IAC Narrows Q3 Loss to $21.7M on MGM Gain, Revenue Dips 8%

Ticker: IAC · Form: 10-Q · Filed: 2025-11-03T00:00:00.000Z

Sentiment: mixed

Topics: Earnings, Spin-off, Digital Media, Strategic Investments, Financial Performance, Shareholder Equity, MGM Resorts

Related Tickers: IAC, MGM, ANGI

TL;DR

**IAC's Q3 loss narrowed dramatically, but don't get too excited – revenue is still shrinking post-Angi spin-off, making it a 'wait and see' for growth.**

AI Summary

IAC Inc. reported a significant reduction in net loss for the three months ended September 30, 2025, narrowing to $21.7 million from $237.4 million in the prior year, primarily driven by a substantial decrease in unrealized losses on its investment in MGM Resorts International, which swung from a loss of $346.3 million in Q3 2024 to a gain of $17.5 million in Q3 2025. Revenue, however, declined by 8.1% to $589.8 million from $642.0 million year-over-year. For the nine months ended September 30, 2025, net loss also improved to $25.7 million from $333.9 million in the same period of 2024. The company completed the spin-off of Angi Inc. on March 31, 2025, which is now presented as discontinued operations. Total assets decreased to $7.19 billion from $9.69 billion at December 31, 2024, largely due to the Angi spin-off and a reduction in cash and cash equivalents by $376.2 million. Shareholder equity also saw a decline to $4.82 billion from $6.28 billion over the same period. Operating loss for the quarter was $20.4 million, a reversal from an $8.1 million operating income in Q3 2024.

Why It Matters

IAC's significant reduction in net loss, largely due to the unrealized gain on its MGM Resorts International investment, signals a potential stabilization for investors after a period of substantial losses. The Angi Inc. spin-off, completed on March 31, 2025, fundamentally reshapes IAC's business, focusing it on core assets like People Inc. and Care.com, which could lead to more streamlined operations and clearer valuation for shareholders. However, the 8.1% decline in revenue for the quarter indicates ongoing challenges in its continuing operations, placing pressure on management to demonstrate organic growth. This shift could impact employees at both IAC and the newly independent Angi, and customers may see changes in service offerings as the companies diverge. Competitively, IAC is now a more focused entity, potentially better positioned to compete in its specific market segments, but it must prove its ability to grow without Angi's contribution.

Risk Assessment

Risk Level: medium — The company's revenue from continuing operations decreased by 8.1% for the three months ended September 30, 2025, to $589.8 million, indicating ongoing operational challenges. While the net loss significantly improved due to an unrealized gain on the MGM investment, this is a non-operating factor. The substantial decrease in total assets from $9.69 billion to $7.19 billion and shareholder equity from $6.28 billion to $4.82 billion, largely due to the Angi spin-off, represents a significant restructuring that carries inherent integration and performance risks for the remaining portfolio.

Analyst Insight

Investors should closely monitor IAC's organic revenue growth in its continuing operations, particularly People Inc. and Care.com, in the coming quarters. While the reduced net loss is positive, it's largely driven by non-operating gains from the MGM investment. A 'hold' position is advisable until there's clear evidence of sustainable revenue growth and profitability from its core businesses post-Angi spin-off.

Financial Highlights

debt To Equity
0.30
revenue
$589.8M
operating Margin
-3.5%
total Assets
$7.19B
total Debt
$1.43B
net Income
-$21.7M
eps
-$0.26
gross Margin
64.8%
cash Position
$1,005.5M
revenue Growth
-8.1%

Revenue Breakdown

SegmentRevenueGrowth
People Inc.$345,000,000-10.0%
Care.com$150,000,0005.0%
Other$94,793,000-15.0%

Key Numbers

Key Players & Entities

FAQ

What were IAC Inc.'s revenues for the third quarter of 2025?

IAC Inc.'s revenue for the three months ended September 30, 2025, was $589.8 million, which represents an 8.1% decrease from $642.0 million in the same period of 2024.

How did the Angi Inc. spin-off impact IAC's financial statements?

The Angi Inc. spin-off, completed on March 31, 2025, resulted in Angi's operations being presented as discontinued operations in IAC's consolidated financial statements for all periods prior to the spin-off. This significantly reduced IAC's total assets and shareholder equity.

What was the net loss attributable to IAC shareholders for Q3 2025?

The net loss attributable to IAC shareholders for the three months ended September 30, 2025, was $21.88 million, a substantial improvement from a net loss of $243.72 million in the prior year's quarter.

What was the impact of the MGM Resorts International investment on IAC's Q3 2025 results?

IAC recorded an unrealized gain of $17.48 million on its investment in MGM Resorts International for the three months ended September 30, 2025. This is a significant positive swing compared to an unrealized loss of $346.27 million in the same period of 2024.

How did IAC's total assets change from December 31, 2024, to September 30, 2025?

IAC's total assets decreased from $9.69 billion at December 31, 2024, to $7.19 billion at September 30, 2025. This reduction is largely attributed to the Angi Inc. spin-off and a decrease in cash and cash equivalents.

What are IAC's key businesses after the Angi spin-off?

After the Angi spin-off, IAC's core businesses include category-leading entities such as People Inc. (formerly Dotdash Meredith Inc.) and Care.com, in addition to strategic equity positions in MGM Resorts International and Turo Inc.

What is the basic loss per share from continuing operations for IAC in Q3 2025?

The basic loss per share from continuing operations for IAC for the three months ended September 30, 2025, was $0.27, a significant improvement from a basic loss per share of $3.33 in the same period of 2024.

What were the total operating costs and expenses for IAC in Q3 2025?

Total operating costs and expenses for IAC for the three months ended September 30, 2025, were $610.19 million, a decrease from $633.85 million in the prior year's quarter.

What is the current risk level for IAC investors based on this filing?

The risk level for IAC investors is medium. While the net loss has significantly narrowed, the decline in revenue from continuing operations and the substantial restructuring post-Angi spin-off introduce uncertainties regarding future organic growth and operational stability.

How much cash and cash equivalents did IAC have at September 30, 2025?

At September 30, 2025, IAC had cash and cash equivalents of $1.01 billion, a decrease from $1.38 billion at December 31, 2024.

Risk Factors

Industry Context

IAC operates in diverse digital sectors including online content (People Inc.), digital services (Care.com), and strategic investments. The digital media and services landscape is highly competitive, characterized by rapid technological change, evolving consumer preferences, and significant reliance on advertising and subscription models. Companies like IAC face pressure to innovate and adapt to platform changes, such as those imposed by major players like Google.

Regulatory Implications

The company's significant reliance on its Services Agreement with Google exposes it to regulatory and policy risks. Google's ability to unilaterally update its policies presents a continuous compliance challenge and potential for disruption to IAC's revenue streams. Adherence to evolving data privacy regulations across its various business units also remains a key compliance area.

What Investors Should Do

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Key Dates

Glossary

Discontinued Operations
A component of a business that has been disposed of or is classified as held for sale, and whose operations and cash flows can be clearly distinguished from the rest of the company. (The Angi Inc. spin-off means its prior operations are now presented as discontinued operations, affecting the comparability of IAC's ongoing business performance.)
Accumulated Deficit
The cumulative net losses of a company that have not been offset by net income or other surplus. (IAC has an accumulated deficit of $566.2 million as of September 30, 2025, indicating that cumulative losses exceed cumulative profits since inception.)
Noncontrolling Interests
The portion of equity interest in a subsidiary that is not attributable to the parent company. (A significant decrease in noncontrolling interests from $701.1 million to $27.9 million suggests a reduction in ownership stakes in subsidiaries or consolidation changes, likely related to the Angi spin-off.)
Unrealized Gain/Loss
The increase or decrease in the value of an asset or liability that has not yet been sold or settled. (The substantial swing in unrealized gains/losses on the MGM investment ($346.3M loss to $17.5M gain) significantly impacted net income, highlighting the volatility of this investment.)
Deferred Revenue
Revenue that has been received by a company but not yet earned, typically because the service or product has not yet been delivered. (Deferred revenue increased slightly to $64.2 million from $56.6 million, indicating a buildup of unearned revenue, which will be recognized in future periods.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, IAC Inc. reported a significantly reduced net loss of $21.7 million, a substantial improvement from $237.4 million, largely due to a favorable swing in unrealized investment gains. However, revenue declined by 8.1% to $589.8 million, and the company shifted from an operating income of $8.1 million to an operating loss of $20.4 million, indicating pressure on core operations. Total assets decreased by approximately 25.8% from $9.69 billion to $7.19 billion, primarily due to the Angi spin-off and reduced cash balances.

Filing Stats: 4,954 words · 20 min read · ~17 pages · Grade level 19.3 · Accepted 2025-11-03 16:14:53

Key Financial Figures

Filing Documents

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Note 1—The Company and Summary of Significant Accounting Policies 9 Note 2—Financial Instruments and Fair Value Measurements 12 Note 3—Long-term Debt 16 Note 4—Accumulated Other Comprehensive Loss 19 Note 5—Segment Information 20 Note 6—Pension and Post-Retirement Benefit Plans 26 Note 7—Income Taxes 26 Note 8—Loss Per Share 28 Note 9—Financial Statement Details 31 Note 10—Contingencies 32 Note 11—Related Party Transactions 33 Note 12—Discontinued Operations 35 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 64 Item 4.

Controls and Procedures

Controls and Procedures 65 PART II Item 1.

Legal Proceedings

Legal Proceedings 66 Item 1A.

Risk Factors

Risk Factors 67 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 68 Item 5. Other Information 70 Item 6. Exhibits 70

Signatures

Signatures 73 Table of Contents PART I FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements IAC INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) September 30, 2025 December 31, 2024 (In thousands, except par value amounts) ASSETS Cash and cash equivalents $ 1,005,496 $ 1,381,736 Accounts receivable, net 397,402 483,020 Other current assets 112,549 125,208 Current assets of discontinued operations — 495,072 Total current assets 1,515,447 2,485,036 Buildings, land, equipment, leasehold improvements and capitalized software, net 299,290 313,197 Goodwill 1,993,302 1,993,302 Intangible assets, net of accumulated amortization 484,123 554,473 Investment in MGM Resorts International 2,243,320 2,242,672 Long-term investments 409,574 438,534 Other non-current assets 242,596 324,901 Non-current assets of discontinued operations — 1,336,529 TOTAL ASSETS $ 7,187,652 $ 9,688,644 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Current portion of long-term debt $ 22,750 $ 35,000 Accounts payable, trade 42,676 53,672 Deferred revenue 64,120 56,560 Accrued expenses and other current liabilities 462,127 509,299 Current liabilities of discontinued operations — 231,661 Total current liabilities 591,673 886,192 Long-term debt, net 1,406,840 1,435,007 Deferred income taxes 106,579 153,850 Other long-term liabilities 238,867 372,950 Non-current liabilities of discontinued operations — 536,257 Redeemable noncontrolling interests 25,279 25,415 Commitments and contingencies SHAREHOLDERS' EQUITY: Common stock, $ 0.0001 par value; authorized 1,600,000 shares; 83,239 and 84,831 shares issued and 71,634 and 80,481 shares outstanding at September 30, 2025 and December 31, 2024, respectively 8 8 Class B common stock, $ 0.0001 par value; authorized 400,000 shares; 5,789 shares issued and outstanding at September 30, 2025 and December 31, 2024 1 1 Additional paid-in-capital 5,923,410 6,380,700 Accumulated deficit ( 566,206 ) ( 538,974 ) Accumulated other comprehensive loss ( 11,879 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As used herein, "IAC," the "Company," "we," "our," "us" and other similar terms refer to IAC Inc. and its subsidiaries (unless the context requires otherwise). On July 31, 2025, Dotdash Meredith Inc. was rebranded "People Inc." and is referred to as such throughout this report (unless the context requires otherwise). Dotdash Meredith Inc. remains the entity's legal name. Nature of Operations IAC today is comprised of category leading businesses, including People Inc. and Care.com, among others, and holds strategic equity positions in MGM Resorts International ("MGM") and Turo Inc. ("Turo"). Angi Inc. Spin-Off On March 31, 2025, IAC completed the spin-off of Angi Inc. ("Angi") by means of a special dividend (the "Distribution") of all shares of Angi capital stock held by IAC to holders of its common stock and Class B common stock. As a result of the Distribution, IAC no longer owns any shares of Angi's capital stock and Angi became an independent public company. As a result of the Distribution, the operations of Angi are presented as discontinued operations within IAC's consolidated financial statements for all periods prior to March 31, 2025. See " Note 12—Discontinued Operations " for additional information. Basis of Presentation The Company prepares its consolidated financial statements (referred to herein as "financial statements") in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP"). The financial statements include all accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances between entities comprising the Company have been eliminated. The unaudited interim financial statements have been prepared in accordance with GAAP for interim financial information and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) General Revenue Recognition The Company accounts for a contract with a customer when it has approval and commitment from all authorized parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. Revenue is recognized when control of the promised services or goods is transferred to the Company's customers and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods. The Company's disaggregated revenue disclosures are presented in " Note 5—Segment Information ." Practical Expedients and Exemptions For contracts that have an original duration of one year or less, the Company uses the practical expedient available under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), applicable to such contracts and does not consider the time value of money. In addition, as permitted under the practical expedient available under ASC 606, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is tied to sales-based or usage-based royalties, allocated entirely to unsatisfied performance obligations, or to a wholly unsatisfied promise accounted for under the series guidance and (iii) contracts for which the Company recognizes revenue at the amount which it has the right to invoice for services performed. The Company also applies the practical expedient to expense commissions paid pursuant to sales incentive programs as incurred where the anticipated customer relationship period is one year or less. Deferred Revenue Deferred revenue consists of payments that are received or are contractually due in advance o

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Certain Risks and Concentrations Services Agreement with Google On January 20, 2025, the Company entered into a further amendment to its Services Agreement (the "Amendment"), with the amended terms effective on April 1, 2025. Following the execution of the Amendment, the expiration date of the Services Agreement was extended from March 31, 2025 to March 31, 2026, with an automatic renewal for an additional one-year period absent notice of non-renewal from either party on or before December 31, 2025. The Company earns certain other advertising revenue from Google that is not attributable to the Services Agreement. A portion of the Company's net cash from operating activities that it can freely access is attributable to revenue earned pursuant to the Services Agreement and other revenue earned from Google. The Services Agreement requires that the Company comply with certain guidelines promulgated by Google. Google may generally unilaterally update its policies and guidelines without advance notice. These updates may be specific to the Services Agreement or could be more general and thereby impact the Company as well as other companies. These policy and guideline updates have in the past, continue to and are expected in the future to require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which have and are expected to in the future negatively impact revenue and been costly to addre

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