10-K: IAC Inc. Announces Plan to Spin Off Angi as Revenue Declines in 2024

IAC Inc. reports a decrease in revenue for 2024 and announces a plan to spin off its full stake in Angi Inc.

Summary

• IAC Inc. reported a 13% decrease in revenue, totaling $3.8 billion for the year ended December 31, 2024, compared to $4.4 billion in 2023.
• The company's board of directors has approved a plan to spin off its full stake in Angi Inc. to IAC shareholders, expected to be completed as soon as March 31, 2025.
• Dotdash Meredith's revenue increased by 5% to $1.8 billion, with digital revenue up 13% and print revenue down 4%.
• Angi's revenue decreased by 13% to $1.2 billion, with declines in both Ads and Leads (14%) and Services (21%), partially offset by an increase in International (11%).
• Care.com's revenue decreased slightly by 1% to $369.6 million, with a decrease in consumer revenue offset by an increase in enterprise revenue.
• Search revenue decreased by 38% to $387.7 million, primarily due to a decrease in revenue from Ask Media Group.
• Emerging & Other revenue decreased by 72% to $89.0 million, mainly due to the sale of Mosaic Group and Roofing.
• The company's operating loss was $4.2 million, compared to an operating loss of $260.8 million in the previous year.
• IAC's Adjusted EBITDA increased by 13% to $379.7 million.
• The company's net loss attributable to IAC shareholders was $539.9 million, compared to net earnings of $265.9 million in the previous year.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are some positive aspects, such as the growth in Dotdash Meredith's digital revenue and the increase in Adjusted EBITDA, the overall tone is negative due to the decline in total revenue and the net loss attributable to IAC shareholders. The announcement of the Angi spin-off adds uncertainty.

Positives

• Dotdash Meredith's digital revenue increased by 13%, indicating growth in the digital publishing sector.
• Adjusted EBITDA increased by 13%, suggesting improved operational efficiency.
• The company is actively managing its portfolio by spinning off Angi and selling non-core assets like Mosaic Group and Roofing.
• The company is extending its Services Agreement with Google through March 31, 2026, ensuring continued revenue from paid listings.

Negatives

• Total revenue decreased by 13%, indicating challenges in some of IAC's core businesses.
• Angi's revenue declined by 13%, reflecting difficulties in the home services market.
• Search revenue decreased significantly by 38%, indicating challenges in the search business.
• Emerging & Other revenue decreased by 72%, primarily due to the sale of Mosaic Group and Roofing.
• The company reported a net loss attributable to IAC shareholders of $539.9 million.

Risks

• The spin-off of Angi may not be completed on the anticipated terms or at all.
• IAC will be a smaller, less diversified company following the Angi spin-off.
• Changes in the usage and functioning of search engines related to GAI technology could adversely impact the business.
• The company's reliance on Google for a significant portion of its revenue poses a risk if the Services Agreement is terminated or altered.
• The company's indebtedness could affect its ability to operate its business.
• The company may not be able to freely access the cash of Dotdash Meredith and/or Angi and their respective subsidiaries.

Future Outlook

IAC expects Print revenue from print magazine subscriptions, advertisers and newsstand sales to continue to decline over the next few years. The Company expects that changes to certain of the economic terms of the Services Agreement that become effective April 1, 2025 could negatively impact Search revenue.

Industry Context

The announcement reflects the ongoing challenges in the media and home services industries, with a shift towards digital platforms and increased competition.

Comparison to Industry Standards

• IAC's performance can be compared to diversified media companies like News Corp and Meredith Corp (prior to acquisition) for Dotdash Meredith, and to online marketplace companies like Amazon and eBay.
• Angi's performance can be compared to other home services platforms like Thumbtack and TaskRabbit.
• Care.com's performance can be compared to other care services platforms like Sittercity and Bright Horizons.
• Search's performance can be compared to other search engines like Google and Bing.

Management Changes

Legal Proceedings

• Shareholder litigation arising out of the MTCH Separation is ongoing, with trial scheduled for February 9, 2026.

Related Party Transactions

• The document mentions related party transactions with MGM Resorts International, Turo, Expedia Group and Vimeo.

Stakeholder Impact

• Shareholders will be impacted by the Angi spin-off and the potential changes in the value of IAC and Angi securities.
• Employees may be affected by the restructuring and cost-cutting measures.
• Customers may experience changes in the products and services offered by IAC's businesses.
• Suppliers and creditors may be impacted by the company's financial performance and strategic decisions.

Next Steps

• Complete the spin-off of Angi Inc.
• Focus on growing digital revenue at Dotdash Meredith.
• Address the challenges in the Angi and Search businesses.
• Manage the transition of leadership following the departure of the CEO.

Key Dates

Keywords

IAC, Angi, Dotdash Meredith, revenue, spin-off, financial results, Adjusted EBITDA, Search, Care.com, Mosaic Group