IAC InterActive Corp. Q1 FY2025 earnings call

• Spin of Angi completed on March 31, with Joey Levin transitioning to Angi Executive Chairman.
• DDM grew digital revenue 7% and EBITDA 46% (excluding a one-time lease gain) by terminating a long-term lease for $43 million in cash payments, generating a $36 million book gain.
• Care is focusing on improving product, pricing/packaging, and marketing to drive better customer experience, conversion, and retention.
• MGM reported solid earnings and is well prepared for the rest of 2025.
• Turo withdrew IPO plans and is focused on growth.
• Vivian is implementing AI into its products and processes.
• Search renewed its contract with Google and shows stability after challenging years.
• The Daily Beast grew revenue 72% and achieved profitability.
• Corporate rationalized cost structure and reached agreement in principle to settle the Match-separation litigation.
• Repurchased 4.5 million shares of IAC and increased share repurchase authorization by 10 million shares.
• Pursuing M&A opportunities, with an active effort to find investment opportunities through existing companies and new platforms.
• Key projects at DDM include the People app, MyRecipes, and D/Cipher Plus, focusing on meeting audiences, modernizing recipes, and extending D/Cipher across the open web.

In Q1, Dotdash Meredith (DDM) grew digital revenue 7% and increased EBITDA 46% (excluding a one-time lease gain). The Daily Beast grew revenue 72% and achieved profitability. Angi was spun off. MGM reported solid earnings. Turo withdrew IPO plans. Vivian is implementing AI. Search renewed its contract with Google and showed stability. Care is making progress but facing consumer pressure. DDM contributed significantly to revenue with its digital growth, accounting for a notable portion of IAC's overall performance.

• Reaffirmed full-year 2025 adjusted EBITDA guidance across all of IAC.
• Q2 DDM Digital revenue guidance is 7% to 9%, driven by stable traffic, easier comps, stable premium demand, solid performance marketing, and continued analysis of advertiser demand and tariff uncertainty.
• Assumes no significant recession, monitoring macroeconomic environment for signs of stability or weakness among consumers and brands.

• Macroeconomic uncertainty impacting consumer spending and advertiser demand.
• Volatility in programmatic pricing, with programmatic prices running flat year-over-year after being up previously.
• Impact of tariff uncertainty on advertiser demand, creating a disconnect between direct revenues and programmatic.
• Potential effects of legal cases like the Google DOJ trial on the business ecosystem.
• Consumer pressure on Care, with ebbing conversion and challenges in the care category.

Q: Can you talk about the key priorities and product priorities that could drive 2026 DDM revenue growth?

A: Neil Vogel mentioned projects like the People app, MyRecipes, D/Cipher Plus, investing in event businesses, and building audiences in different places. Christopher Halpin discussed capital allocation goals of buying $200 million of shares and looking at M&A opportunities.

Q: Sticking with DDM Digital, can you talk about the 1Q trends - revenue trends?

A: Christopher Halpin said Q1 digital advertising was up 1% with premium solid but fewer impressions affecting programmatic. Neil Vogel added premium revenue held up well, with a disconnect between programmatic and direct advertising.

Q: Could you just talk about the appointment of Jim Lawson as the President of D/Cipher?

A: Neil Vogel said Jim Lawson is a star hire with commercial skills to leverage D/Cipher's data product and target the open web, excited about his strategic objectives for D/Cipher.

Q: Maybe sticking with D/Cipher, could you talk about the impact or lack of impact from Google no longer phasing out cookies?

A: Neil Vogel said cookies not a big deal, neutral on it, and D/Cipher and D/Cipher Plus-driven offerings are more performant, with cookies elimination reducing market thrash.

Q: Could you talk about the appointment of Tor Braham as a Board member?

A: Christopher Halpin said Arkhouse is an IAC investor, Tor Braham's background in technology and capital markets will be valuable as IAC executes its strategy.

Q: Great. You're approaching 1 year of Dotdash working with OpenAI. Could you talk about your learnings from this partnership?

A: Neil Vogel said OpenAI has been a good partner, helping with engineer cooperation and product rollouts, and Chris Halpin mentioned AI applications across the portfolio in areas like optimization and customer service.

Q: On the Google DOJ trial, how might the world look differently for Dotdash if we see some divestitures and what opportunities that might create?

A: Neil Vogel said they're looking closely at the case, but will function independently and continue to focus on strong brands, audiences, and execution.

Q: On the programmatic side and premium side, can you close talking a little bit more about the premium side and the strength you're seeing there?

A: Neil Vogel said premium business was strong, D/Cipher helping, and Christopher Halpin discussed M&A environment, looking at opportunities across experiences, digital enablement, and AI influence on consumer interactions