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Introduction & Market Context
IAC/InterActiveCorp (NASDAQ:IAC) presented its Q2 2025 earnings results on August 4, 2025, highlighting consolidated Adjusted EBITDA growth of 15% and providing full-year guidance. The company’s stock closed at $38.83 prior to the presentation, with shares rising 1.08% to $39.25 in after-hours trading.
The presentation comes after a challenging first quarter, when IAC missed significantly on both revenue and earnings expectations. The company appears to be regaining momentum, with several strategic initiatives underway including the rebranding of Dotdash Meredith (NYSE:MDP) to People Inc. and a major overhaul of Care.com.
Q2 2025 Performance Highlights
IAC reported consolidated Adjusted EBITDA growth of 15% and issued full-year 2025 Adjusted EBITDA guidance of $247-$285 million. The company highlighted several key developments across its portfolio of businesses.
As shown in the following slide summarizing the quarter’s key highlights:
Chairman Barry Diller emphasized the company’s aggressive capital allocation strategy, stating: "Our appetite to put our cash to work is as strong as ever, be it buying back more of our own stock or going after new strategic fits that emerge. Unconstrained, we intend to do exactly as we set out to do - catalyze opportunities, optimize our assets, and unlock shareholder value."
The company has repurchased 4.5% of its shares year-to-date, representing approximately $200 million, and has authorized a new 10 million share repurchase program.
People Inc. Digital Growth Strategy
A major focus of the presentation was the rebranding of Dotdash Meredith to People Inc. and its accelerating digital revenue growth. The company reported Q2 2025 digital revenue of $260 million, representing 9% year-over-year growth compared to $238 million in Q2 2024.
The following chart illustrates the company’s success in diversifying its traffic sources and growing digital revenue:
People Inc. has successfully reduced its dependence on Google (NASDAQ:GOOGL) Search, which now represents only 28% of core sessions compared to 52% in Q2 2023. Meanwhile, off-platform views have grown significantly, reaching 14,699 million in Q2 2025, a 24% CAGR from Q2 2023.
The company’s digital revenue monetization strategy is increasingly diversified across three key areas:
1. Advertising (62% of digital revenue, +5% Y/Y)
2. Performance Marketing (23% of digital revenue, +14% Y/Y)
3. Licensing (15% of digital revenue, +23% Y/Y)
The following slide details People Inc.’s digital revenue and margin performance:
For Q3 2025, People Inc. is guiding for 7-9% digital revenue growth and Digital Adjusted EBITDA of $68-73 million, representing margins of 25-28%. The company anticipates a return to Digital Adjusted EBITDA growth in Q3 2025 with improving incremental margins.
Care.com Transformation
IAC highlighted Care.com’s major brand and product overhaul, the largest in the company’s 20-year history. Care.com serves families through both consumer and enterprise channels, with approximately $360 million in revenue for the twelve months ended June 30, 2025.
The following slide illustrates Care.com’s market position and scale:
Despite Care.com’s market leadership position, revenue has been declining in recent years, from $375 million in 2023 to $360 million in the twelve months ended Q2 2025. The company is betting on its product modernization and fresh marketing campaign to reverse this trend.
The transformation includes a better product experience with robust search and match capabilities, improved messaging, and a refreshed homepage. The company has also launched a new brand identity and integrated campaign with the slogan "When it’s not you it’s Care.com."
Valuation and Capital Allocation
One of the most striking claims in IAC’s presentation was that the company is trading at a substantial discount to the value of its holdings. According to the company’s analysis, after accounting for its MGM stake (valued at $2.3 billion) and cash ($0.8 billion), investors are effectively acquiring IAC’s private holdings for virtually nothing.
The following slide presents IAC’s valuation argument:
IAC’s private holdings include People Inc. (with $1 billion in digital revenue and $312 million in Adjusted EBITDA), Care.com ($360 million in revenue and $46 million in Adjusted EBITDA), and other assets including Turo, Vivian, Ask Media Group, and Daily Beast with a combined basis of approximately $600 million.
The company outlined its strategic game plan centered around three pillars:
IAC’s capital allocation strategy includes both returning capital to shareholders through share repurchases and pursuing M&A opportunities to build new platforms. The company has also completed opportunistic divestitures including Bluecrew and Mosaic Group.
Forward Guidance and Outlook
IAC provided detailed guidance for 2025, with total Adjusted EBITDA expected to range between $247-$285 million. The company expects People Inc. to contribute $330-$340 million in Adjusted EBITDA, while Care.com is projected to deliver $45-55 million.
The following slide details the company’s 2025 guidance:
For Q3 2025 specifically, IAC expects People Inc. to achieve 7-9% digital revenue growth with Digital Adjusted EBITDA of $68-73 million. Care.com is projected to deliver Adjusted EBITDA of $11-13 million, while Search is expected to contribute $3-4 million.
The company’s total operating income for 2025 is projected to be between $82-140 million, reflecting the impact of stock-based compensation, depreciation, and amortization of intangibles.
Despite the positive tone of the Q2 presentation, investors should note that IAC faced significant challenges in Q1 2025, missing analyst expectations for both revenue and EPS. The company’s ability to execute on its strategic initiatives, particularly the People Inc. rebranding and Care.com transformation, will be crucial for meeting its full-year guidance and addressing the valuation discount highlighted in its presentation.
Full presentation:
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