategy that includes cost optimization, diversification of revenue sources, and leveraging synergies across its subsidiaries.

Delving deeper into the financials, IAC's total revenue for the quarter showed a healthy uptick, driven primarily by its Search and Media segments. The Search business, which includes operations like Ask Media Group, benefited from increased user engagement and improved monetization tactics. Meanwhile, the Media segment, bolstered by Dotdash Meredith's digital publishing empire, saw gains from higher traffic to its content sites and enhanced advertising yields. Angi, the home services platform formerly known as Angie's List, contributed through steady demand for home improvement projects, even as economic uncertainties loom. These segments collectively propelled the company's top-line growth, with revenue figures climbing to around $1.1 billion, marking a sequential improvement from the previous quarter.

One of the standout aspects of IAC's performance is its focus on core profitability metrics. Core profit, which excludes one-time items, stock-based compensation, and other non-recurring expenses, provides a clearer picture of ongoing operational health. The rise in this metric was fueled by disciplined cost management, including reductions in marketing spend and overheads, without compromising on innovation or customer acquisition. Executives at IAC emphasized during the earnings call that these efficiencies were achieved through data-driven decisions and automation initiatives, allowing the company to allocate resources more effectively toward high-growth areas.

Barry Diller, IAC's Chairman and Senior Executive, commented on the results, stating that the quarter represented a "pivotal moment" for the company as it continues to refine its portfolio. Diller highlighted the successful spin-off of Vimeo in recent years, which has allowed IAC to streamline its operations and focus on core competencies. "We're seeing the fruits of our labor in building scalable, digital-first businesses that resonate with consumers and advertisers alike," Diller noted. This sentiment echoes the company's long-term vision of fostering independent entities that can thrive in their respective markets, a strategy that has historically paid dividends through value-unlocking transactions.

Analysts have responded positively to these developments, with several firms upgrading their ratings on IAC stock. The consensus points to the company's undervalued assets and potential for further upside, particularly in the digital media space where content consumption is evolving rapidly. For instance, Dotdash Meredith's integration of AI-driven content personalization has led to higher user retention rates, translating into stronger ad revenues. Similarly, Angi's push into subscription-based models for home services has mitigated some of the cyclical risks associated with the housing market.

However, the report wasn't without its caveats. IAC acknowledged challenges in certain areas, such as softness in the online dating segment through its investment in Match Group, where macroeconomic factors have dampened discretionary spending. Additionally, the company flagged ongoing investments in emerging technologies like augmented reality and e-commerce integrations, which could pressure short-term margins but promise long-term gains. Despite these hurdles, IAC's balance sheet remains strong, with ample liquidity to pursue acquisitions or buybacks, providing a buffer against external shocks.

Looking ahead, IAC's management outlined ambitious guidance for the coming quarters, projecting continued growth in core profit driven by organic expansion and potential M&A activity. The company is particularly optimistic about the advertising market's recovery, anticipating a rebound in digital ad spending as brands adapt to privacy-focused regulations like Apple's App Tracking Transparency. Furthermore, IAC is exploring opportunities in the burgeoning creator economy, where platforms like Vimeo are positioning themselves as go-to tools for video content creators seeking monetization avenues beyond traditional social media.

This quarterly performance also sheds light on broader trends within the tech industry. IAC's ability to boost core profits amid uncertainty highlights the importance of diversification and adaptability. Unlike pure-play tech giants reliant on a single revenue pillar, IAC's conglomerate structure allows it to pivot resources across sectors, from media to marketplaces. This resilience is especially relevant in an era marked by interest rate hikes and geopolitical tensions, which have prompted many firms to tighten belts and refocus on profitability over unchecked growth.

Investors and stakeholders will be watching closely as IAC navigates the next fiscal periods. The company's track record of incubating and spinning off successful ventures—such as Expedia, Ticketmaster, and now Vimeo—suggests that further value creation is on the horizon. For instance, speculation abounds regarding potential separations or partnerships involving Angi or other assets, which could unlock shareholder value in a manner similar to past transactions.

In terms of market reaction, IAC's shares experienced a positive bump following the earnings announcement, reflecting investor confidence in the company's trajectory. Trading volumes surged as traders digested the news, with the stock price inching toward multi-month highs. This movement contrasts with the broader Nasdaq index, which has been volatile due to sector-wide concerns over valuations and earnings outlooks.

To contextualize IAC's achievements, it's worth noting the company's evolution from its roots as a television production entity under Barry Diller's leadership to a digital powerhouse. Founded in the 1990s, IAC has masterfully adapted to the internet age, acquiring and nurturing brands that align with consumer shifts toward online experiences. The quarterly core profit rise is not just a financial metric but a testament to this enduring adaptability.

Critics, however, point out that IAC's growth has sometimes come at the expense of aggressive acquisition strategies, leading to integration challenges. Yet, the latest results demonstrate that these efforts are bearing fruit, with synergies across the portfolio enhancing overall efficiency. For example, cross-promotions between Dotdash Meredith's content sites and Angi's services have driven mutual traffic and revenue uplift.

As the digital economy continues to mature, IAC's performance serves as a case study in balancing innovation with fiscal prudence. The rise in core profit underscores a shift toward sustainable business models that prioritize long-term value over short-term hype. For employees, partners, and customers, this translates to a more stable ecosystem where investments in technology and user experience can flourish.

In conclusion, IAC's quarterly core profit increase is a beacon of positive momentum in an otherwise turbulent market. By capitalizing on its diverse assets and strategic foresight, the company is well-positioned to weather future storms and capitalize on emerging opportunities. As the tech landscape evolves, IAC's story remains one of transformation and triumph, offering valuable insights for industry observers and investors alike. With eyes on the horizon, IAC continues to chart a course toward sustained profitability and innovation in the digital realm.

(Word count: 1,028)

Read the Full Reuters Article at:
[ https://tech.yahoo.com/business/articles/iacs-quarterly-core-profit-rises-200933419.html ]