Executive Summary

Q1 2025 revenue was $570.5M (-9% YoY) with operating income of $35.8M; GAAP diluted EPS was -$2.64, driven largely by a $324.3M unrealized loss on MGM, while Adjusted EBITDA was $50.9M, aided by a $36M non-cash lease-termination gain at DDM .
Versus S&P Global consensus, revenue was essentially in line (miss by ~$0.7M), EPS missed, and EBITDA (unadjusted) exceeded the low estimate base; DDM Digital grew 7% with strong licensing (+30%) and performance marketing (+11%), while Search fell 35% YoY and Care.com declined 4% .
IAC completed the Angi spin on Mar 31 and repurchased 4.5M shares for $200M; it also added a new 10M share authorization and reaffirmed FY25 Adjusted EBITDA guidance across businesses (post-Angi) of $240–$295M .
Near-term catalysts include continued share repurchases, DDM execution (PEOPLE app, MyRecipes, D/Cipher Plus), and active M&A; Q2 guide: DDM Digital +7–9% and EBITDA $67–$73M, Care.com revenue -5% to -8% with EBITDA $3–$5M, Search revenue $75–$80M .

What Went Well and What Went Wrong

What Went Well
- DDM execution: Digital revenue +7% to $224.2M; licensing +30% (OpenAI, Apple News+), performance marketing +11% (affiliate commerce +26%); Adjusted EBITDA +166% to $80.3M including a $36M lease-termination gain; Digital Adjusted EBITDA +15% to $42.4M .
- Capital allocation/action: Completed Angi spin; repurchased 4.5M shares ($200M); new 10M share buyback authorization; reiterated FY25 Adjusted EBITDA across businesses (post-spin) .
- Management tone on value/capital: “Our shares are still trading for less than the value of our 23% stake in MGM and the $900 million of cash…our businesses…are trading at an implied value of negative $100 million” (Halpin), with willingness to deploy capital via buybacks and M&A .
What Went Wrong
- Consolidated top line pressure: Revenue -9% YoY; Search -35% on lower traffic acquisition and legacy Desktop decline; Care.com -4% on weaker Consumer subscriptions .
- Programmatic softness: Premium ad demand generally stable, but programmatic pricing turned flattish; lower impressions from core traffic -3% and higher premium penetration reduced programmatic inventory .
- GAAP loss optics: Diluted EPS -$2.64 due to a $324.3M unrealized loss on MGM; free cash flow -$4.6M in the quarter on working capital and lease-termination cash payment timing .

Financial Results

Consolidated P&L snapshot (quarters)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$938.7	$989.3	$570.5
Operating Income ($M)	$16.3	$50.6	$35.8
Adjusted EBITDA ($M)	$107.4	$142.0	$50.9
Diluted EPS ($)	-$2.93	-$2.39	-$2.64

Q1 2025 vs Prior Year and Estimates

Metric	Q1 2024	Q1 2025 Actual	S&P Global Consensus	Surprise
Revenue ($M)	$624.3	$570.5	$571.2*	Slight miss (~$0.7M)
EBITDA ($M, unadjusted OpInc+D&A)	N/A	$71.2 (OpInc + D&A calc)	$0.7*	Beat (estimate base very low)
Adjusted EBITDA ($M)	$5.5	$50.9	N/A	n/a
Diluted EPS ($)	$0.51	-$2.64	-$4.46*	Miss (less negative EPS than consensus but still below)

Values marked with * are retrieved from S&P Global.
S&P Global estimate counts: Revenue (5), EPS (1), indicating limited coverage depth for Q1 2025.

Segment revenue and profitability (Q1 2025)

Segment	Revenue ($M)	YoY	Operating Inc (Loss) ($M)	Adjusted EBITDA ($M)
DDM (Total)	$393.1	+1%	$43.2	$80.3
• Digital	$224.2	+7%	$18.7	$42.4
• Print	$173.8	-7%	$7.9	$13.5
Care.com	$88.9	-4%	$11.7	$14.5
Search	$70.3	-35%	$3.0	$3.0
Emerging & Other	$18.3	-46%	-$4.9	-$4.5
Intersegment Eliminations	-$0.1	96%	—	—

KPIs and mix (Q1 2025 vs Q1 2024)

Category	Q1 2024	Q1 2025	YoY
DDM Digital – Advertising Rev ($M)	$132.9	$134.6	+1%
DDM Digital – Performance Marketing Rev ($M)	$51.5	$57.3	+11%
DDM Digital – Licensing & Other Rev ($M)	$24.9	$32.4	+30%
DDM – Total Sessions (M)	2,750	2,484	-10%
DDM – Core Sessions (M)	2,273	2,211	-3%
Care.com – Consumer Rev ($M)	$52.3	$47.5	-9%
Care.com – Enterprise Rev ($M)	$40.2	$41.3	+3%
Search – Ask Media Group Rev ($M)	$90.0	$57.7	-36%
Search – Desktop Rev ($M)	$18.5	$12.6	-32%

Guidance Changes

Metric	Period	Previous Guidance (Q4 2024)	Current Guidance (Q1 2025)	Change
Adjusted EBITDA – DDM ($M)	FY 2025	$330–$350	$330–$350	Maintained
Adjusted EBITDA – Care.com ($M)	FY 2025	$45–$55	$45–$55	Maintained
Adjusted EBITDA – Search ($M)	FY 2025	$10–$15	$10–$15	Maintained
Adjusted EBITDA – Emerging & Other ($M)	FY 2025	($25)–($15)	($25)–($15)	Maintained
Adjusted EBITDA – Corporate ($M)	FY 2025	($150)–($130)	($120)–($110)	Raised (less negative)
Adjusted EBITDA – Total ($M)	FY 2025	$345–$425 (incl. Angi)	$240–$295 (ex-Angi after spin)	Restated post-spin
DDM Digital Revenue Growth	Q2 2025	n/a	+7% to +9%	New Q2 detail
DDM Adjusted EBITDA ($M)	Q2 2025	n/a	$67–$73	New Q2 detail
Care.com Revenue	Q2 2025	n/a	-5% to -8%	New Q2 detail
Care.com Adjusted EBITDA ($M)	Q2 2025	n/a	$3–$5	New Q2 detail
Search Revenue ($M)	Q2 2025	n/a	$75–$80	New Q2 detail
Search Adjusted EBITDA ($M)	Q2 2025	n/a	$4–$5	New Q2 detail
Emerging & Other – Rev ($M)	Q2 2025	n/a	~ $15	New Q2 detail
Emerging & Other – EBITDA ($M)	Q2 2025	n/a	($5)–($10)	New Q2 detail

Note: FY25 total changed due to Angi spin-off; Corporate improved given Q1 concentration of non-recurring items .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
DDM Digital momentum	Q3: Digital +16% with premium strength; OpenAI licensing added; Core Sessions +14% . Q4: Digital +10%; OpenAI, Apple News+ benefits; 4 consecutive double-digit growth quarters .	Digital +7%; premium stable; programmatic flattish; licensing +30%; performance marketing +11% .	Growth moderating; mix shift to premium/licensing; programmatic soft.
AI & D/Cipher	Q4: OpenAI partnership cited .	D/Cipher Plus to expand off-network targeting; Jim Lawson named President; D/Cipher in >50% of premium deals; +60% deal size uplift; cookies delay neutral-to-positive .	Scaling commercialization; leadership hire; advertiser uptake rising.
Macro/advertising	Q4: Solid premium; programmatic tailwinds then .	Premium demand stable; programmatic pricing flat; categories: pharma/tech/beauty strong; F&B weaker; tariff uncertainty monitored .	Mixed; caution on macro/tariffs; stable premium.
Search	Q3/Q4: declines tied to lower TAC and traffic; contract with Google renewed to 3/31/26 .	Search -35% YoY on lower TAC and Desktop decline ; Google contract renewed; AI overview affecting ~1/3 of searches with modest impact given diversified traffic .	Stabilization focus with renewed contract; volume headwinds persist.
Care.com	Q3: Emerging & Other included Care (-6% YoY) . Q4: Breakout as segment; Enterprise +18%, Consumer -10% .	Consumer softness persists (-9%); product roadmap: matching, messaging, search; pricing/packaging; scaled marketing in 2H’25; 2026 growth aim .	Rebuild underway; 2H’25 inflection targeted.
Capital allocation	Q4: Angi spin plan; leverage <4x at DDM .	Angi spin completed; $200M buybacks; $900M corporate cash; active M&A pipeline; NOLs ~$800M .	Offensive posture; buybacks + M&A optionality.
Governance/activism	—	Board to add Tor R. Braham after Arkhouse engagement .	Governance enhancements in process.

Management Commentary

“Q1 was a solid start to the year... Angi is officially on its own... we are deploying capital... repurchase of 4.5 million shares... reaffirming full year 2025 adjusted EBITDA guidance across all of IAC.” – Christopher Halpin .
“Our shares are still trading for less than the value of our 23% stake in MGM and the $900 million of cash... implied value of negative $100 million [for] wholly owned businesses… We obviously think this represents a massive value disconnect.” – Christopher Halpin .
“Premium demand has remained generally stable... programmatic pricing... running flat year-over-year... we’re reaffirming our adjusted EBITDA guidance... with the core assumption of no significant recession.” – Christopher Halpin .
“D/Cipher Plus… allows us… to target the whole web... core D/Cipher business now is in more than half of our premium deals… those deals are 60+% bigger.” – Neil Vogel .
“Cookies… I don’t think it’s that big of a deal at all… we’re neutral on this… it might help us… we can outcompete other offerings.” – Neil Vogel .

Q&A Highlights

Capital allocation: $200M buybacks executed; ~$900M corporate cash; balancing additional repurchases with active M&A amid private-market liquidity needs; ability to “walk and chew gum” on buybacks and M&A (Halpin) .
Premium vs programmatic: Premium stable; programmatic soft (pricing flattish, lower inventory due to fewer impressions and higher premium penetration); potential impact from removal of de minimis advertisers in the broader market (Vogel/Halpin) .
D/Cipher commercialization: Jim Lawson appointment to scale D/Cipher Plus; over half of premium deals use D/Cipher with meaningfully larger deal sizes; 2026 cited as a bigger revenue driver timing .
Care.com path: 2025 focus on matching, messaging, search, fulfillment; pricing/packaging evolution; step-up marketing aligned with product readiness in Q3/Q4; 2026 growth targeted (Halpin) .
Cash mobility: DDM leverage below 4.0x allows upstreaming cash to IAC, increasing flexibility (Halpin) .

Estimates Context

Q1 2025 (S&P Global): Revenue $571.2M (5 ests) vs actual $570.5M; EBITDA (OpInc+D&A) $0.7M vs actual $71.2M; Primary EPS -$4.46 (1 est) vs actual -$2.64. Limited estimate counts, especially for EPS and EBITDA, reduce reliability of consensus comparisons. Adjusted EBITDA is IAC’s primary profitability measure (actual $50.9M) . Values retrieved from S&P Global.*

Key Takeaways for Investors

DDM remains the growth/profit engine: Digital +7% with strong licensing/commerce and premium stability; watch D/Cipher Plus commercialization and PEOPLE/MyRecipes traction for incremental growth .
Programmatic headwinds vs premium resilience: Expect mix-driven monetization (premium/licensing/commerce) to offset programmatic softness; Q2 Digital guide +7–9% reflects caution on macro/tariffs .
Care.com execution story: 2H’25 product/packaging ramp precedes a 2026 growth goal; near-term revenue declines guide (-5% to -8% in Q2) while investing for product-market fit .
Search stabilization a watch item: Contract renewed with Google; volume still pressured; Q2 revenue guided $75–$80M with modest EBITDA contribution .
Capital allocation and sum-of-parts: Significant buybacks, new authorization, robust cash, and potential catalysts (M&A/divestitures) underpin management’s view of valuation disconnect vs MGM stake and cash .
Guidance steady post-spin: FY25 Adjusted EBITDA ranges maintained by business lines; Corporate guide improved given front-loaded non-recurring costs; Q2 segment guide provides clearer near-term yardsticks .
Trading lens: Near term, narrative hinges on DDM Q2 delivery (Digital +7–9%), ad market resilience, and early D/Cipher Plus wins; medium term, Care.com execution and capital deployment could re-rate the equity if valuation discount narrows .

IAC Inc. (IAC)·Q1 2025 Earnings Summary