IAC/InterActiveCorp. continued its preparations for a life without Match Group Inc., this time seeing fast growth from its Dotdash media-brands business in the fourth quarter.
The New York-based media giant largely matched expectations with its latest results and Chief Financial Officer Glenn Schiffman said the company anticipates an acceleration in revenue growth during 2020.
IAC IAC, -6.10% posted net income of $161.3 million, or $1.05 a share, down from $191.8 million, or $2.04 a share, in the year-prior quarter. Analysts surveyed by FactSet were modeling $1.12 a share in GAAP (generally accepted accounting principles) earnings.
The company reported $271 million in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda), up slightly from $268 million a year ago. Analysts had been expecting $269 million. IAC doesn’t give an adjusted earnings-per-share figure.
Revenue for IAC rose to $1.22 billion from $1.1 billion a year earlier, whereas analysts were modeling $1.22 billion.
IAC’s Dotdash media business saw 39% revenue growth to $55.6 million as the company continues to focus on providing intent-driven content with fast load times and minimal advertisements as a way to drive users back to its suite of sites, which include Investopedia and Brides. The company has been adding to its portfolio, recently announcing the purchase of the Mother Nature Network and Tree Hugger brands to the Dotdash family of publications.
Schiffman said that IAC’s Vimeo video-tools platform is making progress in its efforts to penetrate both enterprise and smaller businesses. Vimeo is working on its integration of Magisto, a video-creation service that the company recently acquired, and announced a beta version of its Vimeo Create service in mid-January. The acquisition is intended to broaden Vimeo’s features beyond storage, editing, and other capabilities and help the company bring in new users who might then be tempted to try other functions.
Vimeo revenue climbed 23% to $54.6 million in the fourth quarter “due primarily to 30% subscriber growth to over 1.2 million,” including those from Magisto.
IAC has a majority economic interest in publicly traded ANGI Homeservices Inc. ANGI, +0.94%, which delivered mixed results for the latest period. Revenue of $321.5 billion was up from $279 million a year ago but came in a bit below the FactSet consensus, which called for $325 million. The company posted break-even per-share earnings on a GAAP basis, down from 7 cents in earnings per share a year ago, and in line with consensus. Adjusted Ebitda fell to $54.8 million from $66.2 million and was a hair above analysts’ forecast for $54 million.
After experiencing headwinds with paid Google GOOG, +0.08% GOOGL, +0.04% ad traffic earlier in the year, paid search was “one of the strongest areas” of ANGI’s business exiting 2019, Chief Executive Brandon Ridenour told MarketWatch. Organic search has been “a very volatile environment as far as level of change” but he expects that the worst is now in the past and companies will see more stability going forward.
The international business was a headwind for ANGI in the quarter, with Ridenour noting that the company is going through a “significant replatforming” in France, one of the company’s major overseas markets. The workers’ strike in France and Brexit uncertainty in the U.K. may have also impacted results, he said.
ANGI has seen positive user reactions from its new push to offer more fixed-price services on its platform, and Ridenour said that users of that offering come back to the service more than 50% more than regular customers.
IAC’s Schiffman is optimistic that the company will be able to apply learnings from ANGI to Care.com, a pending acquisition for IAC. Care.com “has many attributes that we know and love,” he said, including a large addressable market that has been slow to move online, highly fragmented supply and demand, and a large base of caregivers, whom the platform aims to match with elderly individuals or families that need child care.
The Care.com deal is part of IAC’s plan for a life beyond Match Group MTCH, -8.36%, the online-dating company that will be separating from IAC toward the middle of the year as per a previously announced agreement.
IAC shares have risen 7.4% over the past three months, as the S&P 500 has gained 8.5%.