: IAC tops earnings expectations as it prepares to bolster media business
IAC/InterActiveCorp. topped earnings expectations for its most recent quarter while seeing better-than-anticipated contributions from its Angi Inc. home-services business.
The company generated third-quarter net earnings of $60.7 million, or 65 cents a share, down from $184.9 million, or $2.04 a share, in the year-prior quarter. IAC
noted that its net earnings for the quarter included an unrealized gain of $23 million related to the company’s investment in MGM Resorts International, whereas it saw a $228 million unrealized gain in the year-prior quarter.
Analysts tracked by FactSet were expecting a 47-cent loss per share on a GAAP basis.
IAC posted adjusted earnings before interest, taxes, depreciation, and amortization of $30.2 million, down from $31.8 million a year prior but ahead of the FactSet consensus, which called for $9 million.
Revenue rose to $924.1 million from $713.2 million, while analysts had been looking for $921 million.
remained the largest contributor to IAC’s overall business, bringing in $461.6 million, up from $389.9 million a year earlier. Analysts tracked by FactSet expected $452 million in Angi revenue.
Angi recorded a net loss of $17 million, or 3 cents a share, whereas it earned $4.5 million, or 1 cent a share, in the year-earlier quarter. The company also saw adjusted Ebitda of $12.4 million, down from $38.5 million a year earlier but ahead of the FactSet consensus, which called for a breakeven quarter.
While Angi is still being negatively impacted by supply constraints in terms of both labor and materials, the company has seen momentum including with its fixed-price business, Angi Services, through which homeowners pay Angi for services they see listed.
Angi Chief Executive Oisin Hanrahan also highlighted progress in growing the company’s Angi Key membership program through which homeowners pay a monthly fee and can then receive discounts on the services they purchase. The pay-to-save model is “just the beginning of where we will take membership,” he told MarketWatch, as Angi looks to help people manage their homes “in a more thoughtful way.”
The company saw “significant contribution margin improvements” from the services business in the third quarter that were “frankly not part of the plan,” Hanrahan said, given the company’s emphasis on investing to grow the business and gain more market share. Angi plans to invest the money back in the business.
Elsewhere in IAC, the company saw $65.2 million in revenue from its Dotdash media business, up from $50.8 million a year earlier.
IAC recently announced plans to buy media assets from Meredith Corp.
and it will combine these with the Dotdash business upon close of the deal, which is expected by the end of the year. Dotdash sees opportunities to apply its playbook to the Meredith brands, which include People and Food & Wine, by bolstering their online presence and moving away from the “quarter-to-quarter focus.”
Dotdash has typically shied away from news and sports coverage and the company views People’s entertainment focus as being aligned with its current vision. “We create all our content, it’s safe, and it’s not going to put you in a bad mood,” Dotdash Chief Executive Neil Vogel said. “If you’re an entertainment advertiser, that’s a useful thing” and serves as an alternative to platforms like Facebook.
Through the acquisition, Dotdash will get access to more testing labs through which it can review products and furthers its aim to be the “trusted source for product recommendations,” Vogel continued.
IAC also generated 228.4 million in search revenue during the third quarter, as well as $168.9 million in emerging and other revenue. Within the latter category, IAC disclosed $86 million in revenue from Care.com, up from $57 million a year earlier.
The company presented October business trends as well, noting 15% total revenue growth for Angi, 17% growth for Dotdash, 78% growth for search, and 31% growth for the emerging and other category.