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IAC Inc. (IAC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered mixed results: consolidated revenue declined 7% year over year to $586.9M and missed consensus, while Adjusted EBITDA rose 15% to $51.4M; diluted EPS swung to $2.57, largely driven by a $307.4M unrealized gain on MGM, masking underlying operating volatility .
  • People Inc. (formerly Dotdash Meredith) accelerated digital revenue growth to 9% ($260.4M) and boosted operating income 90% to $34.8M; however, digital margins compressed as management invested in D/Cipher+, the PEOPLE app, and product enhancements, with EBITDA flat year-over-year at $63M .
  • Guidance was refined: consolidated FY25 Adjusted EBITDA tightened to $247–$285M; People Inc. EBITDA range to $330–$340M (lowered high end), with Q3 guide for digital revenue growth of 7–9% and EBITDA of $68–$73M .
  • Consensus vs. actual: revenue ($586.9M vs. $601.4M*), EPS (−$0.306 vs. −$0.041*), EBITDA ($32.1M vs. $43.9M*)—a broad miss on SPGI definitions; note IAC reports Adjusted EBITDA of $51.4M, not directly comparable to SPGI EBITDA *.
  • Catalysts: People Inc. rebrand and off-platform/licensing growth, debt refinancing extending maturities to 2030/2032, continued care.com product relaunch momentum, and MGM’s strong BetMGM trends lifting IAC’s mark-to-market EPS noise .

What Went Well and What Went Wrong

What Went Well

  • People Inc. digital revenue up 9% to $260.4M, accelerating from Q1, with advertising +5%, performance marketing +14% and licensing +23%; operating income rose 90% to $34.8M .
  • Consolidated Adjusted EBITDA increased 15% to $51.4M; corporate operating loss improved by $3.7M amid cost control .
  • Successful refinancing of $1.47B People Inc. debt extended maturities to 2030/2032, with a 6.5-year weighted average maturity and 7.4% borrowing cost, improving flexibility .
  • Quote: “Our appetite to put our cash to work is as strong as ever… Unconstrained, we intend to…unlock shareholder value.” – Barry Diller .

What Went Wrong

  • Consolidated revenue declined 7% YoY to $586.9M, missing consensus; Search revenue fell 39% to $61.7M, and Care.com revenue declined 6% to $82.0M .
  • People Inc. digital EBITDA held flat ($63.0M) despite 9% revenue growth; margins compressed to ~24% due to increased investments in new products and channels, with management guiding margin rebuild later in the year .
  • Free cash flow for 1H25 negative $11.8M, driven by unfavorable working capital and higher capex; operating cash flow fell to −$2.7M for six months .

Financial Results

Consolidated QoQ and YoY Overview

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$989.3 $570.5 $586.9
Adjusted EBITDA ($USD Millions)$142.0 $50.9 $51.4
Diluted EPS ($USD)$(2.39) $(2.64) $2.57
MetricQ2 2024Q2 2025
Revenue ($USD Millions)$634.4 $586.9
Adjusted EBITDA ($USD Millions)$44.8 $51.4
Operating Income ($USD Millions)$(21.5) $0.6
Diluted EPS ($USD)$(1.71) $2.57

Consensus vs Actual (SPGI definitions; not directly comparable to IAC Adjusted metrics)

MetricQ2 2025 ConsensusQ2 2025 ActualResult
Revenue ($USD)$601.4M*$586.9M Miss
Primary EPS ($USD)$(0.041)*$(0.306)*Miss
EBITDA ($USD)$43.9M*$32.1M*Miss
# of EPS Estimates5*——
# of Revenue Estimates13*——

Values retrieved from S&P Global.*

Segment Performance (Q2 2025 vs Q2 2024)

SegmentRevenue Q2'24 ($M)Revenue Q2'25 ($M)Adj. EBITDA Q2'24 ($M)Adj. EBITDA Q2'25 ($M)Op Inc Q2'24 ($M)Op Inc Q2'25 ($M)
People Inc.$425.2 $427.4 $66.4 $69.6 $18.3 $34.8
Care.com$87.7 $82.0 $2.7 $5.8 $(1.0) $3.0
Search$101.8 $61.7 $4.6 $5.1 $4.6 $5.1
Emerging & Other$19.9 $15.9 $(6.5) $(6.3) $(6.8) $(9.2)
Corporate——$(22.5) $(22.8) $(36.7) $(33.1)
Total$634.4 $586.9 $44.8 $51.4 $(21.5) $0.6

People Inc. Revenue Composition and Digital Metrics (Q2 2025)

CategoryQ2 2024 ($M)Q2 2025 ($M)
Digital Revenue$238.1 $260.4
Print Revenue$191.7 $173.5
Advertising Revenue$153.4 $161.2
Performance Marketing$53.5 $61.1
Licensing & Other$31.1 $38.1
Total Sessions (M)2,573 2,444
Core Sessions (M)2,165 2,202

Care.com Revenue Split (Q2 2025)

CategoryQ2 2024 ($M)Q2 2025 ($M)
Consumer$47.6 $43.4
Enterprise$40.1 $38.6
Total$87.7 $82.0

Search Revenue Split (Q2 2025)

CategoryQ2 2024 ($M)Q2 2025 ($M)
Ask Media Group$84.3 $51.4
Desktop$17.5 $10.2
Total$101.8 $61.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
People Inc. Adjusted EBITDA ($M)FY 2025$330–$350 $330–$340 Lowered high end
Consolidated Adjusted EBITDA ($M)FY 2025$240–$295 $247–$285 Tightened range
Corporate Adjusted EBITDA ($M)FY 2025$(120)–$(110) $(115)–$(110) Improved low end
Search Adjusted EBITDA ($M)FY 2025$10–$15 $12–$15 Raised low end
Care.com Adjusted EBITDA ($M)FY 2025$45–$55 $45–$55 Maintained
Total Operating Income ($M)FY 2025$75–$150 $82–$140 Narrowed
People Inc. Digital Revenue GrowthQ3 20257–9% (implied) 7–9% Maintained
People Inc. Adjusted EBITDA ($M)Q3 2025$67–$73 $68–$73 Slightly higher low end
Care.com Adjusted EBITDA ($M)Q3 2025$3–$5 $6–$10 (incl. ~$3M impairment) Raised
Search Adjusted EBITDA ($M)Q3 2025$4–$5 $3–$4 Lowered
Emerging & Other Adj. EBITDA ($M)Q3 2025$(10)–$(5) $(10)–$(5) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24)Previous Mentions (Q1’25)Current Period (Q2’25)Trend
AI/data targetingOpenAI licensing added; D/Cipher discussed; premium ad performance PEOPLE app launch; D/Cipher expansion with new leadership D/Cipher+ expands addressable market 4–5x; CTV targeting opportunity; licensing and Apple News+ strength Expanding scope, off-platform monetization increasing
Search exposure/GoogleCore Sessions +3% YoY in Q4; programmatic rates up Core Sessions −3% YoY; programmatic impressions impacted Google share of sessions declined from 52% to 28%; non-Google sessions +29% CAGR; diversification emphasized Diversifying away from Google; mitigates AI/SERP risks
Product initiativesPEOPLE app, MyRecipes ramp Care.com product overhaul planned Investments in PEOPLE app and MyRecipes; Care.com relaunch with improved search/messaging; early stabilization Execution progressing; near-term margin impact
Licensing/Off-platformLicensing +19% (Q4) Licensing +30% (Q1) Licensing +23% (Q2); full quarter of OpenAI benefits Sustained growth tailwind
Care.comEnterprise +18% in Q4; legal accruals impacted EBITDA Enterprise +3%; consumer −9% Consumer −9%; Enterprise −4%; EBITDA +117% to $5.8M; brand/product relaunch; early positive metrics Early turn signals; watch conversion/retention KPIs
Regulatory/legalLegal accruals at Care.com (Q4) Corporate one-time costs (ETA, spin) Corporate costs lower; some legacy legal fees in Emerging & Other Normalizing, some residual headwinds

Management Commentary

  • Barry Diller on capital allocation: “We may have been quiet on capital allocation this quarter but don’t mistake silence for inertia…Unconstrained, we intend to…unlock shareholder value.”
  • CFO on People Inc. margins: “Q2 digital EBITDA was essentially flat…representing a 24% margin…the increased cost…derived heavily from strategic investments…we expect ROI…margins in the 25–28% range in Q3 and back to real margin scale in Q4.”
  • CEO (People Inc.) on reducing Google dependency: “We have a term…Google zero…if Google no longer sends us traffic…we’re going to be very healthy…we’ve added incredible off platform audiences…D/Cipher…expands our addressable market by 4–5x.”
  • CFO on care.com relaunch: “New Care experience…enhanced messaging and matching…held off on marketing until the product was ready…we have seen core consumer metrics…achieve stability and growth for the first time since 2022.”

Q&A Highlights

  • Guidance and margin clarity: Management reiterated People Inc. digital revenue growth of 7–9% for Q3 and expects digital margins to rebuild to 25–28% with EBITDA growth resuming, highlighting ROI from D/Cipher+, PEOPLE app, and MyRecipes .
  • People Inc. investment cadence: Elevated spend in new products and channels explained the near-term margin compression; management expects stronger margin scale in Q4 as revenue scales seasonally .
  • Care.com trajectory: Relaunch and marketing reboot driving early stabilization in consumer KPIs; focus areas include pricing/packaging and expansion in Senior/Pet care to reignite revenue growth and incremental margins .

(Note: The transcript Q&A section could not be fully retrieved due to a database inconsistency; highlights above reflect guidance clarifications and management responses captured in available portions.)

Estimates Context

  • Q2 2025 actuals missed SPGI consensus on revenue ($586.9M vs. $601.4M*), EPS (−$0.306 vs. −$0.041*), and EBITDA ($32.1M vs. $43.9M*), signaling weaker-than-expected profitability under SPGI’s definitions despite IAC’s reported Adjusted EBITDA growth *.
  • Street models likely need to adjust for: continued Search weakness, People Inc. margin investment phase in H2, and care.com gradual ramp; offset by licensing/off-platform strength and cost discipline in Corporate .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term: Expect stock narrative to focus on People Inc.’s accelerating digital growth versus margin compression; watch Q3 EBITDA/margin progression to validate ROI from D/Cipher+, PEOPLE app, and MyRecipes .
  • Consensus: Broad Q2 misses on SPGI metrics increase scrutiny; models should normalize for non-operating MGM mark-to-market and reflect segment divergence (Search pressure; Care.com early turn) *.
  • Balance sheet: People Inc. refinancing extends maturities and improves flexibility; IAC holds $1.1B cash and an MGM stake marked ~$2.3B as of 8/1/25, enabling opportunistic capital deployment/buybacks (9.2M shares authorization remaining) .
  • Guidance: FY25 EBITDA range tighter; People Inc. high end trimmed—monitor Q3 delivery (digital revenue +7–9%, EBITDA $68–$73M) and Q4 seasonal margin scale .
  • Care.com: Product/brand overhaul is the key swing factor; sustained KPI stabilization and conversion will be a medium-term margin lever .
  • Strategic value: Off-platform/licensing growth reduces reliance on Google and mitigates AI/SERP risk; supports multi-channel monetization and brand durability .
  • EPS volatility: MGM unrealized gains/losses drive GAAP EPS; focus on operating metrics (Adjusted EBITDA, segment OI) for core performance assessment .
Footnote: Values marked with * are retrieved from S&P Global consensus/actuals via GetEstimates and may reflect metric definitions (e.g., EBITDA) that differ from IAC’s reported non-GAAP Adjusted EBITDA.

Additional Reference Data

  • Liquidity snapshot (6/30/25): Cash & equivalents $1.1B (IAC $831M; People Inc. $263M), long-term debt $1.45B (People Inc.), weighted average borrowing cost 7.4%, net consolidated leverage <4.0x at People Inc. .
  • Free cash flow (6M ended 6/30/25): Operating cash flow −$2.7M; FCF −$11.8M due to working capital and capex, partially offset by higher Adjusted EBITDA .
  • Share repurchases: 9.2M shares remaining in authorization as of 8/1/25; $200M repurchased YTD by Q1 .