IAC(US:IAC)2025-11-03 21:14Revenue Performance - Total revenue for the three months ended September 30, 2025, was $589.8 million, a decrease of 8% compared to $642.0 million in the same period of 2024[171]. - Digital revenue for People Inc. increased by 9% to $269.0 million in Q3 2025, up from $246.4 million in Q3 2024[171]. - Print revenue for People Inc. decreased by 15% to $169.0 million in Q3 2025, down from $198.5 million in Q3 2024[171]. - Care.com revenue decreased by 5% to $90.8 million in Q3 2025, compared to $95.7 million in Q3 2024[171]. - Search revenue decreased significantly by 41% to $51.9 million in Q3 2025, down from $88.3 million in Q3 2024[171]. - Total revenue for the nine months ended September 30, 2025, was $1.747 billion, an 8% decrease from $1.901 billion in the same period of 2024[171]. - People Inc. revenue decreased by $9.6 million, or 2%, to $429.8 million, with a 15% decline in Print revenue offset by an 8% increase in Digital revenue[172]. - Emerging & Other revenue decreased by $21.0 million, or 29%, to $51.5 million, impacted by the sale of Mosaic Group assets and declines from IAC Films and Vivian Health[174]. Expense and Cost Management - Cost of revenue for the nine months ended September 30, 2025, decreased by $141.2 million, or 19%, compared to the prior year, with a 15% decrease in cost of revenue for the three months ended September 30, 2025[173]. - Selling and marketing expenses increased by $5.6 million, or 3%, to $188.4 million for the three months ended September 30, 2025, driven by increased spending in Search and Care.com[177]. - General and administrative expenses for Q3 2025 were $132.4 million, an increase of $23.6 million (22%) compared to Q3 2024, and represented 22% of revenue[182]. - For the nine months ended September 30, 2025, general and administrative expenses decreased by $49.7 million (14%) to $362.3 million compared to the same period in 2024[182]. - Product development expenses for Q3 2025 were $49.5 million, a decrease of $4.5 million (8%) from Q3 2024, and represented 8% of revenue[186]. - For the nine months ended September 30, 2025, product development expenses decreased by $21.0 million (12%) to $170.6 million compared to the same period in 2024[186]. Profitability and Income - Operating income for Q3 2025 was a loss of $20.4 million, a decrease of $28.5 million compared to an operating income of $8.1 million in Q3 2024[194]. - Total operating income for People Inc. was $106,519,000, with adjusted EBITDA of $214,878,000 for the nine months ended September 30, 2025[224]. - Adjusted EBITDA for People Inc. decreased 5% to $65.0 million for the three months ended September 30, 2025, driven by declines in Print and Digital segments, while Adjusted EBITDA for the nine months increased 30% to $214.9 million[200][198]. - Care.com Adjusted EBITDA decreased 57% to $7.8 million for the three months ended September 30, 2025, primarily due to lower revenue and an impairment charge[200]. - The Corporate segment reported an operating loss of $35.0 million for Q3 2025, an increase of $6.3 million (22%) compared to Q3 2024[194]. Cash Flow and Debt Management - Cash and cash equivalents for People Inc. increased to $280,370,000 from $249,927,000 as of December 31, 2024[228]. - Total long-term debt decreased slightly to $1,445,625,000 from $1,480,000,000[228]. - Net cash provided by operating activities attributable to continuing operations was $27,457,000, a decrease from $124,225,000 in the prior year[229]. - Net cash used in investing activities was $371,161,000, primarily related to the Distribution and capital expenditures[232]. - Net cash used in financing activities totaled $419,134,000, including principal payments on Term Loans of $1.4 billion[233]. - The Company recorded positive cash flows from operating activities of $27.5 million for the nine months ended September 30, 2025, but generated negative cash flows of $29.6 million excluding People Inc.[244]. Taxation and Earnings - The effective income tax rate for Q3 2025 was 56%, significantly higher than the statutory rate of 21%, primarily due to non-deductible compensation expenses and state taxes[210]. - For the nine months ended September 30, 2025, the effective income tax rate was also elevated at 51%, influenced by non-taxable stock-based compensation and state taxes[210]. - The income tax benefit for Q3 2025 was $27,259 thousand, a decrease of 68% from $86,169 thousand in Q3 2024[210][222]. - Net loss attributable to IAC shareholders for Q3 2025 was $(21,879) thousand, compared to a net loss of $(243,719) thousand in Q3 2024[222][223]. Investments and Future Outlook - The company reported an unrealized loss on investment in MGM of $346.3 million for the three months ended September 30, 2025, compared to a gain of $363.7 million in the same period of 2024[203]. - The Company owns approximately 23.8% of MGM based on the number of common shares outstanding as of September 30, 2025[205]. - The Company expects to need additional capital through future debt or equity financing to refinance its existing capital structure and make acquisitions[248]. - The Company anticipates capital expenditures for 2025 to be approximately 55% to 60% higher than the $15.0 million spent in 2024, driven by increased capitalized software and leasehold improvements[243].