IAC (NASDAQ: IACI) is a leading media and Internet company comprised of some of the world's most recognized brands and products, such as HomeAdvisor, Vimeo, About.com, Dictionary.com, The Daily Beast, Investopedia, and Match Group's online dating portfolio, which includes Match, OkCupid and Tinder.
Ranked by Fortune magazine's annual standing of the world's most admired companies in the Internet Services & Retailing sector for many years, IAC's family of websites is one of the largest in the world, with over two billion monthly visits reaching users in more than 190 countries. The company is headquartered in the Chelsea neighbourhood of New York City and has business operations and satellite offices around the world.
IAC has always been at the crossroads of ecommerce, media and the Internet, investing strategically and opportunistically in our companies to provide long term value for shareholders, while creating products that enhance customer experience. Since inception, IAC has spawned independent publicly traded companies--Match Group, Expedia, TripAdvisor, HSN, Tree, Interval, and Live Nation (formerly Ticketmaster). The company continues to be at the forefront of New York tech, investing in start ups, acquiring companies, and continuing to develop products organically.
IAC REPORTS Q1 2019--Q1 REVENUE EXCEEDS $1.1 BILLION
NEW YORK-- May 8, 2019--IAC (NASDAQ: IAC) released its first quarter results today and separately posted a letter to shareholders from IAC's CEO Joey Levin on the Investor Relations section of its website at www.iac.com/lnvestors.
Q1 2019 HIGHLIGHTS
ANGI Homeservices revenue increased 19% to $303.4 million and Pro Forma Revenue increased 22%.
* Marketplace and Advertising paying service professionals totaled 257,000 at the end of Q1 2019.
* Pro Forma Revenue excludes Q1 2018 deferred revenue write-offs of $2.8 million in connection with the Angie's List transaction and revenue of $8.5 million from Felix, which was sold on December 31,2018.
Match Group Average Subscribers increased 16% to 8.6 million. Tinder Average Subscribers increased 384,000 sequentially and 1.3 million year-over-year to 4.7 million.
Vimeo Platform Revenue increased 25% to $41.3 million due to average revenue per subscriber growth of 16% and subscriber growth of 8% to 973,000.
* Vimeo announced its agreement to acquire Magisto, a video creation service enabling businesses to create short-form videos. The acquisition is expected to close by the end of Q2 2019. *
* Vimeo sold its Hardware business in Q1 2019.
Dotdash revenue increased 13% to $34.0 million. Operating income decreased slightly to $3.0 million and Adjusted EBITDA nearly doubled to $7.1 million.
At Applications, Mosaic Group (formerly Mobile) increased revenue to $47.6 million, comprising 33% of total segment revenue in the quarter (up from 11% in Q1 2018), and ended Q1 2019 with 3.6 million subscribers. Total segment operating income was $25.4 million and Adjusted EBITDA was $29.7 million.
Revenue growth was due primarily to increased subscribers and ARPU at Tinder, partially offset by unfavorable foreign exchange effects.
Operating income grew slower than revenue due to $11.0 million higher stock-based compensation expense, primarily as a result of $9.4 million in expense related to the vesting of certain awards for which the performance condition was met, and slower Adjusted EBITDA growth. Adjusted EBITDA growth was impacted by higher cost of revenue, primarily due to in-app purchase fees as revenue is increasingly sourced through mobile app stores, and higher legal costs, partially offset by lower selling and marketing expense as a percentage of revenue.
Revenue increased 19% to $303.4 million driven by:
* 33% Marketplace growth due to:
* a 15% increase in service requests to 5.8 million
* a 14% increase in paying service professionals to 221,000
* a 16% increase in revenue per paying service professional o 11% growth in Europe
Pro Forma Revenue increased 22% (excluding Q1 2018 deferred revenue write-offs of $2.8 million in connection with the Angie's List transaction and revenue of $8.5 million from Felix, which was sold on December 31,2018).
Operating loss decreased $7.1 million to $3.6 million due to $5.6 million lower stock-based compensation expense, $1.8 million lower amortization of intangibles and 1% higher Adjusted EBITDA to $37.2 million.
* Adjusted EBITDA grew slower than revenue due to higher selling and marketing expense as a percentage of revenue and investment at Handy and Fixd Repair, partially offset by $5.3 million Angie's List transaction-related items in Q1 2018.
Revenue increased 23% to $43.6 million driven by 25% higher Platform Revenue, partially offset by 14% lower Hardware Revenue.
* Platform Revenue growth was driven by a 16% increase in average revenue per subscriber and an 8% increase in ending subscribers to 973,000
Operating loss increased 82% to $17.8 million and Adjusted EBITDA loss increased 108% to $16.2 million due primarily to higher marketing costs driven largely by the launch of a brand campaign during the quarter.
Revenue increased 13% to $34.0 million due to 18% higher traffic resulting in strong advertising revenue growth, primarily from Verywell, as well as growth in affiliate commerce commissions.
Operating income decreased 5% to $3.0 million due to $3.5 million higher amortization of intangibles driven by the Byrdie acquisition, partially offset by Adjusted EBITDA growth of 86% to $7.1 million.
Revenue increased 9% to $143.5 million due to a 230% increase at Mosaic Group (formerly Mobile), partially offset by an 18% decrease at Desktop.
Mosaic Group revenue growth of 230% was driven by:
* 69% growth related to the ongoing transition to subscription products, increased marketing and new products
* iTranslate (acquired in Q1 2018), TelTech (acquired in Q4 2018) and Daily Burn (moved to Applications effective April 1, 2018).
The decrease in Desktop revenue was driven by lower Consumer queries and continued Partnerships declines.
Operating income was $25.4 million, flat to Q1 2018 due to an 11 % increase in Adjusted EBITDA to $29.7 million, offset by $1.8 million higher amortization of intangibles due to acquisitions over the past year and expense of $1.5 million in Q1 2019 related to a contingent consideration arrangement in connection with a 2018 acquisition.
Emerging & Other
Revenue decreased 13% to $116.7 million due primarily to the sales of Electus, Dictionary.com and CityGrid in Q4 2018 and Daily Burn (moved to Mosaic Group effective April 1, 2018), partially offset by higher revenue from Ask Media Group and BlueCrew (acquired in Q1 2018).
Operating loss was $2.5 million in Q1 2019 compared to a profit of $6.5 million in Q1 2018 with the decline driven by an Adjusted EBITDA loss of $2.1 million in Q1 2019 compared to a profit of $8.2 million in Q1 2018. The Adjusted EBITDA declines were due primarily to lower margins at Ask Media Group, investment in BlueCrew and College Humor Media and the sale of Dictionary.com.
Operating loss increased $6.5 million due primarily to a $3.1 million increase in stock-based compensation expense due primarily to the issuance of new equity awards and a $3.2 million increase in Adjusted EBITDA losses driven primarily by higher compensation costs and professional fees.
The Company recorded an income tax benefit of $63.6 million in Q1 2019 and $29.0 million in Q1 2018, primarily due to excess tax benefits generated by the exercise and vesting of stock-based awards in both periods. While the Company does not expect to be a full US federal cash income tax payer until 2022, which is in line with previous estimates, the ultimate timing is dependent primarily on the Company's performance, other components of pre-tax income (including realized gains and losses) and the amount and timing of tax deductions related to stockbased awards.
Free Cash Flow
For the three months ended March 31,2019, Free Cash Flow decreased $60.1 million to $77.1 million due primarily to an increase in accounts receivable (driven by the timing of certain cash receipts) and higher capital expenditures.
IAC executives will participate in the ANGI Homeservices quarterly conference call to answer questions regarding IAC on Thursday, May 9, 2019, at 8:30 a.m. Eastern Time. This call will include the disclosure of certain information, including forward-looking information, which may be material to an investor's understanding of IAC's business. The live audiocast will be open to the public at www.iac.com/Investors or ir.angihomeservices.com.
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|Title Annotation:||Leading Companies|
|Date:||Aug 6, 2019|
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