IAC's Earnings and Strategic Moves: A Closer Look

Alright, folks, let's dive into IAC's recent earnings and the strategic moves outlined in their shareholder letters. IAC, the parent company of Dotdash Meredith and Angi, among others, has been making waves in the market, and it's time to take a closer look at what's been happening.

First things first, let's talk about the earnings. In the Q4 2023 earnings call, IAC reported a significant improvement in operating loss, with a $38 million reduction compared to the previous year. Adjusted EBITDA also saw a 57% increase, reaching $157 million. These improvements are a testament to the company's focus on cost savings and operational efficiency.

Now, let's discuss the strategic moves outlined in the shareholder letters. IAC has been exploring a spinoff of its 85% ownership in Angi to IAC shareholders, which would make Angi the 10th fully standalone public company to come from IAC. This move could have a significant impact on IAC's future performance and valuation, as Angi would have a more liquid equity currency, making it more attractive for consolidation, capital formation, or employee compensation. Additionally, Angi's increased focus and ambition could drive its breakout potential, allowing shareholders to participate directly in its future growth.

Another strategic initiative is the integration of Care.com as a separate segment in IAC's financials. This move showcases the earnings of the leading consumer marketplace for care, which generated $46 million of Adjusted EBITDA in the last twelve months. By highlighting Care.com's performance as a separate segment, IAC can better communicate the value and growth potential of this business to investors, potentially leading to a higher valuation for IAC.

IAC has also mentioned its intention to opportunistically analyze strategic sales of its businesses to simplify IAC and free up capital for better value creation. If IAC decides to sell some of its businesses, it could focus more resources on its core businesses, such as Dotdash Meredith and MGM, potentially leading to improved performance and a higher valuation for IAC. Additionally, the proceeds from these sales could be reinvested in high-growth areas or returned to shareholders, further enhancing IAC's value.

In conclusion, IAC's earnings trends and strategic initiatives, as outlined in the shareholder letters, paint a promising picture for the company's future. With a focus on cost savings, operational efficiency, and strategic moves such as the potential spinoff of Angi and the integration of Care.com as a separate segment, IAC is well-positioned to create value for shareholders. As an investor, I would keep a close eye on IAC and its subsidiaries, as their strategic initiatives and earnings trends could have a significant impact on their future performance and valuation.