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IAC/InterActiveCorp. topped earnings expectations for its latest quarter on Monday while matching expectations on revenue and promising a return to the “basics” this year.
The company generated a fourth-quarter net loss of $1.4 million, or 2 cents a share, whereas it generated net income of $13.0 million, or 14 cents a share, in the year-earlier quarter. Analysts tracked by FactSet were expecting a 55-cent loss per share on a GAAP basis.
IAC
IAC,
also reported adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $99.7 million, up from $3.5 million a year before, while the FactSet consensus was for $91.6 million.
Revenue rose to $1.25 billion from $1.16 billion, whereas analysts were projecting $1.26 billion.
Shares of IAC were up about 3% in after-hours trading Monday.
IAC saw its Dotdash Meredith media unit post $477.6 million in revenue, up from $252.4 million a year before, while analysts were looking for $490 million. The sharp growth in revenue for the segment largely reflects the acquisition of Meredith media brands, which closed in December 2021. Pro-forma sales fell 26% amid factors such as traffic declines to sites and softening consumer spending that impacted affiliate revenue.
“The ad market softened appreciably in November and December, as many brands froze their marketing spending in a season when budgets normally peak,” IAC Chief Executive Joey Levin said in a shareholder letter.
While the company doesn’t expect a major near-term recovery in the advertising market, it is hoping to “begin to grow digital revenue again in the second half of 2023” and drive improvements in traffic and monetization, according to Levin’s letter.
IAC has a majority economic interest in Angi Inc.
ANGI,
which generated $441.5 million in revenue during the fourth quarter, compared with $415.9 million a year before. The FactSet consensus was for $446 million in Angi revenue.
“I don’t regret the efforts we made over the last several years to access new markets and transform the homeowner experience – we need to take risks and try new things,” Levin said in the shareholder letter. “I only regret that, in the pursuit of those new opportunities, I believe we lost sight of some of the basics.”
He added that IAC would work to “rebuild those essential competencies over the course of 2023.” Angi is aiming to deliver an “intuitive customer experience,” improve search marketing and optimization, simplify its services offerings and operate on a lower cost base.
IAC’s search business saw revenue fall to $153.1 million from $280.3 million in the fourth quarter, while its emerging-and-other category witnessed a decline in revenue to $177.1 million from $211.4 million. Analysts were modeling $147 million in search revenue and $176 million in emerging and other revenue.
“We believe 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 in the shareholder letter. “We are analyzing new opportunities as both standalone companies and combinations with our existing companies.”
Specifically, he sees opportunities in “unloved public companies” that get minimal coverage or attention, “diamonds in the rough” that may have spent too much, and “small-ish private companies” that could face growing liquidity crunches this year.
For 2023, IAC anticipates $270 million to $400 million in total company adjusted Ebitda. The FactSet consensus was for $344 million.
