What happened
Shares of IAC (IAC 1.08%) were heading lower today after the holding company best known for being the majority shareholder of Angi (ANGI 5.34%) posted disappointing results in its second-quarter earnings report.
As of 3:22 p.m. ET, the stock was down 15.3%.
So what
Revenue in the quarter declined 18% to $1.11 billion, just short of estimates at $1.12 billion. At Dotdash Meredith, its publishing division, revenue fell 15% to $414 million, and revenue at Angi was off 16% on a pro forma basis to $375 million.
Meanwhile, in its emerging and other segments, which include smaller businesses like Bluecrew, Vivian Health, and Care.com, revenue fell 8% to $148 million, and search revenue declined 11% to $177 million.
Cost-cutting and favorable comparisons in some categories led to an improvement in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from $37.4 million to $70.2 million. Its loss per share of $1.07 was worse than the analyst consensus at a loss of $0.82.
A challenging macro environment, in terms of digital advertising and the housing market, is weighing on IAC's business, and the company continues to be focused on improving profit margins while it manages through the downturn. It's also been buying back stock to take advantage of the sell-off.
Now what
Looking ahead, the company called for adjusted EBITDA of $320 million-$440 million and a generally accepted accounting principles (GAAP) operating loss of $80 million to $260 million.
While the company seems to be making progress on some of its strategic goals, it's certainly a disappointment to see revenue at all four of its business segments declining, and that needs to change for the stock to find support.
It's not surprising to see the stock down double-digits on the news.
