IAC Reports Q1 2024 Earnings

May 18, 2024

IAC reported earnings on May 8th. It was an uneventful quarter but we received some incremental news.1) Dotdash Meredith had a good quarter. Digital revenue is now the majority of revenue and is growing fast enough to offset the secular decline of print revenue. Adjusted EBITDA was up 40% y/y. The company also announced a partnership with OpenAI to use its information and link to its website 2) ANGI revenue shrank but profits and free cash flow grew. Jeff Kip will take over as CEO for ANGI from Joey Levin and will work to accelerate profitably revenue growth. 3) IAC shared that it owns 29% of Turo on a converted basis and has a warrant that will expire on July 23, 2024. I expect IAC to exercise the warrant which will cost IAC $200MM. IAC noted “MGM and Turo are taking share with leadership positions in large markets.” 2) IAC maintained EBITDA guidance of $320MM to $420MM. 3) 4) I was disappointed that IAC didn’t buy back any stock in the quarter. It has 3.7MM shares remaining on its share repurchase authorization. 5) I updated my SOTP valuation for IAC and believe it’s worth $87/share.