Executive Summary

Q3 revenue was $589.8M and Adjusted EBITDA was $29.1M; GAAP operating loss was $20.4M and diluted loss per share was $0.27, with losses driven by legal and severance items offset by a $17.5M unrealized gain on MGM .
People Inc. delivered its eighth straight quarter of Digital revenue growth (+9% to $269.0M) with performance marketing +38% and licensing +24%; advertising fell 3% on lower programmatic volumes amid Google AI Overviews impact .
IAC repurchased $100M of stock (2.8M shares) in Q3, $300M YTD (7.3M shares), and ended the quarter with $1.0B cash and $1.45B People Inc. long‑term debt; MGM stake: 64.7M shares (24% of MGM) valued at ~$2.1B as of 10/31/25 .
FY25 guidance updated: Total Adjusted EBITDA $234–$258M (down from prior $247–$285M) and People Inc. Adjusted EBITDA $325–$340M (lowered bottom end from $330M); Q4 outlook calls for People Digital growth +7–10%, Print −20–25%, Care revenue −7–9%, Search revenue $35–$45M .
Stock narrative catalysts: Microsoft AI licensing partnership (Publisher Content Marketplace with Copilot), rising off‑platform audience, cost actions (~6% workforce reduction), and continued buybacks; mgmt emphasized strategic focus on People Inc. and MGM and litigation against Google ad tech as a potential recovery of “hundreds of millions” in damages .

What Went Well and What Went Wrong

What Went Well

People Inc. Digital revenue grew 9% to $269.0M on 56% affiliate commerce growth and strong licensing (Apple News+, syndication) while premium ad categories like Travel/Tech/Finance held up; Digital operating income rose 22% to $37.5M .
AI monetization: People Inc. signed as a premier publisher for Microsoft’s Publisher Content Marketplace; Microsoft Copilot will be the first buyer, validating paid content models for AI use .
Capital return: IAC repurchased $100M in Q3 ($300M YTD) and highlighted perceived valuation discount versus cash and MGM stake, positioning buybacks as a core allocation tool .

Management quotes:

Barry Diller: “People and MGM are IAC… there is a huge discount in the value of our shares and a mind blowing discount in the value of MGM” .
Neil Vogel: “Our AI conversations are heating up… Microsoft has committed to paying for content… Copilot is going to be the first buyer” .

What Went Wrong

Advertising revenue declined 3% as Core Sessions fell 6% YoY; the increasing prominence of Google AI Overviews reduced search‑driven impressions, though off‑platform views grew strongly .
Emerging & Other recorded $21M in legal fees/settlement costs, driving segment to −$20.0M Adjusted EBITDA; Q3 “Other expense, net” also included a $32.6M adverse verdict tied to a 2015 real estate gain .
Care.com profitability compressed (Adj. EBITDA $7.8M, −57% YoY) on higher S&M spend (rebrand), lease impairment ($2.5M), and severance ($1.0M); Enterprise revenue softened on employer budget tightening .

Financial Results

Consolidated YoY

Metric	Q3 2024	Q3 2025
Revenue ($USD Millions)	$642.0	$589.8
Operating Income ($USD Millions)	$8.1	$(20.4)
Net Loss ($USD Millions)	$(243.7)	$(21.9)
Diluted EPS (Continuing Ops, $USD)	$(3.33)	$(0.27)
Adjusted EBITDA ($USD Millions)	$71.6	$29.1

Sequential Trend (last three quarters)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$570.5*	$586.9*	$589.8
Operating Income ($USD Millions)	$35.7*	$0.7*	$(20.4)
Diluted EPS (Continuing Ops, $USD)	$(2.97)*	$2.72*	$(0.27)
EBITDA Margin (%)	12.47%*	5.46%*	2.05%*
Net Income Margin (%)	−38.00%*	36.03%*	−3.71%*

Values with asterisk (*) retrieved from S&P Global.

Estimates vs Actual (S&P Global consensus, Q3 2025)

Metric	Consensus	Actual	# of Estimates
Revenue ($USD)	$600,974,440	$589,793,000	11
Primary EPS ($USD)	$0.1009	$(0.3657)	3
EBITDA ($USD)	$51,018,330	$12,109,000	—

Values retrieved from S&P Global.

Significance:

Revenue: Missed by ~$11.2M (−1.9%) versus consensus.
EPS: Missed by ~$0.47; GAAP diluted EPS (continuing ops) −$0.27 differs from S&P “Primary EPS” construct .
EBITDA: Missed materially versus consensus (actual $12.1M vs $51.0M).

Segment Performance (Revenue and Profitability)

Segment	Q3 2024 Revenue ($M)	Q3 2025 Revenue ($M)	YoY	Q3 2024 Adj. EBITDA ($M)	Q3 2025 Adj. EBITDA ($M)	YoY
People Inc. (Total)	$439.5	$429.8	−2%	$68.6	$65.0	−5%
– Digital	$246.4	$269.0	+9%	$66.4	$64.0	−4%
– Print	$198.5	$169.0	−15%	$14.6	$7.3	−50%
Care.com	$95.7	$90.8	−5%	$18.1	$7.8	−57%
Search	$88.3	$51.9	−41%	$2.5	$1.9	−23%
Emerging & Other	$18.6	$17.3	−7%	$(2.1)	$(20.0)	NM
Corporate (Adj. EBITDA)	—	—	—	$(15.5)	$(25.5)	−65%

KPIs and Operating Metrics

KPI	Q3 2024	Q3 2025
People Inc. Advertising Revenue ($M)	$165.6	$161.2
People Inc. Performance Marketing ($M)	$52.3	$72.4
People Inc. Licensing & Other ($M)	$28.5	$35.4
People Inc. Total Sessions (M)	2,675	2,377
People Inc. Core Sessions (M)	2,297	2,168
Care.com Consumer Revenue ($M)	$46.3	$44.5
Care.com Enterprise Revenue ($M)	$49.4	$46.4
Ask Media Group Revenue ($M)	$72.6	$42.8
Desktop (legacy) Revenue ($M)	$15.7	$9.1

Non‑GAAP exclusions and effects:

“Certain Items” totaled $34.8M in Q3 (People severance $15.2M partially offset by $5.2M lease gain; Care lease impairment $2.5M and severance $1.0M; Emerging & Other legal $21.4M). Ex‑items: operating income $14.4M; Adjusted EBITDA $63.9M .

Balance sheet and cash:

Cash & equivalents: $1,005.5M; long‑term debt: $1,406.8M (People Inc.), net leverage <4.0x per credit agreement; shares outstanding 77.4M as of 9/30/25 .
Nine‑month FCF: $13.5M (operating cash flow $27.5M; capex $14.0M), down from $114.5M YoY on working capital and lease amendment payments .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
IAC Total Adjusted EBITDA ($M)	FY 2025	$247–$285	$234–$258	Lowered
People Inc. Adjusted EBITDA ($M)	FY 2025	$330–$340	$325–$340	Lowered bottom end
People Inc. Operating Income ($M)	FY 2025	N/A	$180–$200	New
People Inc. Stock‑based comp ($M)	FY 2025	N/A	$25–$30	New
People Inc. Depreciation ($M)	FY 2025	N/A	$25	New
People Inc. Amortization ($M)	FY 2025	N/A	$90	New
Q4 People Inc. Digital Rev. Growth	Q4 2025	N/A	+7–10%	New
Q4 People Inc. Print Revenue	Q4 2025	N/A	−20–25% YoY	New
Q4 Care.com Revenue	Q4 2025	N/A	−7–9% YoY	New
Q4 Search Revenue ($M)	Q4 2025	N/A	$35–$45	New
Q4 Emerging & Other Revenue ($M)	Q4 2025	N/A	~ $16	New
Corporate FY25 Adj. EBITDA ($M)	FY 2025	$110–$115	$(115)	Updated format

Notes: People Inc. FY25 Adjusted EBITDA excludes ~$41M lease gains (Q1 & Q3) and $15M Q3 severance costs .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 2025)	Current Period (Q3 2025)	Trend
AI/technology initiatives	OpenAI licensing; Decipher+ buildout; cookies de‑prioritization; AI use across portfolio (Care, Vivian)	Microsoft AI marketplace launch; Copilot as first buyer; continued OpenAI model; Decipher+ to be meaningful in 2026	Accelerating monetization
Google search/AI Overviews	Strategy to reduce Google dependency; non‑Google sessions CAGR +29%; AI Overview presence rising; programmatic softness	Core Sessions −6%; ad revenue −3% on lower volumes; Google AI Overviews on ~top keywords; off‑platform views +66% YoY	Headwind persists; mitigation via off‑platform
Regulatory/legal (Google ad tech)	Evaluating DOJ ad tech outcomes; publisher suits (Daily Mail/Gannett); considering participation	IAC/People Inc. pursuing litigation; judge accelerates case; ~$4M Q4 legal spend; seeking “hundreds of millions” in damages	Intensifying pursuit
Capital allocation & buybacks	$200M buyback in Q1; ongoing evaluation of M&A vs buybacks	$100M Q3; $300M YTD; focus on opportunistic buybacks in IAC and MGM; slimming non‑core	Ongoing; bias to buybacks
Macro/advertising	Premium stable; programmatic flat; tariff uncertainty	Ad market “solid” but mixed; high‑end consumer strong; Travel/Tech strong; CPG/F&B challenged	Mixed, cautiously constructive
Off‑platform audience	Building off‑platform reach across Apple News, YouTube, TikTok; Decipher	Off‑platform views +43–66% YoY; Feedfeed acquisition to deepen influencer reach	Growing
Cost actions	Corporate cost rationalization; access to People Inc. cash post leverage <4x	~6% workforce reduction at People; ~$60M run‑rate savings (about half to reinvest)	Executing

Management Commentary

Strategic focus: “We’ll get lean and crystal clear that People and MGM are IAC until something else wildly compelling comes along” .
MGM thesis: “Everything else in MGM is trading at less than three times EBITDA… it will not continue” .
AI marketplace: “We are physically in the room with Microsoft… Copilot is going to be the first buyer… both à la carte and ‘all‑you‑can‑eat’ models can be viable” .
Cost/investment: “$60M run rate savings—think half realized in margins, half reinvested in high‑ROI digital activities” .
Legal: “We seek to recover hundreds of millions of dollars in damages” (Google ad tech case) .

Q&A Highlights

MGM value via IAC: Owning MGM “cheaper” through IAC given implied negative value on private holdings; buybacks continue .
One‑time items: Q3 severance and lease gain at People; Care impairment/severance; legacy legal matter concluded; forward costs negligible .
Google litigation: Case timing accelerated; ~$4M spend in Q4; opportunity for substantial damages .
Off‑platform margins: Incremental Digital EBITDA margins on off‑platform “neutral to slightly accretive” relative to ~28–30% digital margin .
Outlook: Solid Q4 despite session headwinds; licensing and performance marketing to support growth .

Estimates Context

Q3 actuals vs S&P consensus: Revenue missed by ~1.9% ($589.8M vs $601.0M); EPS missed by ~$0.47 (Primary EPS −$0.366 vs $0.101); EBITDA missed materially ($12.1M vs $51.0M). Management emphasized the distorting impact of one‑time legal and severance items on GAAP and Adjusted EBITDA .
Values retrieved from S&P Global.

Implications: Street models likely to revise lower for FY25 consolidated Adjusted EBITDA and Care enterprise trajectory; People Inc. FY25 range narrowed but preserves high end, reflecting resilience in non‑sessions revenue and licensing .

Key Takeaways for Investors

People Inc. continues to demonstrate durable Digital growth (+9%) despite search disruption; watch sustained momentum in licensing, commerce, and Decipher+ ramp into 2026 .
The Microsoft AI marketplace deal is a tangible step toward recurring AI content monetization; look for additional AI licensing updates over coming quarters .
Near‑term profit headwinds stem from discrete legal/severance items; ex‑items Q3 Adjusted EBITDA would have been $63.9M—track Q4 legal spend and margin recovery .
Care.com shows consumer stabilization but enterprise headwinds; FY25 Adj. EBITDA guided to $45–$50M—monitor Q4 declines (−7–9%) and 2026 return to growth plan .
Search remains structurally pressured (−41% YoY); focus shifts to off‑platform audience growth and premium direct monetization .
Capital allocation remains supportive (buybacks $300M YTD) with mgmt intent to streamline non‑core holdings; potential for discount narrowing catalysts .
MGM stake is a key value lever; mgmt sees “emergency” multiple and potential value realization over time; IAC’s combined strategy offers optionality .

Notes:  
- All document-based figures cited directly from IAC’s Q3 2025 Form 8-K and earnings presentation/transcript [1:x], [2:x], [3:x], and related press releases **[1800227_20251103NY13775:0]** **[1800227_20251008NY93200:0]** **[1800227_2b45ba3748c6492aaeda903f4258fa3b_0]** **[1800227_2dc281ddb81541559f876f4aceb0d092_0]**.  
- S&P Global consensus and actuals table values are retrieved from S&P Global.

IAC Inc. (IAC)·Q3 2025 Earnings Summary