IAC Inc.

08/04/2025 | Press release | Distributed by Public on 08/04/2025 14:14

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
GENERAL
Management Overview
On July 31, 2025, Dotdash Meredith Inc. was rebranded "People Inc." and is referred to as such throughout this report. Dotdash Meredith Inc. remains the entity's legal name.
IAC today is comprised of category leading businesses, including People Inc. and Care.com, among others, and holds strategic equity positions in MGM Resorts International ("MGM") and Turo Inc. ("Turo").
As used herein, "IAC," the "Company," "we," "our" or "us" and other similar terms refer to IAC Inc. and its subsidiaries (unless the context requires otherwise).
For a more detailed description of the Company's operating businesses, see "Description of IAC Businesses" included in "Item 1-Business" to the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
Angi Inc. Spin-Off
On March 31, 2025, IAC completed the spin-off of Angi Inc. ("Angi") by means of a special dividend (the "Distribution") of all shares of Angi capital stock held by IAC to holders of its common stock and Class B common stock. As a result of the Distribution, IAC no longer owns any shares of Angi's capital stock and Angi became an independent public company. On November 1, 2023, Angi completed the sale of Total Home Roofing, LLC ("Roofing") and reflected it as a discontinued operation in its standalone financial statements. At the time of its sale, Roofing did not meet the threshold to be reflected as a discontinued operation at the IAC level, therefore, IAC moved Roofing to Emerging & Other. As a result of the Distribution, the operations of Angi, which include Roofing, are presented as discontinued operations within IAC's consolidated financial statements for all periods prior to March 31, 2025. See "Note 12-Discontinued Operations" in the accompanying notes to the financial statements included in "Item 1-Consolidated Financial Statements" for additional information.
Defined Terms and Operating Metrics:
Unless otherwise indicated or as the context otherwise requires, certain terms used in this quarterly report, which include the principal operating metrics we use in managing our business, are defined below:
IAC Businesses (for additional information see "Note 5-Segment Information" in the accompanying notes to the financial statements included in "Item 1-Consolidated Financial Statements"):
•People Inc.- one of the largest digital and print publishers in America and is committed to content-made by people for people-that delights, teaches, inspires and entertains. More than 175 million people trust People Inc. each month to help them make decisions, take action, and find inspiration. People Inc.'s over 40 iconic brands include PEOPLE, Better Homes & Gardens, Verywell, Food & Wine, Travel + Leisure, Allrecipes, REAL SIMPLE, Investopedia, and Southern Living. People Inc. has two operating segments: (i) Digital, which includes its digital, mobile and licensing operations; and (ii) Print, which includes its magazine subscription and newsstand operations;
•Care.com- a leading online destination for families to connect with caregivers for their children, aging parents, pets and homes and for caregivers to connect with families seeking care services. Care.com's brands include Care for Business, Care.com's offerings to enterprises, and HomePay;
•Search- consists of Ask Media Group, a collection of websites providing general search services and information, and Desktop, which includes our business-to-business partnership operations and the remaining installed base of our legacy direct-to-consumer downloadable desktop applications; and
•Emerging & Other- consists of:
•Vivian Health, a platform to efficiently connect healthcare professionals with job opportunities;
•The Daily Beast and IAC Films; and
•Mosaic Group, a former developer and provider of global subscription mobile applications, for periods prior to the sale of its assets on February 15, 2024, which was accounted for as a sale of a business, for approximately $160 million.
People Inc.
•Digital Revenue -includes advertising revenue, performance marketing revenue and licensing and other revenue.
◦Advertising revenue- primarily includes revenue generated from digital advertisements and intent-based advertising targeting capabilities (D/Cipher+), which are sold directly to advertisers or through advertising agencies and programmatic advertising networks.
◦Performance marketing revenue- primarily includes commissions generated through affiliate commerce, performance marketing services and affinity marketing channels. Affiliate commerce commission revenue is generated when People Inc.'s branded content refers consumers to commerce partner websites resulting in a purchase or transaction. Performance marketing services commission revenue is generated on a cost-per-click or cost-per-action basis. Affinity marketing programs are arrangements where People Inc. acts as an agent for both People Inc. and third-party publishers to market and place magazine subscriptions online for which commission revenue is earned when a subscriber name has been provided to the publisher.
◦Licensing and Other revenue- primarily includes revenue generated through brand and content licensing and similar agreements. Brand licensing generates royalties from long-term trademark licensing agreements with retailers, manufacturers, publishers and service providers. Content licensing royalties are earned from our relationship with Apple News+ as well as other content use and distribution relationships, including utilization in large-language models and other artificial intelligence-related activities.
•Print Revenue- primarily includes subscription, advertising, newsstand, project and other, and performance marketing revenue. Project and other and performance marketing revenue include revenue from advertising agency related revenue and customer publishing, and revenue from marketing third-party magazine subscriptions, respectively.
•Total Sessions- represents unique visits to all sites that are part of People Inc.'s network.
•Core Sessions- represents a subset of Total Sessions that comprises unique visits to People Inc.'s most significant (in terms of investment) owned and operated sites as follows:
PEOPLE InStyle Simply Recipes
Allrecipes Food & Wine Serious Eats
Investopedia Martha Stewart EatingWell
Better Homes & Gardens Byrdie Parents
Verywell Health REAL SIMPLE Verywell Mind
The Spruce Southern Living Health
Travel + Leisure
Care.com
•Consumer Revenue- consists of revenue primarily generated through subscription fees from families and caregivers, both domestically and internationally, for its suite of products and services. Consumer revenue also includes revenue generated through Care.com's comprehensive household payroll and tax support services (HomePay) as well as through contracts with businesses that advertise through its platform.
•Enterprise Revenue- consists of revenue primarily generated through annual contracts with businesses (Care for Business)(employers or re-sellers) who provide access to Care.com's suite of products and services as an employee benefit.
Operating Costs and Expenses:
•Cost of revenue (exclusive of depreciation) - consists primarily of traffic acquisition costs, which include (i) payments made to partners who direct traffic to our Ask Media Group websites and who distribute our business-to-business customized browser-based applications and (ii) the amortization of fees paid to Apple and Google related to the distribution of apps and the facilitation of in-app purchases. Traffic acquisition costs include payment of amounts based on revenue share and other arrangements. Cost of revenue also includes production, distribution and editorial costs at People Inc. related to the Print segment, compensation expense (including stock-based compensation expense) and other employee-related costs, content costs, hosting fees, credit card processing fees and payments made to care providers for Care For Business.
•Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing expenditures, including fees paid to search engines, social media sites and other online marketing platforms, offline marketing expenditures, which primarily consists of costs related to television, streaming, direct mail and radio advertising within our Care.com segment, compensation expense (including stock-based compensation expense) and other employee-related costs for sales force and marketing personnel and subscription acquisition costs related to People Inc.
•General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and customer service functions, rent expense and facilities cost (including impairments of right-of-use assets or "ROU assets"), fees for professional services (including transaction-related costs related to the Distribution and acquisitions), provision for credit losses and software license and maintenance costs. The customer service function at Care.com includes personnel who support its caregivers and consumers.
•Product development expense- consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs and third-party contractor costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology and software license and maintenance costs.
Long-term debt - All of the Company's long-term debt are liabilities of People Inc. (For additional information see "Note 3-Long-term Debt" in the accompanying notes to the financial statements included in "Item 1-Consolidated Financial Statements"):
•Term Loan A-1 - due May 14, 2030. On May 14, 2025, People Inc. entered into the Incremental Assumption Agreement and Amendment No. 2 to the Credit Agreement ("Amendment No. 2"), which replaced $288.8 million of the then outstanding Term Loan A with $350 million of the Term Loan A-1 and provided for a new five-year $150 million revolving credit facility ("Revolving Facility"). At June 30, 2025, the outstanding balance of the Term Loan A-1 was $350.0 million and bore interest at secured overnight financing rate ("SOFR") plus 2.00%, or 6.31%. At December 31, 2024, the outstanding balance of the Term Loan A was $297.5 million and bore interest at an adjusted term SOFR plus 2.25%, or 6.94%. The Term Loan A-1 requires quarterly principal payments commencing September 30, 2025.
•Term Loan B-2- due June 16, 2032. On June 16, 2025, People Inc. completed the refinancing and replacement of its then outstanding $1.18 billion Term Loan B-1 with a combination of $700 million of the Term Loan B-2 and $400 million of the 7.625% Senior Secured Notes due June 15, 2032 ("2032 Notes"). At June 30, 2025 and December 31, 2024, the outstanding balances of the Term Loan B-2 and the Term Loan B-1 were $700.0 million and $1.18 billion, respectively, and bore interest at SOFR, subject to a minimum of 0.50%, plus 3.50%, or 7.82% and 8.05%, respectively, as the applicable margin was unchanged under the governing agreements. The Term Loan B-2 requires quarterly principal payments commencing March 31, 2026.
The Term Loan A, Term Loan A-1, Term Loan B-1 and Term Loan B-2 are collectively referred to herein as the "Term Loans."
•2032 Notes- due June 15, 2032. At June 30, 2025 the outstanding balance of the 2032 Notes, described above, was $400.0 million.
•Revolving Facility- Amendment No. 2 provided for a revolving credit facility of $150 million, which expires on May 14, 2030, and replaced the then existing revolving credit facility. To date, People Inc. has not made any borrowings under any of its revolving credit facilities.
Non-GAAP financial measure:
•Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")- is a non-GAAP financial measure. See "Principles of Financial Reporting" for the definition of Adjusted EBITDA and required non-GAAP reconciliations.
Services Agreement with Google
On January 20, 2025, the Company entered into a further amendment to its Services Agreement (the "Amendment"), with the amended terms effective on April 1, 2025. Following the execution of the Amendment, the expiration date of the Services Agreement was extended from March 31, 2025 to March 31, 2026, with an automatic renewal for an additional one-year period absent notice of non-renewal from either party on or before December 31, 2025.
Google has made changes to the policies under the Services Agreement and has also made industry-wide changes that have in the past (and could in the future) require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which have negatively impacted revenue and been costly to address (and could in the future), and which have had and could have an adverse effect on our business, financial condition and results of operations. Further, changes to certain of the economic terms of the Services Agreement became effective April 1, 2025 and could impact Search revenue. See "Note 1-The Company and Summary of Significant Accounting Policies" in the accompanying notes to the financial statements included in "Item 1-Consolidated Financial Statements" for additional information on the Services Agreement.
Results of Operations for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024
The following discussion should be read in conjunction with "Item 1-Consolidated Financial Statements."
Revenue
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
People Inc.
Digital $ 260,361 $ 238,081 $ 22,280 9% $ 484,577 $ 447,405 $ 37,172 8%
Print 173,542 191,681 (18,139) (9)% 347,336 377,581 (30,245) (8)%
Intersegment eliminations (6,533) (4,601) (1,932) (42)% (11,472) (9,285) (2,187) (24)%
Total People Inc.
427,370 425,161 2,209 1% 820,441 815,701 4,740 1%
Care.com 82,020 87,650 (5,630) (6)% 170,872 180,177 (9,305) (5)%
Search 61,690 101,756 (40,066) (39)% 132,019 210,229 (78,210) (37)%
Emerging & Other 15,877 19,886 (4,009) (20)% 34,164 53,900 (19,736) (37)%
Intersegment eliminations (29) (60) 31 52% (79) (1,324) 1,245 94%
Total $ 586,928 $ 634,393 $ (47,465) (7)% $ 1,157,417 $ 1,258,683 $ (101,266) (8)%
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 Change % Change 2025 2024 Change % Change
Operating metrics:
People Inc.
Digital
Total Sessions (in millions) 2,444 2,573 (129) (5) % 4,928 5,323 (395) (7) %
Core Sessions (in millions) 2,202 2,165 37 2 % 4,413 4,438 (25) (1) %
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
•People Inc. revenue increased 1% to $427.4 million due to an increase of $22.3 million, or 9%, from Digital, partially offset by a decrease of $18.1 million, or 9%, from Print.
◦The Digital increase was due primarily to increases of $7.7 million, or 5%, in Advertising revenue, $7.5 million, or 14.0%, in Performance marketing revenue and $7.0 million, or 23%, in Licensing and Other revenue. The increase in Advertising revenue was driven primarily by an increase in premium advertising sold through the People Inc. sales team in the Health and Pharmaceuticals, Technology and Travel categories, partially offset by lower programmatic revenue primarily due to lower impression volumes driven by higher premium advertising growth and related impression consumption, partially offset by higher programmatic rates. The increase in Performance marketing revenue was due primarily to an increase in affiliate commerce commission revenue, partially offset by a decrease in performance marketing service revenue in the Finance category. The increase in Licensing and Other revenue was due primarily to improved performance from content syndication partners and Apple News+, as well as the contribution of a full quarter of OpenAI revenue, a partnership which began in May 2024 (the "OpenAI Partnership").
◦The Print decrease was due primarily to decreases of $8.3 million, or 18%, in advertising revenue, $6.8 million, or 18%, in project and other revenue, $2.7 million, or 33%, in performance marketing revenue and $2.6 million, or 3% in subscription revenue, partially offset by an increase of $2.4 million, or 10%, in newsstand revenue. The decreases in advertising revenue, performance marketing revenue and subscription revenue are all due, in part, to ongoing portfolio optimization changes that resulted in a reduction in the number of issues sold in the current quarter compared to the prior year quarter and the ongoing migration of audience from print to digital platforms. The decrease in project and other revenue was due to a decrease in ticket sales for certain branded events. The increase in newsstand revenue was due primarily to an increase in the number of newsstand only issues produced in the current year and increased sales efficiency on titles produced in the prior year.
•Care.com revenue decreased 6% to $82.0 million due primarily to decreases of $4.2 million, or 9%, in Consumer Revenue and $1.4 million, or 4%, in Enterprise Revenue. The decrease in Consumer Revenue was driven by fewer Care.com platform subscriptions. The decrease in Enterprise Revenue was primarily due to lower overall product utilization.
•Search revenue decreased 39% to $61.7 million due to decreases of $32.8 million, or 39%, from Ask Media Group, resulting from channel mix, and a reduction in marketing through affiliate partners, which drove fewer visitors to our ad-supported search and content websites and, $7.3 million, or 41%, from Desktop due primarily to the continued decline in search queries from our legacy business-to-business partnership operations.
•Emerging & Other revenue decreased 20% to $15.9 million due primarily to a decrease of $4.7 million, or 99%, from IAC Films, partially offset by an increase in revenue of 14% from The Daily Beast.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
•People Inc. revenue increased 1% to $820.4 million due to an increase of $37.2 million, or 8%, from Digital, partially offset by a decrease of $30.2 million, or 8%, from Print.
◦The Digital increase was due primarily to increases of $14.5 million, or 26%, in Licensing and Other revenue, $13.2 million, or 13%, in Performance marketing revenue and $9.4 million, or 3%, in Advertising revenue. The increase in Licensing and Other revenue was due primarily to the contribution of a full six months of revenue from the OpenAI Partnership and improved performance of content syndication partners including Apple News+. The increase in Performance marketing revenue was due primarily to the factors described above in the three-month discussion. The increase in Advertising revenue was driven primarily by an increase in premium advertising sold through the People Inc. sales team in the Technology, Health and Pharmaceuticals and Travel categories, partially offset by lower programmatic revenue due primarily to the factors described above in the three-month discussion.
◦The Print decrease was due primarily to decreases of $13.6 million, or 15%, in advertising revenue, $9.4 million, or 14%, in project and other revenue, $6.3 million, or 4% in subscription revenue and $5.2 million, or 27%, in performance marketing revenue, partially offset by an increase of $4.2 million, or 8%, in newsstand revenue. The decreases in advertising revenue, subscription revenue and performance marketing revenue and the increase in newsstand revenue are all due, in part, to the factors described above in the three-month discussion. The decrease in project and other revenue was due primarily to political advertising spend from a legacy agency business in 2024 on third-party publisher platforms and a decrease in ticket sales for certain branded events.
•Care.com revenue decreased 5% to $170.9 million due primarily to a decrease of $9.0 million, or 9%, in Consumer Revenue due primarily to the factor described above in the three-month discussion.
•Search revenue decreased 37% to $132.0 million due to decreases of $65.1 million, or 37%, from Ask Media Group and $13.1 million, or 36%, from Desktop due primarily to the factors described above in the three-month discussion.
•Emerging & Other revenue decreased 37% to $34.2 million due primarily to the inclusion in the prior year period of $17.8 million in revenue from Mosaic Group, the assets of which were sold on February 15, 2024, and a decrease of $4.4 million, or 71%, from IAC Films, partially offset by an increase in revenue of 39%, from The Daily Beast.
Cost of revenue (exclusive of depreciation shown separately below)
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below) $ 201,971 $ 253,351 $ (51,380) (20)% $ 407,254 $ 512,818 $ (105,564) (21)%
As a percentage of revenue 34% 40% 35% 41%
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Cost of revenue in 2025 decreased from 2024 due primarily to decreases of $44.4 million from Search, $4.1 million from People Inc. and $2.4 million from Emerging & Other.
•The Search decrease was due primarily to a decrease in traffic acquisition costs of $43.8 million following a decrease in revenue and the proportion of revenue earned from affiliate partners who direct traffic to our websites.
•The People Inc. decrease was due primarily to a decrease of $11.8 million from Print, partially offset by an increase of $9.4 million from Digital.
◦The Print decrease was due primarily to a decrease of $10.6 million in production and distribution costs (postage, paper, printing and editorial) resulting from the planned reduction in the number of printed copies of certain publications and a decrease in paper costs.
◦The Digital increase was due primarily to increases of $6.4 million in compensation expense due primarily to an increase in headcount to better align resources with strategic initiatives, $2.9 million in content costs due primarily to increased demand for custom content campaigns within premium advertising revenue and $1.1 million in spend related to advertising campaigns sold with D/Cipher+.
•The Emerging & Other decrease was due primarily to a decrease in compensation expense of $1.9 million at The Daily Beast resulting from a planned reduction in editorial staff in the prior year.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Cost of revenue in 2025 decreased from 2024 due primarily to decreases of $84.6 million from Search, $10.8 million from Emerging & Other and $8.3 million from People Inc.
•The Search decrease was due primarily to a decrease in traffic acquisition costs of $83.0 million due primarily to the factors described above in the three-month discussion.
•The Emerging & Other decrease was due primarily to the inclusion in the prior year period of $7.7 million in expense from Mosaic Group, the assets of which were sold on February 15, 2024, and a decrease of $2.6 million in compensation expense at The Daily Beast resulting from a planned reduction in editorial staff in the prior year.
•The People Inc. decrease was due primarily to a decrease of $25.3 million from Print, partially offset by an increase of $18.8 million from Digital.
◦The Print decrease was due primarily to a decrease of $21.5 million in production and distribution costs (postage, printing, paper and editorial) resulting from the planned reduction in the number of printed copies of certain publications and a decrease in paper costs and a decrease of $2.3 million in compensation expense primarily related to headcount reductions in the fourth quarter of 2024 intended to better align resources with strategic initiatives.
◦The Digital increase was due primarily to increases of $12.0 million in compensation expense, $4.8 million in content costs, $1.8 million in traffic acquisition costs and $1.3 million in spend related to advertising campaigns sold with D/Cipher+. The increases in both compensation expense and content costs were due primarily to the factors described above in the three-month discussion. The increase in traffic acquisition costs was due primarily to a new contractual relationship entered into in the prior year to increase programmatic revenue rates.
Selling and marketing expense
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Selling and marketing expense $ 185,825 $ 177,311 $ 8,514 5% $ 366,739 $ 365,388 $ 1,351 -%
As a percentage of revenue 32% 28% 32% 29%
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Selling and marketing expense in 2025increasedfrom 2024 due to increases of $6.4 million from Search and $5.0 million from People Inc., partially offset by a decrease of $3.4 million from Emerging & Other.
•The Search increase was due primarily to an increase of $7.0 million in online marketing spend due to higher traffic through internal marketing efforts, partially offset by a decrease of $0.5 million in compensation expense due to a reduction in headcount.
•The People Inc. increase was due primarily to an increase of $12.9 millionfrom Digital, partially offset by a decrease of $7.6 millionfrom Print.
◦The Digital increase was due primarily to increases of $10.0 million in advertising and events production expense due, in part, to an increase in online marketing spend due primarily to an increase in paid affiliate commerce commission revenue and $2.5 million in compensation expense due primarily to higher headcount and commissions.
◦The Print decrease was due primarily to decreases of $5.2 million in advertising and events production expense due, in part, to a decrease in direct mail marketing spend, and $1.0 million in compensation expense primarily related to headcount reductions in the fourth quarter of 2024 intended to better align resources with strategic initiatives.
•The Emerging & Other decrease was due primarily to a decrease of $1.6 million in offline marketing spend at IAC Films and a decrease of $0.7 million in compensation expense at Vivian Health primarily related to a reduction in headcount.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Selling and marketing expense in 2025 increased slightly from 2024 due to increases of $12.0 millionfrom Search and $4.0 millionfrom People Inc., partially offset by decreases of $12.9 millionfrom Emerging & Other and $2.2 millionfrom Care.com.
•The Search increase was due primarily to an increase of $13.5 million in online marketing spend, partially offset by a decrease of $1.3 million in compensation expense due to the factors described above in the three-month discussion.
•The People Inc. increase was due primarily to an increase of $17.0 millionfrom Digital, partially offset by a decrease of $12.7 millionfrom Print.
◦The Digital increase was due primarily to increases of $12.4 million in online marketing spend and $4.8 million in compensation expense due primarily to the factors described above in the three-month discussion.
◦The Print decrease was due primarily to decreases of $7.0 million in advertising and events production expense due, in part, to a decrease in direct mail marketing spend and the promotion of branded events in the prior year period, and $3.7 million in compensation expense primarily due to the factors described above in the three-month discussion.
•The Emerging & Other decrease was due primarily to the inclusion in the prior year of $8.3 millionof expense from Mosaic Group, the assets of which were sold on February 15, 2024, a decrease of $1.6 million in offline marketing spend at IAC Films and a decrease of $1.1 million in compensation expense at Vivian Health primarily due to the factor described above in the three-month discussion.
•The Care.com decrease was due primarily to a decrease of $2.2 million in online marketing spend.
General and administrative expense
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
General and administrative expense $ 117,343 $ 126,006 $ (8,663) (7)% $ 180,167 $ 253,478 $ (73,311) (29)%
As a percentage of revenue 20% 20% 16% 20%
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
General and administrative expense in 2025 decreased from 2024 due primarily to decreases of $9.2 million from Care.com and $3.7 million from Corporate, partially offset by an increase of $5.0 million from Emerging & Other.
•The Care.com decrease was due primarily to the inclusion in the prior year of $9.5 million in legal accruals due to the resolution of certain legal matters.
•The Corporate decrease was due primarily to a decrease in compensation expense of $6.6 million due primarily to the inclusion in the prior year period of $3.2 million in stock-based compensation expense related to our former Chief Executive Officer's ("CEO") restricted stock award, which was forfeited on January 13, 2025, pursuant to his employment transition agreement (the "Employment Transition Agreement"),and a decrease in compensation expense driven by other headcount reductions, partially offset by a gain on a legal settlement in the prior year period.
•The Emerging & Other increase was due primarily to increases of $2.9 million in legal fees related to a legacy business and $2.4 million in stock-based compensation expense.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
General and administrative expense in 2025 decreased from 2024 due primarily to decreases of $38.2 millionfrom People Inc., $22.9 million from Corporate, $9.0 million from Care.com, and $3.1 million from Search.
•The People Inc. decrease was due primarily to the inclusion in 2025 of a gain of $36.2 million from the termination of a lease for certain unoccupied office space at Other (unallocated corporate costs).
•The Corporate decrease was due primarily to a decrease in compensation expense of $28.1 million, partially offset by $4.8 million in transaction-related costs related to the Distribution. The decrease in compensation expense was due primarily to a decrease of $41.9 million in stock-based compensation expense due primarily to the inclusion in the prior year period of $4.9 million of expense related to our former CEO's restricted stock award and the reversal in the current year period of $49.8 million of previously recognized expense related to the forfeiture of the aforementioned restricted stock award pursuant to the Employment Transition Agreement described above in the three-month discussion, partially offset by $14.9 million of stock-based compensation expense related to the transfer of 5.0 million Class B shares of Angi held by the Company, prior to the Distribution, to our former CEO, pursuant to the Employment Transition Agreement. Partially offsetting this decrease in stock-based compensation expense is $14.7 million in separation benefits to our former CEO under the Employment Transition Agreement and $2.1 million in severance and related expenses driven by other headcount reductions.
•The Care.com decrease was due primarily to the inclusion in the prior year of $9.5 million in legal accruals due to the factor described above in the three-month discussion.
•The Search decrease was due primarily to decreases in compensation expense and non-income taxes of $1.1 million and $1.0 million, respectively. The decrease in compensation expense was due primarily to a planned reduction in headcount. The decrease in non-income taxes resulted from the recognition in the prior year period of Canada's digital services tax which was effective for the second quarter of 2024 and applied retroactively.
Product development expense
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Product development expense $ 49,826 $ 53,380 $ (3,554) (7)% $ 100,039 $ 116,623 $ (16,584) (14)%
As a percentage of revenue 8% 8% 9% 9%
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Product development expense in 2025 decreased from 2024 due primarily to a decrease of $2.4 million from People Inc.
•The People Inc. decrease was due primarily to decreases of $1.4 million and $1.0 million from Digital and Print, respectively, resulting from decreases in compensation expense related to headcount reductions. The decrease in compensation expense from Digital was net of increased investment in the PEOPLE app.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Product development expense in 2025 decreased from 2024 due primarily to decreases of $9.8 million from Emerging & Other and $7.3 million from People Inc.
•The Emerging & Other decrease was due primarily to the inclusion in the prior year period of $8.0 million of expense from Mosaic Group, the assets of which were sold on February 15, 2024, and a decrease of $1.8 million in compensation expense from Vivian Health related to headcount reductions.
•The People Inc. decrease was due primarily to decreases of $5.1 million and $2.1 million from Digital and Print, respectively, due to the factors described above in the three-month discussion.
Depreciation
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Depreciation $ 7,980 $ 9,124 $ (1,144) (13)% $ 19,926 $ 21,848 $ (1,922) (9)%
As a percentage of revenue 1% 1% 2% 2%
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Depreciation in 2025 decreased from 2024 due primarily to decreases of $0.8 million at People Inc. and $0.3 million at Care.com. The decrease at People Inc. was due primarily to certain assets being fully depreciated in the prior year. The decrease at Care.com was due primarily to certain capitalized software being fully depreciated.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Depreciation in 2025 decreased from 2024 due primarily to a decrease of $1.4 million at Care.com due primarily to certain capitalized software being fully depreciated.
Amortization of Intangibles
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Amortization of intangibles $ 23,408 $ 36,710 $ (13,302) (36)% $ 46,941 $ 73,438 $ (26,497) (36)%
As a percentage of revenue 4% 6% 4% 6%
For the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024
Amortization of intangibles in 2025 decreased from 2024 due primarily to lower expense at People Inc. due to certain intangible assets that became fully amortized in the prior year.
Operating income (loss)
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
People Inc.
Digital $ 38,092 $ 26,025 $ 12,067 46% $ 56,801 $ 25,845 $ 30,956 120%
Print 11,184 5,535 5,649 102% 19,095 414 18,681 4,515%
Other (14,497) (13,222) (1,275) (10)% 2,090 (28,750) 30,840 NM
Total People Inc.
34,779 18,338 16,441 90% 77,986 (2,491) 80,477 NM
Care.com 2,972 (964) 3,936 NM 14,656 10,683 3,973 37%
Search 5,101 4,624 477 10% 8,110 8,980 (870) (10)%
Emerging & Other (9,221) (6,773) (2,448) (36)% (14,107) (27,854) 13,747 49%
Corporate (33,056) (36,714) 3,658 10% (50,294) (74,228) 23,934 32%
Total $ 575 $ (21,489) $ 22,064 NM $ 36,351 $ (84,910) $ 121,261 NM
As a percentage of revenue -% (3)% 3% (7)%
_____________________
NM = Not meaningful
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Operating income in 2025 increased $22.1 million to $0.6 million from a loss of $21.5 million in 2024 due primarily to a decrease of $13.3 million in amortization of intangibles, described above, an increase of $6.7 million in Adjusted EBITDA, described below, and decreases of $1.1 million in depreciation, described above, and $1.0 million in stock-based compensation expense. The decrease in stock-based compensation expense was due primarily to the inclusion in the prior year period of $3.2 million in expense related to our former CEO's restricted stock award, which was forfeited on January 13, 2025, pursuant to his Employment Transition Agreement, partially offset by new awards granted subsequent to June 30, 2024.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Operating income in 2025 increased $121.3 million to $36.4 million from a loss of $84.9 million in 2024 due primarily to an increase of $52.0 million in Adjusted EBITDA, described below, a decrease of $40.9 million in stock-based compensation expense and decreases of $26.5 million in amortization of intangibles and $1.9 million in depreciation. The decrease in stock-based compensation expense was due primarily to the inclusion in the prior year period of expense related to our former CEO's restricted stock award and the subsequent reversal of expense in 2025 resulting from the forfeiture of the aforementioned award on January 13, 2025, as described above in the general and administrative expense discussion, partially offset by new awards granted subsequent to June 30, 2024. The decreases in amortization of intangibles and depreciation are described above.
At June 30, 2025, there was $108.4 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.2 years.
The aggregate carrying value of goodwill for which the most recent estimate of the excess of fair value over carrying value is less than 20% is $490.9 million.
Adjusted EBITDA
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
People Inc.
Digital $ 63,009 $ 63,446 $ (437) (1)% $ 105,364 $ 100,405 $ 4,959 5%
Print 16,731 13,210 3,521 27% 30,186 16,157 14,029 87%
Other (10,119) (10,232) 113 1% 14,362 (19,896) 34,258 NM
Total People Inc.
69,621 66,424 3,197 5% 149,912 96,666 53,246 55%
Care.com 5,839 2,695 3,144 117% 20,333 19,128 1,205 6%
Search 5,101 4,645 456 10% 8,110 9,022 (912) (10)%
Emerging & Other (6,338) (6,507) 169 3% (10,856) (27,146) 16,290 60%
Corporate (22,785) (22,485) (300) (1)% (65,206) (47,357) (17,849) (38)%
Total $ 51,438 $ 44,772 $ 6,666 15% $ 102,293 $ 50,313 $ 51,980 103%
As a percentage of revenue 9% 7% 9% 4%
See "Principles of Financial Reporting" for the definition of Adjusted EBITDA and required non-GAAP reconciliations.
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
•People Inc. Adjusted EBITDA increased 5% to $69.6 million due to increases in Adjusted EBITDA of $3.5 million from Print, partially offset by a decrease in Adjusted EBITDA of $0.4 million from Digital.
◦The Print Adjusted EBITDA increase was due primarily to lower operating expenses from continued cost rationalization efforts, partially offset by lower revenue.
◦The Digital Adjusted EBITDA decrease was due primarily to higher cost of revenue, an increase in online marketing spend and increased investment in D/Cipher+ and the PEOPLE app, partially offset by higher revenue.
•Care.com Adjusted EBITDA increased 117% to $5.8 million due primarily to the inclusion in the prior year of $9.5 million in legal accruals due to the resolution of certain legal matters, partially offset by lower revenue.
•Search Adjusted EBITDA increased 10% to $5.1 million due primarily to lower traffic acquisition costs, partially offset by lower revenue and higher selling and marketing expense.
•Emerging & Other Adjusted EBITDA loss decreased 3% to $6.3 million due primarily to reduced losses at The Daily Beast and profits at Vivian Health compared to losses in the prior year period, partially offset by an increase of $2.9 million in legal fees related to a legacy business and losses at IAC Films compared to profits in the prior year period.
•Corporate Adjusted EBITDA loss increased 1% to $22.8 million due primarily to higher legal fees, partially offset by lower compensation expense.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
•People Inc. Adjusted EBITDA increased 55% to $149.9 million due to increases in Adjusted EBITDA of $34.3 million from Other (unallocated corporate costs), $14.0 million from Print and $5.0 million from Digital.
◦The Other (unallocated corporate costs) Adjusted EBITDA increase was due primarily to the inclusion in 2025 of a gain of $36.2 million from the termination of a lease for certain unoccupied office space.
◦The Print Adjusted EBITDA increase was due primarily to the factors described above in the three-month discussion.
◦The Digital Adjusted EBITDA increase was due primarily to higher revenue, partially offset by higher cost of revenue, an increase in online marketing spend and increased investments in D/Cipher+ and the PEOPLE app.
•Care.com Adjusted EBITDA increased 6% to $20.3 million due primarily to the inclusion in the prior year of $9.5 million in legal accruals due to the factor described above in the three-month discussion and lower selling and marketing expense, partially offset by lower revenue.
•Search Adjusted EBITDA decreased 10% to $8.1 million due primarily to lower revenue and higher selling and marketing expense, partially offset by lower traffic acquisition costs.
•Emerging & Other Adjusted EBITDA loss decreased 60% to $10.9 million due primarily to the inclusion in the prior year period of $16.5 million in severance expense and transaction-related costs related to the sale of assets of Mosaic Group on February 15, 2024, reduced losses at The Daily Beast and profits at Vivian Health compared to losses in the prior year period, partially offset by an increase of $6.2 million in legal fees related to a legacy business.
•Corporate Adjusted EBITDA loss increased 38% to $65.2 million due primarily to $14.7 million in separation benefits to our former CEO under the Employment Transition Agreement, $4.8 million in transaction-related costs related to the Distribution and $2.1 million in severance and related expenses driven by other headcount reductions.
Interest expense
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Interest expense $ (37,167) $ (34,474) $ (2,693) (8)% $ (65,481) $ (69,154) $ 3,673 (5)%
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Interest expense in 2025 increased from 2024 due primarily to an extinguishment loss of $8.5 million in connection with the refinancing of the People Inc. debt in the second quarter of 2025 and interest expense on the 2032 Notes issued June 16, 2025, partially offset by decreases in interest rates and the amount of debt outstanding under the Term Loans. The extinguishment loss is due to the write off of a pro-rata amount of unamortized capitalized costs and original issue discount related to People Inc.'s then outstanding debt and its then existing revolving credit facility.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Interest expense in 2025 decreased from 2024 due primarily to decreases in interest rates and the amount of debt outstanding under the Term Loans, partially offset by the extinguishment loss and interest expense on the 2032 Notes described above in the three-month discussion.
For further details, see "Note 3-Long-term debt" in the accompanying notes to the financial statements included in "Item 1. Consolidated Financial Statements."
Unrealized gain (loss) on investment in MGM
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Unrealized gain (loss) on investment in MGM
$ 307,437 $ (179,284) $ 486,721 NM $ (16,828) $ (15,533) $ (1,295) (8)%
For the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024
The Company accounts for its investment in MGM under the equity method of accounting and has elected to account for this investment pursuant to the fair value option. The fair value of the investment in MGM is remeasured each reporting period based upon MGM's closing stock price on the New York Stock Exchange on the last trading day in the reporting period; any unrealized pre-tax gains or losses are included in the statement of operations.
Based on the number of MGM common shares outstanding at June 30, 2025, the Company owns approximately 23.8% of MGM.
Other income, net
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(Dollars in thousands)
Interest income $ 11,270 $ 16,962 $ 25,734 $ 33,850
Net (downward) upward adjustments to the carrying value of equity securities without readily determinable fair values and net gain (loss) on sales of investments and businesses (including unrealized losses on investments)(a)
(11,219) 2,262 (18,845) 28,203
Unrealized increase in the estimated fair value of a warrant - 30,624 - 20,393
Other 2,777 275 3,627 (2,002)
Other income, net $ 2,828 $ 50,123 $ 10,516 $ 80,444
$ Change $ (47,295) $ (69,928)
% Change (94) % (87) %
_____________________
(a) Includes a pre-tax gain of $29.2 million on the sale of assets of Mosaic Group, which was included within Emerging & Other, and was accounted for as a sale of a business, in the six months ended June 30, 2024.
Income tax (provision) benefit
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Income tax (provision) benefit $ (63,040) $ 40,432 $ (103,472) NM $ 16,194 $ (6,095) $ 22,289 NM
Effective income tax rate 23% 22% 46% NM
For further details of income tax matters, see "Note 7-Income Taxes" in the accompanying notes to the financial statements included in "Item 1. Consolidated Financial Statements."
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
In 2025, the effective income tax rate is higher than the statutory rate of 21% due primarily to a deferred tax adjustment, state taxes and research credits, partially offset by non-deductible compensation expense and the realization of a capital loss.
In 2024, the effective income tax rate is higher than the statutory rate of 21% due primarily to state taxes and research credits, partially offset by non-deductible compensation expense.
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
In 2025, the effective income tax rate is higher than the statutory rate of 21% due primarily to nontaxable stock-based compensation expense, state taxes and the realization of a capital loss, partially offset by research credits and a deferred tax adjustment. The nontaxable stock-based compensation expense was reversed due to the forfeiture of our former CEO's restricted stock award pursuant to the Employment Transition Agreement.
In 2024, the Company recorded an income tax provision, despite a pre-tax loss, due primarily to the non-deductible portion of goodwill in the sale of the assets of Mosaic Group and non-deductible compensation expense, partially offset by the realization of a capital loss and research credits.
Net loss (earnings) attributable to noncontrolling interests
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025 Change
2025 2024
2025 Change
$ Change % Change $ Change % Change
(Dollars in thousands)
Net loss (earnings) attributable to noncontrolling interests $ 819 $ (765) $ 1,584 NM $ (1,418) $ (706) $ (712) (101)%
Net loss (earnings) attributable to noncontrolling interests in 2025 and 2024 primarily represents the publicly-held interest in Angi's earnings prior to the Distribution, which was completed on March 31, 2025. Net loss (earnings) attributable to noncontrolling interests for the three and six months ended June 30, 2025 also includes the allocation of losses related to a business in the Emerging & Other segment.
PRINCIPLES OF FINANCIAL REPORTING
The Company reports Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles ("GAAP"). This measure is our primary segment measure of profitability and among the metrics by which we evaluate the performance of our businesses, and our internal budgets are based and may also impact management compensation. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP results. The Company endeavors to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure, which we discuss below.
Definition of Non-GAAP Measure
Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization)is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements, if applicable. We believe this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.
Non-Cash Expenses That Are Excluded from Our Non-GAAP Measure
Stock-based compensation expenseconsists of expense associated with awards that were granted under various IAC stock and annual incentive plans that are denominated in IAC common shares and expense related to awards denominated in the equity of certain subsidiaries of the Company. These expenses are not paid in cash and we view the economic costs of stock-based awards to be the dilution to our share base; the related shares are included in our fully diluted shares outstanding for GAAP earnings per share using the treasury stock method. The Company currently settles all stock-based awards on a net basis; IAC remits the required tax-withholding on behalf of employees for net-settled awards from its current funds.
Depreciation is a non-cash expense relating to our buildings, equipment, leasehold improvements and capitalized software and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.
Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of acquisition, the identifiable definite-lived intangible assets of the acquired company are valued and amortized over their estimated lives. Value is also assigned to acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairments of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.
Gains and losses recognized on changes in the fair value of contingent consideration arrangementsare accounting adjustments to report liabilities for the portion of the purchase price of acquisitions, if applicable, that is contingent upon the financial performance and/or operating targets of the acquired company at fair value that are recognized in "General and administrative expense" in the statement of operations. These adjustments can be highly variable and are excluded from our assessment of performance because they are considered non-operational in nature and, therefore, are not indicative of current or future performance or the ongoing cost of doing business.
The following tables reconcile operating income (loss) to Adjusted EBITDA for the Company's reportable segments and net earnings (loss) attributable to IAC shareholders:
Three Months Ended June 30, 2025
Operating Income (Loss) Stock-based
Compensation
Expense 		Depreciation Amortization
of Intangibles 		Adjusted
EBITDA
(In thousands)
People Inc.
Digital $ 38,092 $ 3,034 $ 3,160 $ 18,723 $ 63,009
Print 11,184 442 1,410 3,695 16,731
Other(a)
(14,497) 3,727 651 - (10,119)
Total People Inc.
34,779 7,203 5,221 22,418 69,621
Care.com 2,972 1,165 712 990 5,839
Search 5,101 - - - 5,101
Emerging & Other (9,221) 2,874 9 - (6,338)
Corporate (33,056) 8,233 2,038 - (22,785)
Total 575 $ 19,475 $ 7,980 $ 23,408 $ 51,438
Interest expense (37,167)
Unrealized gain on investment in MGM Resorts International 307,437
Other income, net 2,828
Earnings from continuing operations before income taxes 273,673
Income tax provision (63,040)
Net earnings from continuing operations 210,633
Net earnings attributable to noncontrolling interests 819
Net earnings attributable to IAC shareholders $ 211,452
Three Months Ended June 30, 2024
Operating
Income (Loss) 		Stock-based
Compensation
Expense 		Depreciation Amortization
of Intangibles 		Adjusted
EBITDA
(In thousands)
People Inc.
Digital $ 26,025 $ 3,436 $ 3,681 $ 30,304 $ 63,446
Print 5,535 723 1,868 5,084 13,210
Other(a)
(13,222) 2,521 469 - (10,232)
Total People Inc.
18,338 6,680 6,018 35,388 66,424
Care.com (964) 1,292 1,045 1,322 2,695
Search 4,624 - 21 - 4,645
Emerging & Other (6,773) 253 13 - (6,507)
Corporate (36,714) 12,202 2,027 - (22,485)
Total (21,489) $ 20,427 $ 9,124 $ 36,710 $ 44,772
Interest expense (34,474)
Unrealized loss on investment in MGM Resorts International (179,284)
Other income, net 50,123
Loss before income taxes (185,124)
Income tax benefit 40,432
Net loss from continuing operations (144,692)
Earnings from discontinued operations, net of tax 3,225
Net loss (141,467)
Net earnings attributable to noncontrolling interests (765)
Net loss attributable to IAC shareholders $ (142,232)
Six Months Ended June 30, 2025
Operating Income (Loss)
Stock-based
Compensation
Expense(b)
Depreciation Amortization
of Intangibles 		Adjusted
EBITDA
(In thousands)
People Inc.
Digital $ 56,801 $ 4,889 $ 6,227 $ 37,447 $ 105,364
Print 19,095 892 2,810 7,389 30,186
Other(a)(c)
2,090 6,915 5,357 - 14,362
Total People Inc.
77,986 12,696 14,394 44,836 149,912
Care.com 14,656 2,155 1,417 2,105 20,333
Search 8,110 - - - 8,110
Emerging & Other (14,107) 3,219 32 - (10,856)
Corporate (50,294) (18,995) 4,083 - (65,206)
Total 36,351 $ (925) $ 19,926 $ 46,941 $ 102,293
Interest expense (65,481)
Unrealized loss on investment in MGM Resorts International (16,828)
Other income, net 10,516
Loss from continuing operations before income taxes (35,442)
Income tax benefit 16,194
Net loss from continuing operations (19,248)
Earnings from discontinued operations, net of tax 15,313
Net earnings (3,935)
Net earnings attributable to noncontrolling interests (1,418)
Net earnings attributable to IAC shareholders $ (5,353)
Six Months Ended June 30, 2024
Operating Income (Loss) Stock-based
Compensation
Expense 		Depreciation Amortization of Intangibles Adjusted
EBITDA
(In thousands)
People Inc.
Digital $ 25,845 $ 5,636 $ 8,538 $ 60,386 $ 100,405
Print 414 1,169 4,405 10,169 16,157
Other(a)
(28,750) 7,224 1,630 - (19,896)
Total People Inc.
(2,491) 14,029 14,573 70,555 96,666
Care.com 10,683 2,716 2,855 2,874 19,128
Search 8,980 - 42 - 9,022
Emerging & Other (27,854) 663 36 9 (27,146)
Corporate (74,228) 22,529 4,342 - (47,357)
Total (84,910) $ 39,937 $ 21,848 $ 73,438 $ 50,313
Interest expense (69,154)
Unrealized loss on investment in MGM Resorts International (15,533)
Other income, net 80,444
Loss before income taxes (89,153)
Income tax provision (6,095)
Net loss from continuing operations (95,248)
Loss from discontinued operations (1,247)
Net loss (96,495)
Net earnings attributable to noncontrolling interests (706)
Net loss attributable to IAC shareholders $ (97,201)
_____________________
(a) Other comprises unallocated corporate expenses.
(b) Corporate reflects the reversal of $49.8 million of previously recognized stock-based compensation expense related to the forfeiture of our former CEO's restricted stock award pursuant to the Employment Transition Agreement, partially offset by $14.9 million of stock-based compensation expense related to the transfer of 5.0 million Class B shares of Angi held by the Company, prior to the Distribution, to our former CEO, pursuant to the Employment Transition Agreement.
(c) Includes a gain of $36.2 million related to the termination of a lease for certain unoccupied office space, which otherwise would have expired in 2032.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Position
June 30, 2025 December 31, 2024
(In thousands)
People Inc. cash and cash equivalents:
United States $ 241,477 $ 230,436
All other countries 21,258 19,491
Total People Inc. cash and cash equivalents
262,735 249,927
IAC (excluding People Inc.) cash and cash equivalents
United States 803,397 1,093,675
All other countries 27,734 38,134
Total IAC (excluding People Inc.) cash and cash equivalents
831,131 1,131,809
Total cash and cash equivalents $ 1,093,866 $ 1,381,736
Debt:
Term Loan A-1 $ 350,000 $ -
Term Loan B-2 700,000 -
2032 Notes 400,000 -
Term Loan A - 297,500
Term Loan B-1 - 1,182,500
Total long-term debt 1,450,000 1,480,000
Less: current portion of long-term debt 21,000 35,000
Less: original issue discount 3,625 3,512
Less: unamortized debt issuance costs 13,043 6,481
Total long-term debt, net $ 1,412,332 $ 1,435,007
The Company's international cash can be repatriated without significant tax consequences.
All of the Company's long-term debt are liabilities of People Inc. For a detailed description of interest rate swaps and long-term debt, see "Note 3-Long-term Debt" in the accompanying notes to the financial statements included in "Item 1. Consolidated Financial Statements."
Cash Flow Information
In summary, IAC's cash flows are as follows:
Six Months Ended June 30,
2025 2024
(In thousands)
Net cash (used in) provided by:
Operating activities attributable to continuing operations $ (2,691) $ 60,155
Investing activities attributable to continuing operations $ (374,421) $ 244,038
Financing activities attributable to continuing operations $ (298,694) $ (24,098)
Net cash (used in) provided by operating activities attributable to continuing operations consists of net loss adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments include the amortization of intangibles, stock-based compensation expense, net gain on lease terminations, net loss (gain) on sales of investments and businesses (including unrealized losses on investments), depreciation, non-cash lease expense (including ROU impairments), deferred income taxes, unrealized losses on the investment in MGM and unrealized increase in the estimated fair value of a warrant.
2025
Adjustments to net loss from continuing operations consist primarily of amortization of intangibles of $46.9 million, depreciation of $19.9 million, net loss on sales of investments and a business (including unrealized losses on investments) of $18.8 million, non-cash lease expense (including ROU impairments) of $17.6 million and an unrealized loss on the investment in MGM of $16.8 million, partially offset by net gain on lease terminations of $36.1 million and deferred income taxes of $18.7 million. The decrease from changes in working capital includes a decrease in accounts payable and other liabilities of $69.6 million, a decrease in operating lease liabilities of $64.4 million and an increase in other assets of $22.6 million, partially offset by a decrease in accounts receivable of $93.6 million and an increase in deferred revenue of $7.6 million. The decrease in accounts payable and other liabilities is due primarily to a decrease in accrued employee compensation, due primarily to payment of 2024 bonuses in 2025 and severance payments at People Inc., a decrease in accrued traffic acquisition costs and related payables at Search and a payment in connection with the resolution of certain legal matters at Care.com, partially offset by an increase in a liability related to the resolution of a certain legal matter at Corporate. The decrease in operating lease liabilities is due to cash payments on leases, including $43.1 million related to the termination of a lease for certain unoccupied office space at People Inc. described under "Contractual Obligations" below, net of interest accretion. The increase in other assets is due primarily to receivables related to insurance coverage for the aforementioned legal matters, partially offset by a decrease in prepaid hosting services at People Inc. and Search. The decrease in accounts receivable is due primarily to a decrease in revenue in the second quarter of 2025 relative to the fourth quarter of 2024 at People Inc., Search and Care.com, combined with improved collections at Care.com. The increase in deferred revenue is due primarily to timing of annual subscription renewals at Care.com, partially offset by a decrease in deferred revenue at People Inc. due primarily to the timing of shipments of certain magazine titles.
Net cash used in investing activities attributable to continuing operations includes a cash distribution of $386.6 million related to the Distribution and capital expenditures of $9.1 million, partially offset by net proceeds from the sales of investments of $9.9 million and proceeds from the sale of a portion of the retirement investment fund of $8.5 million at People Inc.
Net cash used in financing activities attributable to continuing operations includes principal payments on the Term Loans of $1.4 billion and debt issuance costs to third parties and deferred financing costs of $9.9 million, partially offset by net proceeds from lenders from the Term Loans refinancing of $991.5 million and proceeds from the issuance of the 2032 Notes of $400.0 million in connection with refinancing transactions described below. Net cash used in financing activities attributable to continuing operations also includes the repurchase of 4.5 million shares of common stock, on a settlement date basis, for $200.0 million at an average price of $44.56 per share, and withholding taxes paid on behalf of employees for stock-based awards that were net settled of $54.7 million.
2024
Adjustments to net loss from continuing operations consist primarily of amortization of intangibles of $73.4 million, stock-based compensation expense of $39.9 million, depreciation of $21.8 million, non-cash lease expense of $19.8 million and an unrealized loss on the investment in MGM of $15.5 million, partially offset by a net gain on sales of businesses and investments (including unrealized losses on investments) of $28.2 million primarily related to the sale of assets at Mosaic Group in February 2024 and an unrealized increase in the estimated fair value of a warrant of $20.4 million. The increase from changes in working capital includes a decrease in accounts receivable of $57.5 million, a decrease in other assets of $43.6 million and an increase in deferred revenue of $7.3 million, partially offset by decreases in accounts payable and other liabilities of $51.1 million and operating lease liabilities of $25.9 million. The decrease in accounts receivable is due primarily to a decrease in revenue in the second quarter of 2024 relative to the fourth quarter of 2023 at People Inc. and Search, and a decrease at Mosaic Group due to cash receipts prior to the sale of its assets. The decrease in other assets is due primarily to a receipt of pre-acquisition income tax refunds at People Inc. and a decrease in prepaid hosting services at People Inc. and Corporate. The increase in deferred revenue is due primarily to timing of annual subscription renewals at Care.com. The decrease in accounts payable and other liabilities is due primarily to a decrease in accrued employee compensation, due primarily to payment of 2023 bonuses in 2024, a decrease in accrued traffic acquisition costs and related payables at Search and People Inc. and a decrease in accounts payable at Care.com due to timing of payments and at Mosaic Group due to payments prior to the sale of its assets. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion.
Net cash provided by investing activities attributable to continuing operations includes maturities of marketable debt securities of $262.5 million, net proceeds from the sales of businesses and investments of $162.2 million, including $155 million from the sale of assets of Mosaic Group, and net proceeds from the sales of assets of $12.8 million, principally from the sale of an aircraft at People Inc., and net collections on notes receivable of $10.1 million, partially offset by $197.1 million for the purchases of marketable debt securities and capital expenditures of $6.4 million.
Net cash used in financing activities attributable to continuing operations includes principal payments on the Term Loans of $15.0 million and withholding taxes paid on behalf of employees for stock-based awards that were net settled of $8.9 million.
Discontinued Operations
Net cash used in and provided by discontinued operations of $29.6 million and $40.5 million, respectively, for the six months ended June 30, 2025 and 2024, respectively, relates to the operations of Angi. The Company does not expect significant cash flows from discontinued operations following the Distribution.
Liquidity and Capital Resources
Financing Arrangements
On May 14, 2025, People Inc. entered into Amendment No. 2, which replaced $288.8 million of the then outstanding Term Loan A with $350 million of the Term Loan A-1 and provided for the new Revolving Facility of $150 million, which replaced the then existing revolving credit facility. On June 16, 2025, People Inc. completed the refinancing and replacement of its then outstanding $1.18 billion Term Loan B-1 with a combination of $700 million of the Term Loan B-2 and $400 million of the 2032 Notes. On June 16, 2025, People Inc. also entered into the Indenture, which governs the 2032 Notes, and Amendment No. 3, which governs the new Term Loan A-1, Term Loan B-2 and Revolving Facility. In addition to extending the maturity dates of People Inc.'s debt, the refinancing transactions resulted in a net decrease in debt of $21.3 million, which was funded by cash on hand.
Prior to the effectiveness of Amendment No. 2 and Amendment No. 3, Term Loan A bore interest at an adjusted term secured overnight financing rate ("SOFR") plus an applicable margin depending on People Inc.'s most recently reported consolidated net leverage ratio, each as defined in the governing agreements. The adjustment to SOFR was fixed at 0.10% under Amendment No. 1, and such adjustment was removed upon the execution of Amendment No. 2. At June 30, 2025, the Term Loan A-1 bore interest at SOFR plus 2.00%, or 6.31%, and the Term Loan B-2 bore interest at SOFR, subject to a minimum of 0.50%, plus 3.50%, or 7.82%. The applicable margin for Term Loan B-2 was unchanged under the governing agreements.
For a detailed description of long-term debt, see "Note 3-Long-term Debt" in the accompanying notes to the financial statements included in "Item 1. Consolidated Financial Statements"
Investment in MGM
At June 30, 2025, the Company owns 64.7 million common shares of MGM. Based on the number of MGM common shares outstanding at June 30, 2025, the Company owns 23.8% of MGM.
Investment in Turo
At June 30, 2025, IAC's ownership percentage in Turo is approximately 33%.
Share Repurchase Authorizations and Activity
During the six months ended June 30, 2025, IAC repurchased 4.5 million shares of its common stock, on a trade date basis, at $44.56 per share, or $200.0 million in aggregate, consisting of the remaining 3.7 million shares of its existing stock repurchase authorization from June 2020 (the "2020 Share Authorization") and 0.8 million shares of its new stock repurchase authorization of 10 million shares, which was approved by the board of directors of IAC on March 16, 2025 (the "2025 Share Authorization"). At August 1, 2025, IAC has 9.2 million shares remaining in the 2025 Share Authorization.
Share repurchases can be made over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors management deems relevant at any particular time, including, without limitation, market conditions, price and future outlook.
Contractual Obligations
At June 30, 2025, there were no material changes to the Company's contractual obligations disclosures as of December 31, 2024 included on Form 8-K filed with the Securities and Exchange Commission on June 12, 2025. As previously disclosed, during the first quarter of 2025, People Inc. entered into an agreement to terminate its lease for certain unoccupied office space, which otherwise would have expired in 2032, for a total payment of $43.1 million, consisting of equal payments paid in January and April 2025. The Company recorded a gain on the lease termination of $36.2 million in the first quarter of 2025, which is reflected in "General and administrative expense" in the statement of operations. The termination of this lease reduced future fixed lease payments by $101.7 million.
Capital Expenditures
The Company anticipates that it will need to make capital expenditures in connection with the development and expansion of its operations. The Company's 2025 capital expenditures are expected to be higher than its 2024 capital expenditures of $15.0 million by approximately 30% to 40%, due primarily to an increase related to capitalized software at People Inc.
Liquidity Assessment
On a consolidated basis, the Company generated negative cash flows from operating activities of $2.7 million for the six months ended June 30, 2025; excluding the positive cash flows from operating activities of $9.9 million generated by People Inc., the Company generated negative cash flows from operating activities of $12.6 million.
At June 30, 2025, the Company's consolidated cash and cash equivalents were $1.1 billion, of which $262.7 million was held by People Inc. The Company may not be able to freely access People Inc.'s cash due to the provisions of the People Inc. debt agreements.
The Company's consolidated debt of approximately $1.45 billion is the liability of People Inc. The governing agreements of the debt at People Inc. contain covenants that would limit People Inc.'s ability to pay dividends, incur incremental secured indebtedness or make distributions or certain investments in the event a default has occurred or if People Inc.'s consolidated net leverage ratio exceeds 4.0 to 1.0, subject to certain available amounts, all as defined in the governing agreements. People Inc.'s consolidated net leverage ratio was less than 4.0 to 1.0 for the test period ended June 30, 2025. The governing agreements also permit, among other things, IAC to contribute cash to People Inc., which the Company has in the past and may in the future, to provide, among other things, additional liquidity to improve People Inc.'s consolidated net leverage ratios for any test period. In connection with these capital contributions, People Inc. may make distributions to the Company in amounts not to exceed these capital contributions, provided that no default has occurred and is continuing. In June 2025, the Company contributed $80 million to People Inc., which People Inc. subsequently distributed to the Company in July 2025. This contribution resulted in an improvement to People Inc.'s consolidated net leverage ratio that enabled People Inc. to reduce the interest rate on the Term Loan A-1 and the commitment fee on the Revolving Facility. See "Note 3-Long-term Debt" in the accompanying notes to the financial statements included in "Item 1. Consolidated Financial Statements" for additional information.
The Company's liquidity could be negatively affected by a decrease in demand for its products and services due to adverse market or macroeconomic conditions or other factors.
The Company believes People Inc.'s existing cash, cash equivalents and expected positive cash flows from operations, and the Company's existing cash and cash equivalents, excluding People Inc., will be sufficient to fund their respective normal operating requirements, including capital expenditures, debt service, the payment of withholding taxes on behalf of employees for net-settled stock-based awards and investing and other commitments for the next twelve months, and thereafter for the foreseeable future. The Company may need to raise additional capital through future debt or equity financing to refinance its existing capital structure and make acquisitions and investments. Additional financing may not be available on terms favorable to the Company, or at all, and may also be impacted by any disruptions or volatility in the financial markets. The indebtedness at People Inc. could further limit the Company's ability to raise additional financing.
IAC Inc. published this content on August 04, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 04, 2025 at 20:14 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]