IAC's 2025 EBITDA Guidance and the People Inc. Rebrand: A Strategic Shift for Long-Term Value Creation

When it comes to navigating the turbulent waters of the post-search media era, IAC (NASDAQ: IAC) has made a bold move. The company's 2025 EBITDA guidance of $247–285 million isn't just a number—it's a testament to a strategic overhaul that positions IAC to thrive in a world where AI is reshaping content creation and consumer engagement. Let's break down how the rebranding of Dotdash Meredith to People Inc., coupled with aggressive digital transformation, could unlock lasting value for shareholders.

The EBITDA Story: From Stumbles to Steady Growth

IAC's Q2 2025 earnings report was a mixed bag. While Q1 left investors scratching their heads after missing revenue and earnings targets, the second quarter saw a 15% year-over-year surge in Adjusted EBITDA. This rebound wasn't a fluke—it's the result of a calculated pivot. The company's full-year EBITDA guidance now hinges on two pillars: People Inc. and Care.com.

People Inc. alone is projected to contribute $330–340 million in Adjusted EBITDA in 2025, driven by a 9% digital revenue growth in Q2. That's no small feat, especially when you consider the company's deliberate shift away from Google search traffic. By reducing reliance on search from 52% of core sessions in 2023 to just 28% today, IAC is future-proofing its revenue streams. The diversification into performance marketing (23% of digital revenue) and licensing (15%) adds layers of resilience.

The People Inc. Rebrand: A Human-Centric Counter to AI Overload

The rebranding of Dotdash Meredith to People Inc. isn't just a name change—it's a strategic repositioning. In an age where AI-generated content floods the market, IAC is doubling down on its legacy brands. Food & Wine, Travel + Leisure, and People magazine aren't just names; they're trust signals in a world where authenticity is scarce.

This move aligns with a broader industry trend. Media companies are realizing that AI can't replicate the emotional resonance of human-curated content. People Inc. is betting big on that insight. By emphasizing “people-first” storytelling, the company is carving out a niche where AI-driven platforms can't compete.

But the rebrand isn't just about branding—it's about tech. IAC's partnership with OpenAI to develop D/Cipher, an AI-powered ad targeting platform, is a masterstroke. This tool links content context to hyper-relevant ads (e.g., pet insurance ads next to Real Simple's stain-removal guides), boosting ad effectiveness and margins. The result? Higher-margin digital revenue growth of 7–9% in Q3 2025, with Digital Adjusted EBITDA margins hitting 25–28%.

Care.com's Modernization: A Smaller But Vital Piece

While People Inc. steals the spotlight, Care.com's $45–55 million in projected 2025 Adjusted EBITDA shouldn't be overlooked. The June 2025 product overhaul—focusing on Senior Care and Pet Care—signals a pivot to high-growth niches. By improving user experience and expanding its service offerings, Care.com is positioning itself to reverse declining consumer revenue trends.

Capital Allocation: Shareholder-Friendly Moves

IAC's 4.5% share repurchase in 2025 (worth $200 million) and the new 10 million share buyback program show management's commitment to unlocking value. These moves, combined with the EBITDA growth trajectory, suggest a company that's not just surviving but strategically reinvesting in itself.

Risks and Rewards: Is This a Buy?

No strategy is without risks. The shift away from 21 non-core brands could create short-term friction, and AI integration must be carefully managed to avoid diluting the human-centric narrative. However, the company's strong brand equity, diversified revenue streams, and AI-driven scalability mitigate these concerns.

The Bottom Line: Positioning for a Post-Search World

IAC's 2025 EBITDA guidance isn't just about hitting numbers—it's about redefining its value proposition. By aligning its brand with human-centric storytelling and AI-enhanced operations, the company is building a moat in a market where trust and relevance are premium assets.

For investors, this is a compelling case to consider. The rebrand and digital push justify the EBITDA growth projections, especially in a sector where legacy brands are becoming increasingly valuable. If IAC can maintain its momentum in reducing search dependency, scaling AI-driven ad targeting, and executing its capital allocation strategy, the stock could outperform in the long term.

Takeaway: IAC's strategic shift isn't just a reaction to industry headwinds—it's a proactive play to dominate the next phase of media. For those with a multi-year horizon, this is a stock worth watching.