IAC(US:IAC)2025-11-04 14:30Financial Data and Key Metrics Changes - IAC reported a 9% digital revenue growth in Q3 2025, marking the eighth consecutive quarter of growth, with strong performance in licensing and performance marketing offsetting a decline in advertising revenue [23][44] - Digital adjusted EBITDA grew 9% to $72 million, with margins at 27% and incremental margins at 26% [24][46] - The company expects digital revenue growth in the range of 7% to 10% for Q4 2025, with adjusted EBITDA guidance for the year slightly lowered to $325 million to $340 million [47] Business Line Data and Key Metrics Changes - People Inc. is the core asset, with a focus on diversifying revenue sources and audience growth, achieving significant traction in off-platform audience growth, which accelerated by 66% year-over-year [35][24] - The print division saw a 10% decline in adjusted EBITDA and a 15% revenue decline, which was considered acceptable by management [46] - The emerging and other segments reported a negative $20 million EBITDA due to legal expenses, but the rest of the segment remains profitable [49] Market Data and Key Metrics Changes - Google search traffic as a source for core brands decreased from 54% two years ago to 24% in the latest quarter, but overall audience scale has been maintained [32] - Ad revenue declined by 3% in Q3, primarily due to volume-related issues rather than rate-related [33] - Off-platform revenue, which is the fastest-growing revenue stream, accounted for over a third of the quarter's revenue [35] Company Strategy and Development Direction - The company aims to streamline its assets and reduce overhead, focusing on People Inc. and MGM as core components of its strategy [6][5] - IAC plans to divest non-core holdings and increase share repurchases, with a total of $300 million in shares bought back year-to-date [20][50] - The management is optimistic about evolving People Inc. into a more proactive business model, leveraging its iconic brands and exploring new business opportunities [13][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges posed by Google and the broader market, emphasizing a strong relationship with audiences and advertisers [70][72] - The macroeconomic environment is perceived as stable for middle and upper segments, while some pressures exist in lower segments, particularly in corporate spending [80][81] - The company is optimistic about future growth, particularly in off-platform revenue and new initiatives like the Microsoft AI deal [68][39] Other Important Information - The company laid off about 6% of its workforce to free up capital for investments and maintain profitability goals [42] - IAC's cash balances exceed $1 billion, which will be enhanced by selling non-core assets [20] Q&A Session Summary Question: Thoughts on MGM's valuation and investor interest - Management believes that owning MGM through IAC offers a cheaper entry point and that the combined assets provide additional value [53][60] Question: Onetime expense cleanup in Q3 - Management indicated that significant cleanup has occurred, with no expectation of large one-time charges continuing in the future [60][61] Question: Update on People Inc. and Google litigation - Management expressed confidence in the future of People Inc. and highlighted the ongoing litigation against Google, seeking significant damages [73][75] Question: Macro environment and capital allocation - The macro environment is stable, with a focus on stock buybacks and cautious approach to acquisitions due to high prices [80][87] Question: Corporate costs trajectory - Corporate costs are expected to decrease as the company continues to rationalize its operations [113]