Core Insights - TDS has transitioned from a significant loss to profitability, indicating operational stabilization after years of volatility [10] - Silver Point Capital has reduced its stake in TDS, selling 1.3 million shares, which reflects a decrease in the fund's exposure to the company [2][11] Company Overview - TDS reported a total revenue of $4.9 billion and a net income of -$143.2 million for the trailing twelve months (TTM) [4] - The company has a dividend yield of 0.4% and its stock price was $39.41 as of the latest report [4] Recent Performance - In the third quarter, TDS generated $308.5 million in revenue, a 6% decrease year-over-year, but achieved a net income of $40.2 million, recovering from a $100.4 million loss in the prior year [12] - The company has initiated a share repurchase program, buying back over 1 million shares and approving a new $500 million buyback authorization, signaling management's confidence in its fiber-first strategy [12] Market Position - TDS operates as a leading U.S. telecommunications provider, offering a diversified portfolio that includes wireless, broadband, and managed services [6][9] - The company serves a wide range of customers, including individual consumers, businesses, and government entities, focusing on integrated connectivity solutions [6][9] Investment Implications - The reduction of Silver Point Capital's stake in TDS, now representing 2.4% of the fund's reportable assets under management (AUM), places TDS outside the fund's top five holdings [3][11] - Despite the recent profitability, TDS's stock remains discounted compared to its mid-2000s highs, which may influence long-term investor sentiment [10]

Financial Data and Key Metrics Changes - Q1 2025 was described as a solid start to the year, with IAC reaffirming full year 2025 adjusted EBITDA guidance across all businesses [5][16] - DDM grew digital revenues by 7% in Q1 and increased EBITDA by 46%, excluding a one-time lease gain [7][16] - The company repurchased 4,500,000 shares and increased share repurchase authorization by 10,000,000 shares [5][11] Business Line Data and Key Metrics Changes - DDM's licensing revenue grew by 30%, driven by the OpenAI license and strong performance at Apple News [34] - Performance marketing also showed strong growth at 11% [34] - The Daily Beast achieved a revenue growth of 72% while reaching profitability [8] Market Data and Key Metrics Changes - Core traffic for DDM declined by 3% in Q1, with digital advertising only up by 1% due to fewer impressions available for programmatic sales [33] - Premium demand in advertising remained stable, with strength in pharma, tech, and beauty offsetting weaknesses in food and beverage [15][33] - Programmatic pricing softened, running flat year over year after previously increasing [15] Company Strategy and Development Direction - The company is focused on executing growth across its businesses and capital allocation, including share buybacks and M&A opportunities [10][11] - IAC is pursuing strategic divestitures of smaller holdings to free up capital and simplify operations [12] - The company aims to create equity value and reduce the discount at which its shares are trading [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer spending, noting solid performance in DDM despite weak consumer confidence [14][16] - The macroeconomic outlook remains uncertain, but the company is monitoring trends closely and reaffirming guidance based on current business performance [16] - Management highlighted the importance of focusing on execution and controlling what can be controlled in an unpredictable environment [16] Other Important Information - The company reached an agreement to settle litigation related to the match separation, requiring only a $200,000 contribution beyond insurance coverage [8] - IAC has $800 million in net operating losses (NOLs) that could offset taxable gains on its MGM stake [9] Q&A Session Summary Question: Key priorities for 2026 TDM revenue growth and capital allocation - Management discussed excitement about 2026, highlighting projects like the People app and MyRecipes, and emphasized the importance of capital allocation between share repurchases and M&A [18][20][25] Question: Q1 trends in DDM Digital revenue - Management noted that Q1 faced tough comparisons and a decline in core traffic, but March showed solid growth in digital advertising [30][32] Question: DDM cash flow dynamics - Management explained that DDM can dividend cash to IAC if leverage ratios are below four times total debt to EBITDA, enhancing financial flexibility [43] Question: Appointment of Jim Lawson as President of Decipher - Management expressed excitement about Jim Lawson's appointment, emphasizing his experience and the potential for Decipher Plus to drive growth [46][48] Question: Impact of Google phasing out cookies - Management indicated that the cookie phase-out is not a significant concern, as their contextual targeting capabilities remain strong [58][60] Question: Strategic priorities for Care.com - Management outlined three core priorities for Care: improving product matching, optimizing pricing and packaging, and enhancing marketing efforts [100][104]