IAC Inc (IAC) Q4 Earnings: Operating Loss Narrows, Adjusted EBITDA Climbs
Revenue: Decreased by 15% year-over-year to $1,058.0 million in Q4 2023.
Operating Loss: Improved by 51%, narrowing to $37.0 million in Q4 2023.
Adjusted EBITDA: Increased by 57% to $156.8 million in Q4 2023.
Net Earnings: Reported at $327.8 million in Q4 2023, compared to a loss of $1.4 million in Q4 2022.
Diluted Earnings Per Share: Stood at $3.70 in Q4 2023, a significant increase from a loss of $0.02 per share in Q4 2022.
Free Cash Flow: Improved to $48.2 million for the twelve months ended December 31, 2023.
Stock Repurchases: Angi Inc. repurchased 6.1 million common shares for an aggregate of $14.0 million.
On February 13, 2024, IAC Inc (NASDAQ:IAC) released its fourth quarter results, showcasing a mix of challenges and financial achievements. The company, known for its diverse internet media segments including Angi (47% of total revenue), Dotdash (10%), search (24%), and emerging and other (19%), has reported a 15% decrease in revenue year-over-year, amounting to $1,058.0 million. Despite this decline, IAC managed to significantly narrow its operating loss by 51% to $37.0 million and increase its Adjusted EBITDA by 57% to $156.8 million, reflecting a strong improvement in operational efficiency. The company also reported a substantial net earnings of $327.8 million, a stark contrast to the net loss of $1.4 million in the same quarter of the previous year. This performance is particularly important for IAC as it demonstrates the company's ability to optimize its operations and maintain profitability in a challenging economic environment. The full details of IAC's financial performance can be found in its 8-K filing.
Financial Performance Analysis
The company's performance in the fourth quarter of 2023 was marked by a notable improvement in operating loss and Adjusted EBITDA. The operating loss improved by $38 million to $37 million, and Adjusted EBITDA improved by 57% to $157 million. These improvements are significant as they demonstrate IAC's ability to manage its expenses and optimize its operations amidst revenue challenges.
One of the key highlights of the quarter was the unrealized gain on investment in MGM Resorts International, which contributed $512.6 million, representing a 108% increase compared to the same period last year. This gain significantly impacted net earnings, which stood at $327.8 million for the quarter.
On the segment front, Dotdash Meredith's revenue remained relatively flat, with a slight decrease from $477.6 million in Q4 2022 to $475.9 million in Q4 2023. Angi Inc. experienced a more pronounced revenue decline of 27%, dropping from $413.3 million to $300.4 million. The Search segment also saw a decrease in revenue by 13%, and Emerging & Other by 28%. However, Angi Inc.'s operating income showed a remarkable turnaround, reporting a profit compared to a loss in the previous year.
Corporate operating loss increased due to higher compensation costs and stock-based compensation expense. The company also recorded an income tax provision of $112.5 million in Q4 2023, with an effective tax rate of 26%.
Liquidity and Capital Resources
As of December 31, 2023, IAC's liquidity position remained strong. Dotdash Meredith had a $150 million revolving credit facility with no borrowings, and Angi Inc. implemented a share repurchase plan, buying back 6.1 million common shares at an average price of $2.32 per share. IAC itself had 3.7 million shares remaining in its stock repurchase authorization, indicating a continued commitment to returning value to shareholders.
The company's free cash flow for the twelve months ended December 31, 2023, was reported at $48.2 million, a significant improvement from the negative free cash flow in the previous year. This increase was primarily due to favorable working capital changes and higher Adjusted EBITDA, partially offset by higher capital expenditures.
Conclusion
In conclusion, IAC Inc (NASDAQ:IAC) has demonstrated resilience in the face of revenue headwinds, with a strong focus on improving its operating metrics and maintaining a robust balance sheet. The company's strategic investments and cost management initiatives have borne fruit, as evidenced by the improved operating loss and Adjusted EBITDA. As IAC continues to navigate the dynamic interactive media landscape, these financial achievements underscore its commitment to operational excellence and shareholder value creation.
For a more detailed analysis of IAC's financial results and operational strategies, investors and interested parties are encouraged to review the full earnings release and join the conference call scheduled for February 14, 2024.
Explore the complete 8-K earnings release (here) from IAC Inc for further details.
This article first appeared on GuruFocus.
