IAC(US:IAC)2023-05-08 16:00Revenue Performance - Dotdash Meredith's total revenue decreased by 23% to $387.6 million in Q1 2023 from $500.5 million in Q1 2022[165] - Angi Inc.'s total revenue declined by 10% to $392.4 million in Q1 2023 compared to $436.2 million in Q1 2022[165] - Digital revenue for Dotdash Meredith fell by 15% to $184.8 million, while print revenue decreased by 29% to $207.0 million in Q1 2023[165] - Services revenue for Angi Inc. dropped significantly by 58% to $32.1 million in Q1 2023 from $76.5 million in Q1 2022[165] - Dotdash Meredith revenue decreased 23% to $387.6 million, with Print down 29% ($83.0 million) and Digital down 15% ($31.4 million) due to restructuring activities[166] - Angi Inc. revenue decreased 10% to $392.4 million, primarily due to a 58% ($44.4 million) drop in Services revenue[166] Expenses and Losses - The company recorded a restructuring charge of $2.2 million in Q1 2023, down from $22.4 million in Q1 2022[158] - Cost of revenue decreased 36% to $342.1 million, representing 32% of revenue compared to 40% in the prior year[167] - Selling and marketing expenses decreased 17% to $404.1 million, maintaining 37% of revenue[168] - General and administrative expenses increased 12% to $269.5 million, now 25% of revenue compared to 18% in the previous year[172] - Product development expenses increased 5% to $4.1 million, representing 8% of revenue[175] - Depreciation increased 102% to $61.2 million, now 6% of revenue compared to 2% in the prior year[176] - Total operating loss increased 25% to $135.6 million, with Dotdash Meredith reporting a total loss of $111.2 million[177] - Angi Inc. total loss decreased 69% to $10.5 million, with domestic Ads and Leads down 13% to $13.5 million[177] - Operating loss increased by $26.8 million to a loss of $135.6 million, primarily due to a $30.9 million increase in depreciation[178] EBITDA and Financial Metrics - Adjusted EBITDA for Dotdash Meredith decreased by $31.7 million to a loss of $23.1 million, driven by a $43.1 million increase in losses from Other (unallocated corporate costs) and a $10.4 million decrease from Digital[182] - Angi Inc. Adjusted EBITDA increased by $33.7 million to $30.5 million from a loss of $3.2 million, attributed to decreases in losses from Services, Roofing, and International[185] - Total Adjusted EBITDA for the company was $9.1 million, reflecting a 19% increase from $7.7 million in the previous year[194] Debt and Financial Position - Dotdash Meredith's long-term debt includes a Term Loan A balance of $328.1 million and a Term Loan B balance of $1.23 billion as of March 31, 2023[156] - Dotdash Meredith's total long-term debt, net, was $1,517.638 million as of March 31, 2023, slightly down from $1,524.475 million at the end of 2022[201] - The principal amount of the Company's outstanding debt totals $2.1 billion, with $1.6 billion in variable-rate Dotdash Meredith Term Loans and $500.0 million in fixed-rate ANGI Group Senior Notes[229] Cash Flow and Investments - Net cash provided by operating activities for the three months ended March 31, 2023, was $25.167 million, compared to $12.902 million for the same period in 2022[203] - The Company generated positive cash flows from operating activities of $25.2 million for the three months ended March 31, 2023, with Angi Inc. contributing $19.1 million and Dotdash Meredith generating negative cash flows of $5.8 million[222] - Net cash used in investing activities included $137.5 million from maturities of marketable debt securities and $29.4 million from asset sales, offset by $98.5 million for marketable debt securities purchases[205] - The Company contributed $135.0 million to Dotdash Meredith in March 2023 to enhance liquidity, which was subsequently distributed back to the Company in April 2023[223] Tax and Compensation - The effective income tax rate for 2023 was 25%, higher than the statutory rate of 21%, mainly due to state taxes and nondeductible compensation expenses[188] - As of March 31, 2023, there was $319.1 million of unrecognized compensation cost related to equity-based awards, expected to be recognized over approximately 4.4 years[180] - The Company's total outstanding employee stock-based awards amounted to $290.4 million, with estimated withholding taxes payable of $76.2 million[218] Investments and Market Performance - The unrealized gain on investment in MGM Resorts International was $704.8 million for the three months ended March 31, 2023, compared to a loss of $187.3 million in the same period of 2022[186] - The carrying value of the Company's investment in MGM was $2.9 billion as of March 31, 2023, representing approximately 27% of the Company's consolidated total assets[228] - The Company recorded an unrealized pre-tax gain of $704.8 million on its investment in MGM for the three months ended March 31, 2023[227] Shareholder Activities - IAC repurchased 1.8 million shares of its common stock for $90.9 million at an average price of $51.16 per share during the three months ended March 31, 2023[213] - IAC's cash flows from financing activities included the repurchase of 1.7 million shares for $84.7 million and principal payments on loans totaling $7.5 million[206] - In April 2023, IAC purchased additional shares of Turo for $103.6 million, increasing its ownership to approximately 31%[212] Risk Management - Dotdash Meredith entered into interest rate swaps totaling $350 million to manage interest rate risk, converting a portion of its debt to a fixed rate of approximately 7.92%[210] - An increase or decrease of 100 basis points in Adjusted Term SOFR would result in an annual interest expense change of $15.7 million for the Dotdash Meredith Term Loans[230] - A 100-basis point increase or decrease in interest rates would affect the fair value of the fixed-rate debt by $22.9 million[231] Internal Controls - The Company’s disclosure controls and procedures were deemed effective as of the end of the reporting period[233] - There have been no changes to the internal control over financial reporting that materially affected the Company during the quarter ended March 31, 2023[235]