As filed with the Securities and Exchange Commission on May ~~9, 2023~~7, 2024

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, ~~2023~~2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________

Commission File No. 001-39356

IAC Inc.

(Exact name of registrant as specified in its charter)


Delaware						84-3727412
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

555 West 18th Street, New York, New York 10011

(Address of registrant's principal executive offices)

(212) 314-7300

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common stock, par value $0.0001

IAC

The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May ~~5, 2023,~~3, 2024, the following shares of the registrant's common stock were outstanding:


Common Stock			~~80,065,465~~80,304,683
Class B common stock			5,789,499
Total			~~85,854,964~~86,094,182

TABLE OF CONTENTS


		Page Number
PART I
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheet	3
	Consolidated Statement of Operations	4
	Consolidated Statement of Comprehensive Operations	5
	Consolidated Statement of Shareholders' Equity	6
	Consolidated Statement of Cash Flows	7
	Notes to Consolidated Financial Statements
	Note 1—The Company and Summary of Significant Accounting Policies	8
	Note 2—~~Dotdash Meredith Restructuring Charges and Transaction-Related Expenses~~	12


	~~Note~~ 3 —Financial Instruments and Fair Value Measurements	1311
	Note 4 —3—Long-term Debt	16
	Note 4—Accumulated Other Comprehensive Loss	18
	Note 5—~~Accumulated Other Comprehensive Loss (Income)~~	21
	~~Note 6—~~Segment Information	2118
	Note 7—6—Pension and Postretirement Benefit Plans	2724
	Note 8—7—Income Taxes	2825
	Note 8—Earnings Per Share	26
	Note 9—Financial Statement Details	~~Ear~~27
	~~nings (~~L ~~oss~~) ~~Per Share~~Note 10—Contingencies	29
	~~Note 10—Financial Statement Details~~	32
	Note 11—~~Contingencies~~	33
	~~Note 12—~~Related Party Transactions	3329
	~~Note 13—Subsequent Events~~	34
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3531
Item 3.	Quantitative and Qualitative Disclosures ~~about~~A bout Market Risk	5549
Item 4.	Controls and Procedures	5650
PART II
Item 1.	Legal Proceedings	5751
Item 1A.	Risk Factors	5751
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6053
Item 5.	Other Information	54
Item 6.	Exhibits	6154
	Signatures	6356

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

IAC INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)


		March 31, 2023		December 31, 2022
		(In thousands, except par value amounts)
	March 31, 2024						March 31, 2024		December 31, 2023
	(In thousands, except par value amounts)							(In thousands, except par value amounts)
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,398,836	$	1,417,390

Marketable securities	Marketable securities	202,138		239,373
Marketable securities
Marketable securities
Accounts receivable, net	Accounts receivable, net	537,945		607,809

Other current assets	Other current assets	240,804		296,563
Other current assets
Other current assets
Total current assets	Total current assets	2,379,723		2,561,135

Capitalized software, equipment, buildings, leasehold improvements and land, net		461,871		510,614
Capitalized software, buildings, land, equipment and leasehold improvements, net
Capitalized software, buildings, land, equipment and leasehold improvements, net
Capitalized software, buildings, land, equipment and leasehold improvements, net
Goodwill	Goodwill	3,030,953		3,030,168
Intangible assets, net of accumulated amortization	Intangible assets, net of accumulated amortization	1,115,589		1,170,041
Investment in MGM Resorts International	Investment in MGM Resorts International	2,875,022		2,170,182
Long-term investments	Long-term investments	327,683		325,721
Other non-current assets	Other non-current assets	563,180		625,774
TOTAL ASSETS	TOTAL ASSETS	$	10,754,021	$	10,393,635

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:	LIABILITIES:					LIABILITIES:
Current portion of long-term debt	Current portion of long-term debt	$	30,000	$	30,000
Accounts payable, trade	Accounts payable, trade	114,863		133,105
Deferred revenue	Deferred revenue	172,847		157,124
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	680,837		759,759
Total current liabilities	Total current liabilities	998,547		1,079,988

Long-term debt, net	Long-term debt, net	2,013,107		2,019,759
Long-term debt, net
Long-term debt, net
Deferred income taxes	Deferred income taxes	202,566		76,276
Other long-term liabilities	Other long-term liabilities	592,132		617,843

Redeemable noncontrolling interests	Redeemable noncontrolling interests	27,189		27,235
Redeemable noncontrolling interests
Redeemable noncontrolling interests

Commitments and contingencies
Commitments and contingencies
Commitments and contingencies	Commitments and contingencies

SHAREHOLDERS' EQUITY:	SHAREHOLDERS' EQUITY:
Common Stock, $0.0001 par value; authorized 1,600,000 shares; 84,257 and 84,184 shares issued and 81,380 and 83,083 shares outstanding at March 31, 2023 and December 31, 2022, respectively		8		8
Class B common stock, $0.0001 par value; authorized 400,000 shares; 5,789 shares issued and outstanding at March 31, 2023 and December 31, 2022		1		1
SHAREHOLDERS' EQUITY:
SHAREHOLDERS' EQUITY:
Common Stock, $0.0001 par value; authorized 1,600,000 shares; 84,638 and 84,465 shares issued and 80,288 and 80,115 shares outstanding at March 31, 2024 and December 31, 2023, respectively
Common Stock, $0.0001 par value; authorized 1,600,000 shares; 84,638 and 84,465 shares issued and 80,288 and 80,115 shares outstanding at March 31, 2024 and December 31, 2023, respectively
Common Stock, $0.0001 par value; authorized 1,600,000 shares; 84,638 and 84,465 shares issued and 80,288 and 80,115 shares outstanding at March 31, 2024 and December 31, 2023, respectively
Class B common stock, $0.0001 par value; authorized 400,000 shares; 5,789 shares issued and outstanding at March 31, 2024 and December 31, 2023
Additional paid-in-capital	Additional paid-in-capital	6,306,229		6,295,080
Retained earnings (accumulated deficit)		152,756		(265,019)
Retained earnings
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(14,641)		(13,133)
Treasury stock, 2,877 and 1,101 shares at March 31, 2023 and December 31, 2022, respectively		(177,052)		(85,323)
Treasury stock, 4,350 shares at March 31, 2024 and December 31, 2023
Total IAC shareholders' equity	Total IAC shareholders' equity	6,267,301		5,931,614
Noncontrolling interests	Noncontrolling interests	653,179		640,920
Total shareholders' equity	Total shareholders' equity	6,920,480		6,572,534
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	10,754,021	$	10,393,635

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

IAC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended March 31,

2023

2022

(In thousands, except per share data)

Revenue

1,084,271

1,325,345

Operating costs and expenses:

Cost of revenue (exclusive of depreciation shown separately below)

342,084

533,604

Selling and marketing expense

404,141

488,463

Selling and marketing expense

General and administrative expense

269,526

240,471

Product development expense

88,338

84,195

Product development expense

Depreciation

61,172

30,236

Depreciation

Amortization of intangibles

54,606

57,190

Total operating costs and expenses

1,219,867

1,434,159

Total operating costs and expenses

Operating loss

(135,596)

(108,814)

Interest expense

(38,172)

(21,912)

Unrealized gain (loss) on investment in MGM Resorts International

704,840

(187,330)

Interest expense

Unrealized gain on investment in MGM Resorts International

Other income, net

23,749

6,699

Earnings (loss) before income taxes

554,821

(311,357)

Income tax (provision) benefit

(139,502)

70,464

Net earnings (loss)

415,319

(240,893)

Other income, net

Earnings before income taxes

Income tax provision

Net earnings

Net loss attributable to noncontrolling interests

2,456

5,095

Net earnings (loss) attributable to IAC shareholders

417,775

(235,798)

Net loss attributable to noncontrolling interests

Net earnings attributable to IAC shareholders

Per share information attributable to IAC common stock and Class B common stock shareholders:

Basic earnings (loss) per share

4.72

(2.72)

Diluted earnings (loss) per share

4.57

(2.72)

Per share information attributable to IAC common stock and Class B common stock shareholders:

Basic earnings per share

Diluted earnings per share

Stock-based compensation expense by function:

Cost of revenue

Selling and marketing expense

1,743

1,508

General and administrative expense

22,844

25,371

General and administrative expense

Product development expense

4,335

2,803

Total stock-based compensation expense

28,941

29,687

Total stock-based compensation expense

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

IAC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS

(Unaudited)

Three Months Ended March 31,

2023

2022

(In thousands)

Net earnings (loss)

415,319

(240,893)

(In thousands)

Net earnings

Other comprehensive income (loss), net of income taxes:

Change in foreign currency translation adjustment

919

(3,701)

Change in foreign currency translation adjustment

Change in net unrealized gains (losses) on interest rate swaps

Change in unrealized gains and losses on available-for-sale marketable debt securities

(26)

—

Change in unrealized losses on interest rate swaps

(2,287)

—

Total other comprehensive loss, net of income taxes

(1,394)

(3,701)

Comprehensive income (loss), net of income taxes

413,925

(244,594)

Change in unrealized gains and losses on available-for-sale marketable debt securities

Total other comprehensive income (loss), net of income taxes

Comprehensive income, net of income taxes

Components of comprehensive loss (income) attributable to noncontrolling interests:

Net loss attributable to noncontrolling interests

2,456

5,095

Net loss attributable to noncontrolling interests

Change in foreign currency translation adjustment attributable to noncontrolling interests

(116)

Comprehensive loss attributable to noncontrolling interests

2,340

5,162

Comprehensive income (loss) attributable to IAC shareholders

416,265

(239,432)

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to IAC shareholders

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

IAC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Three Months Ended March 31, ~~2023~~2024 and ~~2022~~2023

(Unaudited)


		Redeemable Noncontrolling Interests		Common Stock, $0.0001 par value			Class B common stock, $0.0001 par value			Additional Paid-in-Capital				(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive (Loss) Income				Treasury Stock				Total IAC Shareholders' Equity				Noncontrolling Interests				Total Shareholders' Equity				Redeemable Noncontrolling Interests				Common Stock, $0.0001 par value	Class B common stock, $0.0001 par value	Additional Paid-in-Capital	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Total IAC Shareholders' Equity	Noncontrolling Interests	Total Shareholders' Equity
				$		Shares	$		Shares
				(In thousands)
Balance at December 31, 2022		$	27,235	$	8	84,184	$	1	5,789			$	6,295,080					$	(265,019)			$	(13,133)			$	(85,323)			$	5,931,614			$	640,920		$	6,572,534

																																							(In thousands)
Balance at December 31, 2023
Net (loss) earnings	Net (loss) earnings	(254)		—		—	—		—	—				417,775		—				—				417,775				(2,202)				415,573
Other comprehensive (loss) income, net of income taxes		—		—		—	—		—	—				—		(1,510)				—				(1,510)				116				(1,394)
Other comprehensive income (loss), net of income taxes
Stock-based compensation expense	Stock-based compensation expense	—		—		—	—		—	16,063				—		—				—				16,063				13,870				29,933
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—		—		73	—		—	(1,850)				—		—				—				(1,850)				—				(1,850)
Issuance of Angi Inc. common stock pursuant to stock-based awards, net of withholding taxes	Issuance of Angi Inc. common stock pursuant to stock-based awards, net of withholding taxes	—		—		—	—		—	(4,699)				—		2				—				(4,697)				2,287				(2,410)
Purchase of IAC treasury stock		—		—		—	—		—	—				—		—				(91,729)				(91,729)				—				(91,729)

Purchase of Angi Inc. treasury stock
Purchase of Angi Inc. treasury stock
Purchase of Angi Inc. treasury stock

Adjustment of noncontrolling interests to fair value		208		—		—	—		—	(208)				—		—				—				(208)				—				(208)
Adjustment of noncontrolling interests to redemption amount
Adjustment of noncontrolling interests to redemption amount
Adjustment of noncontrolling interests to redemption amount
Adjustment to the liquidation value of Vivian Health preferred shares	Adjustment to the liquidation value of Vivian Health preferred shares	—		—		—	—		—	1,812				—		—				—				1,812				(1,812)				—
Other	Other	—		—		—	—		—	31				—		—				—				31				—				31
Balance at March 31, 2023		$	27,189	$	8	84,257	$	1	5,789	$	6,306,229			$	152,756	$	(14,641)			$	(177,052)			$	6,267,301			$	653,179			$	6,920,480
Balance at March 31, 2024

Balance at December 31, 2021 $ 18,741 $ 8 83,922 $ 1 5,789 $ 6,265,669 $ 905,151 $ 4,397 $ — $ 7,175,226 $ 573,734 $ 7,748,960
Net loss (34) — — — — — (235,798) — — (235,798) (5,061) (240,859)
Other comprehensive loss — — — — — — — (3,634) — (3,634) (67) (3,701)
Stock-based compensation expense — — — — — 16,702 — — — 16,702 13,556 30,258
Issuance of common stock pursuant to stock-based awards, net of withholding taxes — — 153 — — (14,012) — — — (14,012) — (14,012)
Issuance of Angi Inc. common stock pursuant to stock-based awards, net of withholding taxes — — — — — (1,775) — 2 — (1,773) (700) (2,473)
Purchase of Angi Inc. treasury stock — — — — — (8,144) — — — (8,144) — (8,144)
Adjustment of noncontrolling interests to fair value 9,136 — — — — (9,136) — — — (9,136) — (9,136)
Other (26) — — — — 24 — — — 24 — 24
Balance at March 31, 2022 $ 27,817 $ 8 84,075 $ 1 5,789 $ 6,249,328 $ 669,353 $ 765 $ — $ 6,919,455 $ 581,462 $ 7,500,917


Balance at December 31, 2022	$	27,235	$	8	$	84,184	$	1	$	5,789	$	6,295,080	$	(265,019)	$	(13,133)	$	(85,323)	$	5,931,614	$	640,920	$	6,572,534
Net (loss) earnings	(254)		—		—		—		—		—		417,775		—		—		417,775		(2,202)		415,573
Other comprehensive (loss) income, net of income taxes	—		—		—		—		—		—		—		(1,510)		—		(1,510)		116		(1,394)
Stock-based compensation expense	—		—		—		—		—		16,063		—		—		—		16,063		13,870		29,933
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—		—		73		—		—		(1,850)		—		—		—		(1,850)		—		(1,850)
Issuance of Angi Inc. common stock pursuant to stock-based awards, net of withholding taxes	—		—		—		—		—		(4,699)		—		2		—		(4,697)		2,287		(2,410)
Purchase of IAC treasury stock	—		—		—		—		—		—		—		—		(91,729)		(91,729)		—		(91,729)
Adjustment of noncontrolling interests to redemption amount	208		—		—		—		—		(208)		—		—		—		(208)		—		(208)
Adjustment to the liquidation value of Vivian Health preferred shares	—		—		—		—		—		1,812		—		—		—		1,812		(1,812)		—
Other	—		—		—		—		—		31		—		—		—		31		—		31
Balance at March 31, 2023	$	27,189	$	8	$	84,257	$	1	$	5,789	$	6,306,229	$	152,756	$	(14,641)	$	(177,052)	$	6,267,301	$	653,179	$	6,920,480

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

IAC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


		Three Months Ended March 31,
	Three Months Ended March 31,								Three Months Ended March 31,
		2023		2022			2024	2023
		(In thousands)					(In thousands)
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings (loss)		$	415,319	$	(240,893)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Stock-based compensation expense		28,941		29,687
Net earnings
Adjustments to reconcile net earnings to net cash provided by operating activities:
Unrealized gain on investment in MGM Resorts International
Unrealized gain on investment in MGM Resorts International
Unrealized gain on investment in MGM Resorts International
(Gains) losses on sales of businesses and investments in equity securities (including downward adjustments), net
Deferred income taxes
Amortization of intangibles	Amortization of intangibles	54,606		57,190
Depreciation	Depreciation	61,172		30,236
Stock-based compensation expense
Provision for credit losses	Provision for credit losses	24,826		23,287

Deferred income taxes		127,154		(76,933)
Unrealized (gain) loss on investment in MGM Resorts International		(704,840)		187,330
Losses (gains) on investments in equity securities and sales of businesses, net		2,451		(35,891)
Unrealized increase in the estimated fair value of a warrant		(5,940)		(7,985)
Non-cash lease expense (including right-of-use asset impairments)	Non-cash lease expense (including right-of-use asset impairments)	58,656		13,727
Pension and postretirement benefit expense		728		36,343
Non-cash lease expense (including right-of-use asset impairments)
Non-cash lease expense (including right-of-use asset impairments)
Unrealized decrease (increase) in the estimated fair value of a warrant

Other adjustments, net
Other adjustments, net
Other adjustments, net	Other adjustments, net	(4,804)		(1,379)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:	Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable
Accounts receivable
Accounts receivable	Accounts receivable	43,023		75,562
Other assets	Other assets	26,978		5,341
Operating lease liabilities	Operating lease liabilities	(19,723)		(17,224)
Accounts payable and other liabilities	Accounts payable and other liabilities	(107,356)		(82,606)
Income taxes payable and receivable	Income taxes payable and receivable	8,610		5,786
Deferred revenue	Deferred revenue	15,366		11,324
Net cash provided by operating activities	Net cash provided by operating activities	25,167		12,902
Cash flows from investing activities:	Cash flows from investing activities:

Capital expenditures	Capital expenditures	(21,863)		(30,493)

Capital expenditures

Capital expenditures
Net proceeds from the sales of businesses and investments
Net proceeds from sales of assets
Proceeds from maturities of marketable debt securities	Proceeds from maturities of marketable debt securities	137,500		—
Purchases of marketable debt securities	Purchases of marketable debt securities	(98,520)		—

Net proceeds from the sales of businesses and investments		1,179		1,317
Purchases of investment in MGM Resorts International		—		(202,500)

Proceeds from sales of assets		29,388		87

Other, net	Other, net	4,290		—
Net cash provided by (used in) investing activities		51,974		(231,589)

Other, net

Other, net
Net cash provided by investing activities
Cash flows from financing activities:	Cash flows from financing activities:

Principal payments on Dotdash Meredith Term Loans	Principal payments on Dotdash Meredith Term Loans	(7,500)		(7,500)

Principal payments on Dotdash Meredith Term Loans

Debt issuance costs		—		(785)
Principal payments on Dotdash Meredith Term Loans
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards
Withholding taxes paid on behalf of Angi Inc. employees on net settled stock-based awards

Purchases of Angi Inc. treasury stock
Purchases of Angi Inc. treasury stock
Purchases of Angi Inc. treasury stock
Purchases of IAC treasury stock	Purchases of IAC treasury stock	(84,720)		—
Purchases of Angi Inc. treasury stock		—		(8,144)

Withholding taxes paid on behalf of IAC employees on net settled stock-based awards		(2,236)		(14,890)
Withholding taxes paid on behalf of Angi Inc. employees on net settled stock-based awards		(1,379)		(1,322)

Other, net

Other, net

Other, net	Other, net	(140)		5,159
Net cash used in financing activities	Net cash used in financing activities	(95,975)		(27,482)
Total cash used		(18,834)		(246,169)
Total cash provided (used)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	Effect of exchange rate changes on cash and cash equivalents and restricted cash	322		(1,029)
Net decrease in cash and cash equivalents and restricted cash		(18,512)		(247,198)
Net increase (decrease) in cash and cash equivalents and restricted cash
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	1,426,069		2,121,864
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	1,407,557	$	1,874,666

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

IAC today ~~consists~~is comprised of category leading businesses, including Dotdash Meredith, Angi Inc. and Care.com, as well as others ranging from early stage to established businesses.

As used herein, “IAC,” the “Company,” “we,” “our,” “us” and other similar terms refer to IAC Inc. and its subsidiaries (unless the context requires otherwise).

Total Home Roofing, LLC Sale

On November 1, 2023, Angi Inc. completed the sale of 100% of its wholly-owned subsidiary, Total Home Roofing, LLC ("Roofing"), and has reflected it as a discontinued operation in its standalone financial statements. Roofing does not meet the threshold to be reflected as a discontinued operation at the IAC level. During the fourth quarter of 2023, IAC moved Roofing to Emerging & Other and prior period financial information has been recast to conform to this presentation. Following IAC's move of Roofing to Emerging & Other, Angi Inc. has three operating segments: (i) Ads and Leads, (ii) Services and (iii) International (includes Europe and Canada).

Basis of Presentation

The Company prepares its consolidated financial statements ~~(collectively referred~~(referred to herein as "financial statements") in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP"). The financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances between and among the Company and its subsidiaries have been eliminated.

The unaudited interim financial statements have been prepared in accordance with GAAP for interim financial information and with the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited interim financial statements include all normal recurring adjustments considered necessary for a fair presentation. Interim results are not necessarily indicative of the results that may be expected for the full year. The unaudited interim financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Accounting Estimates

Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of assets and liabilities. Actual results could differ from these estimates.

On an ongoing basis, the Company evaluates its estimates, judgments and assumptions, including those related to: the fair values of cash equivalents and marketable debt and equity securities; the carrying value of accounts receivable, including the determination of the allowance for credit losses; the determination of the customer relationship period for certain costs to obtain a contract with a customer; the recoverability of right-of-use assets ("ROU assets"); the useful lives and recoverability of capitalized software, buildings, equipment ~~buildings~~ and leasehold improvements and definite-lived intangible assets; the recoverability of goodwill and indefinite-lived intangible assets; the fair value of equity securities without readily determinable fair values; the fair value of interest rate swaps; contingencies; ~~the fair value of acquisition-related contingent consideration arrangements;~~ unrecognized tax benefits; the liability for potential refunds and customer credits; the valuation allowance for deferred income tax assets; pension and postretirement benefit expenses, including actuarial assumptions regarding discount rates, expected returns on plan assets, inflation and healthcare costs; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates, judgments and assumptions on historical experience, its forecasts and budgets and other factors that the Company considers relevant.

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Interest Rate Swaps

In March 2023, Dotdash Meredith entered into interest rate swaps for a total notional amount of $350 million, towhich synthetically ~~convert~~converted a portion of the Dotdash Meredith Term Loan B from ~~floating~~a variable rate to a fixed rate to manage interest rate risk ~~exposure.~~exposure, beginning on April 3, 2023. Dotdash Meredith designated the interest rate swaps as cash flow hedges and applies hedge accounting to these contracts in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging. As cash flow hedges, the interest rate swaps are recognized at fair value on the balance sheet as either assets or liabilities, with the changes in fair value recorded in "Accumulated other comprehensive loss" in the balance sheet and reclassified into “Interest expense” in the statement of operations in the periods in which the interest rate swaps affect earnings. Dotdash Meredith assessed hedge effectiveness at the time of entering into these agreements and determined these interest rate swaps are expected to be highly effective. Dotdash Meredith evaluates the hedge effectiveness of the interest rate swaps quarterly, or more frequently, if necessary, by verifying (i) that the critical terms of the interest rate swaps continue to match the critical terms of the hedged interest payments and (ii) that it is probable the counterparties will not default. If the two requirements are met, the interest rate swaps are determined to be effective and all changes in the fair value of the interest rate swaps are recorded in "Accumulated other comprehensive loss." The cash flows related to interest settlements of the hedged monthly interest payments are classified as operating activities in the statement of cash flows, consistent with the interest expense on the related Dotdash Meredith Term Loan B. See "Note 4—3—Long-term Debt" for additional information.

General Revenue Recognition

The Company accounts for a contract with a customer when it has approval and commitment from all authorized parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services or goods is transferred to the Company's customers and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods.

From January 1, 2020 through December 31, 2022, Services recorded revenue on a gross basis. Effective January 1, 2023, Angi Inc. modified the Services terms and conditions so that the service professional, rather than Angi Inc., has the contractual relationship with the consumer to deliver the service and Angi Inc.'s performance obligation to the consumer is to connect them with the service professional. This change in contractual terms requires revenue be reported as the net amount of what is received from the consumer after deducting the amounts owed to the service professional providing the service effective for all arrangements entered into after December 31, 2022. This change in accounting treatment resulted in a decrease in revenue of $25.7 million for the three months ended March 31, 2023. There is no impact to operating loss or Adjusted EBITDA from this change in revenue recognition.

The Company's disaggregated revenue disclosures are presented in "Note 6—5—Segment Information."

Deferred Revenue

Deferred revenue consists of payments that are received or are contractually due in advance of the Company's performance obligation. The Company’s deferred revenue is reported on a contract-by-contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the remaining term or expected completion of its performance obligation is one year or less. The current and non-current deferred revenue balances were ~~$172.8~~$128.2 million and $0.2 million, respectively, at March 31, ~~2023,~~2024, and ~~$157.1~~$143.4 million and ~~$0.2~~$0.1 million, respectively, at December 31, ~~2022.~~2023. During the three months ended March 31, 2024, the Company recognized $79.2 million of revenue that was included in the deferred revenue balance at December 31, 2023. The deferred revenue balance at March 31, 2024 also reflects the reduction of $33.2 million related to the sale of Mosaic Group in the first quarter of 2024. During the three months ended March 31, 2023, the Company recognized $95.6 million of revenue that was included in the deferred revenue balance at December 31, 2022. ~~During the three months ended March 31, 2022, the Company recognized $90.0 million of revenue that was included in the deferred revenue balance at December 31, 2021.~~ The current and non-current deferred revenue balances were ~~$165.5~~$157.1 million and ~~$0.4~~$0.2 million, respectively, at December 31, ~~2021.~~2022. Non-current deferred revenue is included in "Other long-term liabilities" in the balance sheet.

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Practical Expedients and Exemptions

For contracts that have an original duration of one year or less, the Company uses the practical expedient available under ~~FASB Accounting Standards Update ("ASU") No. 2014-09,~~ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), applicable to such contracts and does not consider the time value of money.

In addition, as permitted under the practical expedient available under ~~ASU No. 2014-09~~, ASC 606, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is tied to sales-based or usage-based royalties, allocated entirely to unsatisfied performance obligations, or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which it has the right to invoice for services performed.

~~Costs to Obtain a Contract with a Customer~~

The Company uses a portfolio approach to assess the accounting treatment of the incremental costs to obtain a contract with a customer. The Company recognizes an asset if we expect to recover those costs. To the extent that these costs are capitalized, the resultant asset is amortized on a systematic basis consistent with the pattern of the transfer of the services to which the asset relates. The Company has determined that certain costs, primarily commissions paid to employees pursuant to certain sales incentive programs and mobile app store fees, meet the requirements to be capitalized as a cost of obtaining a contract.

~~Commissions Paid to Employees Pursuant to Sales Incentive Programs~~

The Company has determined that commissions paid to employees pursuant to certain sales incentive programs meet the requirements to be capitalized as the incremental costs to obtain a contract with a customer. When customer renewals are expected and the renewal commission is not commensurate with the initial commission, the average customer life includes renewal periods. Capitalized commissions paid to employees pursuant to these sales incentive programs are amortized over the estimated customer relationship period and are included in "Selling and marketing expense" in the statement of operations. The Company calculates the anticipated customer relationship period as the average customer life, which is based on historical data.

For sales incentive programs where the anticipated customer relationship period is one year or less, the Company has elected the practical expedient to expense the commissions as incurred. Effective October 1, 2022, the Ads business, within Angi Inc., began expensing commissions, rather than capitalizing them, based upon a review of the duration of the related customer relationship period which have been determined to be less than a year.

~~App Store Fees~~

The Company pays fees to the Apple App Store and the Google Play Store for the distribution of our paid mobile apps. The Company capitalizes and amortizes mobile app store fees related to subscriptions over the term of the applicable subscription. The amortization of mobile app store fees is included in "Cost of revenue" in the statement of operations.

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The ~~following table presents~~Company also applies the ~~capitalized costs~~practical expedient to ~~obtain a contract with a~~expense sales commissions as incurred where the anticipated customer ~~at March 31, 2023 and December 31, 2022, respectively:~~relationship period is one year or less.

March 31, 2023 December 31, 2022
Sales Commissions App Store Fees Total Sales Commissions App Store Fees Total
(In thousands)
Current $ 36,157 $ 7,749 $ 43,906 $ 39,590 $ 8,266 $ 47,856
Non-current 6,086 — 6,086 5,667 — 5,667
Total $ 42,243 $ 7,749 $ 49,992 $ 45,257 $ 8,266 $ 53,523

~~The current and non-current capitalized costs to obtain a contract with a customer are included in "Other current assets" and "Other non-current assets," respectively, in the balance sheet.~~

~~Commissions Paid to Third-Party Agent Sales of Magazine Subscriptions~~

Dotdash Meredith uses third-party agents to obtain certain subscribers. The agents are paid a commission, which can be as much as the subscription price charged to the subscriber. Dotdash Meredith subscriptions do not have substantive termination penalties; therefore, the contract term is determined on an issue-by-issue basis. Accordingly, these commissions do not qualify for capitalization because there is no contract with a customer until a copy is served to a customer; therefore, these costs are expensed when the publication is sent to the customer. Dotdash Meredith recognizes a liability to the extent the commission is refundable to the third-party agent. Dotdash Meredith expenses additional amounts paid to agents (such as per subscriber bounties) to acquire subscribers as incurred. Expenses related to third-party agent sales of magazine subscriptions are included in "Selling and marketing expense" in the statement of operations.

Certain Risks and Concentrations—Services Agreement with Google (the "Services Agreement")

The Company and Google are parties to an amended Services Agreement, which automatically renewed effective March 31, 2023 and now expires on March 31, 2025. The Company earns certain other advertising revenue from Google that is not attributable to the Services Agreement. A meaningful portion of the Company’s net cash from operating activities that it can freely access is attributable to revenue earned pursuant to the Services Agreement and other revenue earned from Google.

For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, total revenue earned from Google was ~~$172.9~~$131.4 million and ~~$193.4~~$172.9 million, respectively, representing ~~16%~~14% and ~~15%~~16%, respectively, of the Company's revenue. The total revenue earned from the Services Agreement for the three months ended March 31, 2024 and 2023 ~~and 2022~~ was ~~$138.8~~$102.9 million and ~~$147.1~~$138.8 million, respectively, representing ~~13%~~11% and ~~11%~~13%, respectively, of the Company's total revenue. The related accounts receivable totaled ~~$70.9~~$45.7 million and ~~$74.1~~$52.2 million at March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively.

The revenue attributable to the Services Agreement is earned by Ask Media Group and the Desktop business, which comprise the Search segment. For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, revenue earned from the Services Agreement was ~~$120.3~~$85.4 million and ~~$120.5~~$120.3 million, respectively, within Ask Media Group and ~~$18.5~~$17.4 million and ~~$26.6~~$18.5 million, respectively, within the Desktop business.

The Services Agreement requires that the Company comply with certain guidelines promulgated by Google. Google may generally unilaterally update its policies and guidelines without advance notice. These updates may be specific to the Services Agreement or could be more general and thereby impact the Company as well as other companies. These policy and guideline updates have in the past and could in the future require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which have been and could be costly to address or negatively impact revenue and have had and in the future could have an adverse effect on our financial condition and results of operations. ~~As described below, Google has made changes~~

Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted by the Company

There were no recently issued accounting pronouncements adopted by the Company during the three months ended March 31, 2024.

Recent Accounting Pronouncements Not Yet Adopted by the Company

Accounting Standards Update ("ASU") 2023-07—Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU No. 2023-07, which is intended to provide users of financial statements with more decision-useful information about reportable segments of a public business entity, primarily through enhanced disclosures of significant segment expenses. This ASU requires annual and interim disclosures of significant expenses that are regularly provided to the ~~policies under the Services Agreement~~chief operating decision maker ("CODM") and ~~has~~included within each reported measure of segment profit or loss and an amount and description of its composition of other segment items. The provisions of this ASU also ~~made industry-wide changes that have negatively impacted the Desktop business-to-consumer ("B2C") business. Google may make changes~~require entities to include all annual disclosures required by Topic 280 in the ~~future~~interim periods and permits entities to include multiple measures of a segment's profit or loss if such measures are used by the CODM to assess segment performance and determine allocation of resources, provided that ~~could~~at least one of those measures is determined in a way that is consistent with the measurement principles under GAAP. The amendments in ASU 2023-07 apply retrospectively and are effective for fiscal years beginning after December 15, 2023 and interim periods after December 15, 2024. Early adoption is permitted. The Company does not plan to early adopt and is currently assessing the impact of adopting the ~~revenue earned from Google, including under~~updated guidance on the ~~Services Agreement.~~financial statements.

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

AsASU 2023-09—Income Taxes (Topic 740)—Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No. 2023-09, which establishes required categories and a ~~result~~quantitative threshold to the annual tabular rate reconciliation disclosure and disaggregated jurisdictional disclosures of ~~certain industry-wide policy changes combined with increased enforcement of policies under the Services Agreement in prior periods,~~income taxes paid. The guidance's annual requirements are effective for the Company ~~discontinued~~beginning with the ~~introduction of new products in 2021. Therefore,~~December 31, 2025 reporting period. Early adoption is permitted and prospective disclosure should be applied, however, retrospective disclosure is permitted. The Company is currently assessing the ~~current B2C revenue stream relates solely to~~pronouncement and its impact on its income tax disclosures, but it does not impact the ~~then existing installed base of products. As a result, the revenue and profits of the B2C business have declined significantly and the Company expects that trend to continue.~~

~~Recent Accounting Pronouncements~~

~~There are no recently issued accounting pronouncements that are expected to have a material effect on the~~ Company's results of operations, financial condition or cash ~~flows of the Company.~~flows.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

In the fourth quarter of 2022, the Angi Inc. segment presentation was changed to reflect its four operating segments, which include: (i) Ads and Leads, (ii) Services, (iii) Roofing and (iv) International (consisting of businesses in Europe and Canada). Angi Inc.'s financial information for the first quarter of 2022 has been recast to conform to the current period presentation.

NOTE 2—~~DOTDASH MEREDITH RESTRUCTURING CHARGES AND TRANSACTION-RELATED EXPENSES~~

~~Restructuring Charges~~

During 2022, Dotdash Meredith management committed to several actions to improve efficiencies and better align its cost structure following the acquisition of Meredith on December 1, 2021. These actions included: (i) the discontinuation of certain print publications and the shutdown of PeopleTV, for which the related expense was primarily reflected in the first quarter of 2022, (ii) a voluntary retirement program announced in the first quarter of 2022, for which the related expense was primarily reflected in the first half of 2022, (iii) the consolidation of certain leased office space, for which the related expense was reflected in the third quarter of 2022 and (iv) a reduction in force plan, for which the related expenses were accrued primarily in the fourth quarter of 2022. These actions resulted in $80.2 million of restructuring charges incurred for the year ended December 31, 2022.

~~A summary of the costs incurred, payments and related accruals is presented below.~~ ~~The Company~~ ~~anticipates the estimated remaining costs associated with the 2022 restructuring events will be paid by December 31, 2023 from existing cash on hand.~~

Three Months Ended March 31, 2023
Accrued December 31, 2022 Charges Incurred Reversal of Initial Cost Payments Accrued March 31, 2023 Cumulative Charges Incurred Estimated Remaining Costs
(In thousands)
Digital $ 10,950 $ 859 $ (812) $ (4,793) $ 6,204 $ 39,272 $ —
Print 12,055 1,109 (1,201) (4,314) 7,649 33,340 87
Other (a)
4,389 186 (182) (1,504) 2,889 7,585 91
Total $ 27,394 $ 2,154 $ (2,195) $ (10,611) $ 16,742 $ 80,197 $ 178
~~_____________________~~

~~(a)~~ ~~Other comprises unallocated corporate expenses, which are corporate overhead expenses not attributable to the Digital or Print segments.~~

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Three Months Ended March 31, 2022
Charges Incurred Payments
Non-cash (b)
Accrued March 31, 2022
(In thousands)
Digital $ 5,090 $ (394) $ — $ 4,696
Print 15,625 (2,127) (377) 13,121
Other (a)
1,722 (106) — 1,616
Total $ 22,437 $ (2,627) $ (377) $ 19,433
~~_____________________~~

~~(b)~~ ~~Includes $0.4 million related to the write-off of inventory.~~

~~The costs are allocated as follows in the~~ ~~statement of operations~~:

Three Months Ended March 31,
2023 2022
(In thousands)
Cost of revenue $ 557 $ 12,182
Selling and marketing expense (862) 5,599
General and administrative expense 243 4,313
Product development expense 21 343
Total $ (41) $ 22,437

~~Transaction-Related Expenses~~

For the three months ended March 31, 2023 and 2022, Dotdash Meredith incurred less than $0.1 million and $4.0 million, respectively, of transaction-related expenses related to the acquisition of Meredith.

~~NOTE 3—~~FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Marketable Securities

At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, the fair value of marketable securities are as follows:


	March 31, 2024					March 31, 2024		December 31, 2023
	(In thousands)						(In thousands)
		March 31, 2023		December 31, 2022
		(In thousands)
Marketable equity securities		$	3,167	$	4,317
Available-for-sale marketable debt securities
Available-for-sale marketable debt securities
Available-for-sale marketable debt securities	Available-for-sale marketable debt securities	198,971		235,056
Total marketable securities	Total marketable securities	$	202,138	$	239,373

~~At March 31, 2023, the~~Marketable securities are carried at fair value. The Company has ~~two~~no investments in marketable equity securities, ~~other than~~following the change in classification of its investment in MGM Resorts International ("MGM")~~. These~~ to an equity method investment in the fourth quarter of 2023, described below. At March 31, 2023, the Company had two investments in marketable equity securities, ~~are carried at fair value following~~other than its investment in MGM, including one investment that was fully impaired in the ~~investees' initial public offerings ("IPO"). Prior~~first quarter of 2023 due to the ~~IPOs, these investments were accounted for as equity securities without readily determinable fair values.~~investee declaring bankruptcy and another investment that was sold in the third quarter of 2023. The Company recorded net unrealized pre-tax losses ~~and gains~~ for these investments of $1.2 million ~~and $34.4 million~~ during the three months ended ~~March 31, 2023 and~~ March 31, ~~2022~~2023~~, respectively.~~. The unrealized pre-tax losses ~~and gains~~ related to these investments are included in "Other income, net" in the statement of operations.

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, current available-for-sale marketable debt securities are as follows:


		March 31, 2023								December 31, 2022
		Amortized cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		(In thousands)
	March 31, 2024																			March 31, 2024				December 31, 2023
	Amortized cost																	Amortized cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value	Amortized cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)																						(In thousands)
Treasury discount notes	Treasury discount notes	$	198,935	$	39	$	(3)	$	198,971	$	234,987	$	75	$	(6)	$	235,056
Total available-for-sale marketable debt securities	Total available-for-sale marketable debt securities	$	198,935	$	39	$	(3)	$	198,971	$	234,987	$	75	$	(6)	$	235,056

The contractual maturities of debt securities classified as current available-for-sale at March 31, ~~2023~~2024 and December 31, ~~2022~~2023 were within one year. There were no investments in available-for-sale marketable debt securities that had been in a continuous unrealized loss position for longer than twelve months at March 31, ~~2023~~2024 and December 31, ~~2022.~~2023.

Investment in MGM Resorts International

March 31, 2023 December 31, 2022
(In thousands)
Investment in MGM Resorts International $ 2,875,022 $ 2,170,182


	March 31, 2024		December 31, 2023
	(In thousands)
Investment in MGM	$	3,055,601	$	2,891,850

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

At March 31, ~~2023,~~2024, the Company owns 64.7 million common shares of MGM ~~including 4.5 million~~which represents 20.6% of MGM's common shares ~~purchased in~~outstanding. During the ~~first~~fourth quarter of ~~2022~~2023, due to MGM's ongoing share repurchase program, which increased the Company's ownership interest passively, the Company determined that the equity method of accounting applied and elected to account for ~~$202.5 million, representing~~its investment in MGM pursuant to the fair value option. Prior to the fourth quarter of 2023, the Company's investment in MGM was accounted for as an equity security with a ~~17.6% ownership.~~ readily determinable fair value, with changes in fair value recognized through income each period. Since the Company has always marked its investment in MGM to fair value through income each period the election of the fair value option results in no change from its historical accounting for this investment. The fair value of the investment in MGM is remeasured each reporting period based upon MGM's closing stock price on the New York Stock Exchange on the last trading day in the reporting period and any unrealized pre-tax gains or losses are included in the statement of operations. For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, the Company ~~recorded~~recognized an unrealized pre-tax gain ~~and loss~~ of ~~$704.8~~$163.8 million and ~~$187.3~~$704.8 million, respectively, on its investment in MGM. The cumulative unrealized net pre-tax gain through March 31, ~~2023~~2024 is $~~1.6~~1.8 billion. A $2.00 increase or decrease in the share price of MGM would result in an unrealized gain or loss, respectively, of $129.4 million. At May ~~5, 2023,~~3, 2024, the ~~carrying~~fair value of the Company's investment in MGM was $~~2.8~~2.66 billion.

The following table presents MGM's summarized financial information for the three months ended March 31, 2024. As noted above, the Company has elected to account for its investment in MGM pursuant to the fair value option. By electing the fair value option, the Company’s investment in MGM is remeasured each reporting period with any changes recognized through income based on MGM’s closing stock price. As a result, the value of our investment and the financial impacts in any given period are not necessarily correlated with the income statement information presented below.


	Three Months Ended March 31, 2024
	(In thousands)
Revenues	$	4,383,470
Expenses	$	3,899,968
Net income	$	299,726
Net income attributable to MGM	$	217,476

Long-term Investments

Long-term investments consist of:


		March 31, 2023		December 31, 2022
		(In thousands)
	March 31, 2024					March 31, 2024		December 31, 2023
	(In thousands)						(In thousands)
Equity securities without readily determinable fair values	Equity securities without readily determinable fair values	$	322,707	$	323,530
Equity method investment		4,976		2,191
Other
Total long-term investments	Total long-term investments	$	327,683	$	325,721

Equity Securities without Readily Determinable Fair Values

The following table presents a summary of unrealized pre-tax gains and losses recorded in "Other income, net" in the statement of operations as adjustments to the carrying value of equity securities without readily determinable fair values held at March 31, 2024 and 2023. ~~There were no unrealized pre-tax gains or losses recorded for the three months ended March 31, 2022.~~

Three Months Ended
March 31, 2023

~~(In thousands)~~

~~Upward adjustments (gross unrealized pre-tax gains)~~

—

~~Downward adjustments including impairments (gross unrealized pre-tax losses)~~

~~(822)~~

~~Total~~

~~(822)~~


	Three Months Ended March 31,
	2024		2023
	(In thousands)

Downward adjustments including impairments (gross unrealized pre-tax losses)	$	(7,867)	$	(822)
Total	$	(7,867)	$	(822)

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The cumulative upward and downward adjustments (including impairments) to the carrying value of equity securities without readily determinable fair values held at March 31, ~~2023~~2024 were ~~$36.9~~$37.8 million and ~~$136.8~~$133.8 million, respectively.

Realized and unrealized pre-tax gains and losses for the Company's investments without readily determinable fair values for the three months ended March 31, ~~2023~~2024 and ~~2022~~2023 are as follows:


		Three Months Ended March 31,
				2023		2022
				(In thousands)
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
			2024					2024		2023
			(In thousands)						(In thousands)
Realized pre-tax gains, net, for equity securities sold	Realized pre-tax gains, net, for equity securities sold			$	7	$	468
Unrealized pre-tax losses, net, on equity securities held	Unrealized pre-tax losses, net, on equity securities held			(822)		—
Total pre-tax (losses) gains, net recognized				$	(815)	$	468
Total pre-tax losses, net recognized

All pre-tax gains and losses on equity securities without readily determinable fair values, realized and unrealized, are recognized in "Other income, net" in the statement of operations.

~~Equity Method Investment~~

The Company owns common shares of Turo Inc. ("Turo"), a peer-to-peer car sharing marketplace. This investment is accounted for under the equity method of accounting given the Company's ownership interest at March 31, 2023 of approximately 26.5% on a fully diluted basis in the form of preferred shares, which are not common stock equivalents. The Company accounts for the equity earnings (losses) for this investment on a one quarter lag. These equity earnings (losses) were immaterial.

Fair Value Measurements

The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:

•Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.

•Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company's Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.

•Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.

1513

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:


		March 31, 2023								March 31, 2024
		Quoted Market Prices for Identical Assets in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements		Level 1	Level 2	Level 3	Total Fair Value Measurements
		(In thousands)								(In thousands)
Assets:	Assets:
Cash equivalents:	Cash equivalents:
Cash equivalents:
Cash equivalents:
Money market funds
Money market funds
Money market funds	Money market funds	$	1,007,765	$	—	$	—	$	1,007,765
Treasury discount notes	Treasury discount notes	—		87,250		—		87,250
Time deposits	Time deposits	—		15,113		—		15,113
Marketable securities:	Marketable securities:
Marketable equity securities		3,167		—		—		3,167

Treasury discount notes

Treasury discount notes

Treasury discount notes	Treasury discount notes	—		198,971		—		198,971
Investment in MGM	Investment in MGM	2,875,022		—		—		2,875,022
Other non-current assets:	Other non-current assets:
Warrant	Warrant	—		—		52,739		52,739
Warrant
Warrant
Interest rate swaps(a)
Total	Total	$	3,885,954	$	301,334	$	52,739	$	4,240,027

Liabilities:
Interest rate swaps(a)		$	—	$	(2,996)	$	—	$	(2,996)

_____________________

(a) Interest rate swaps relate to the $350 million notional amount ofentered into to hedge Dotdash Meredith's Term Loan BB. The related asset at March 31, 2024 and liability at December 31, 2023 are included in "Other non-current assets" and "Other long-term ~~liabilities"~~liabilities," respectively, in the balance sheet. See "Note 1—The Company and Summary of Significant Accounting Policies" and "Note 4—3—Long-term Debt" for additional information. The fair value of interest rate swaps was determined using discounted cash flows derived from observable market prices, including swap curves, which are Level 2 inputs.


		December 31, 2022									December 31, 2023
		Quoted Market Prices for Identical Assets in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements			Level 1	Level 2	Level 3	Total Fair Value Measurements
		(In thousands)									(In thousands)
Assets:	Assets:									Assets:
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	862,829	$	—	$	—	$	862,829
Treasury discount notes	Treasury discount notes	—		137,219		—		137,219
Time deposits	Time deposits	—		16,018		—		16,018
Marketable securities:	Marketable securities:
Marketable equity securities		4,317		—		—		4,317

Treasury discount notes

Treasury discount notes

Treasury discount notes	Treasury discount notes	—		235,056		—		235,056
Investment in MGM	Investment in MGM	2,170,182		—		—		2,170,182
Other non-current assets:	Other non-current assets:
Warrant	Warrant	—		—		46,799		46,799
Warrant
Warrant
Total	Total	$	3,037,328	$	388,293	$	46,799	$	3,472,420

Liabilities:
Liabilities:
Liabilities:
Other long-term liabilities
Other long-term liabilities
Other long-term liabilities
Interest rate swaps(a)
Interest rate swaps(a)
Interest rate swaps(a)

1614

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents the changes in the Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


		Three Months Ended March 31,
		2023		2022
		Warrant			Warrant			Contingent Consideration Arrangements		Three Months Ended March 31,
		(In thousands)					2024					2023
	Warrant


											(In thousands)
Balance at January 1	Balance at January 1	$	46,799		$	109,294		$	(612)

Total net gains:
Total net (losses) gains:

Total net (losses) gains:

Total net (losses) gains:
Fair value adjustments included in earnings
Fair value adjustments included in earnings
Fair value adjustments included in earnings	Fair value adjustments included in earnings	5,940			7,985			612
Balance at March 31	Balance at March 31	$	52,739		$	117,279		$	—
Balance at March 31
Balance at March 31

Warrant

The Company owns preferred shares of Turo Inc. ("Turo"), a peer-to-peer car sharing marketplace, which is accounted for as an equity security without a readily determinable fair value, as the preferred shares are not common stock equivalents. As part of the Company's original investment in Turo preferred shares, the Company received a warrant that is recorded at fair value each reporting period using an option pricing model with any change in fair value included in "Other income, net" in the statement of operations. The warrant is measured using significant unobservable inputs and is classified in the fair value hierarchy table as Level 3. The warrant is included in "Other non-current assets" in the balance sheet.

~~Contingent Consideration Arrangements~~

At March 31, 2023, the Company has no contingent consideration arrangements outstanding. In connection with the Meredith acquisition on December 1, 2021, the Company assumed a contingent consideration arrangement liability of $0.6 million, which was written off during the first quarter of 2022 due to a change in estimate of the liability related to this arrangement.

Assets measured at fair value on a nonrecurring basis

The Company's non-financial assets, such as goodwill, intangible assets, ROU assets, capitalized software, buildings, equipment ~~buildings~~ and leasehold improvements, are adjusted to fair value only when an impairment is recognized. The Company's financial assets, comprising equity securities without readily determinable fair values, are adjusted to fair value when observable price changes for similar or identical securities are identified or an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

ROU Assets and Related Leasehold Improvements, Furniture and Equipment

During the first quarter of 2023, ~~the Company~~Dotdash Meredith recorded impairment charges of $70.0 million related to certain unoccupied leased office space due to the continued decline in the commercial real estate ~~market; a~~market consisting of impairments of $44.7 million ~~impairment~~and $25.3 million of an ROU asset and ~~a $25.3 million impairment of~~related leasehold improvements, furniture and equipment, ~~which~~respectively.

The impairment charges related to ROU assets are included in "General and administrative expense" and ~~"Depreciation," respectively,~~the impairment charges related to leasehold improvements, furniture and equipment are included in "Depreciation" in the statement of operations. The impairment charges represent the amount by which the carrying value of the asset group exceeded its estimated fair value, calculated using a discounted cash flow approach using sublease market assumptions of the expected cash flows and discount rate. The impairment charges were allocated between the ROU assets and related leasehold improvements, furniture and equipment of the asset group based on their relative carrying values.

The aggregate carrying value of goodwill for which the most recent estimate of the excess of fair value over carrying value is less than 20% is $153.6 million of goodwill at Mosaic Group. There is one indefinite-lived intangible asset at Dotdash Meredith Digital with a value of approximately $126.0 million for which the excess of fair value over carrying value is less than 20%.

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Financial instruments measured at fair value only for disclosure purposes

The ~~following table presents the carrying value and the~~total fair value of ~~financial instruments measured at fair value only for disclosure purposes:~~

March 31, 2023 December 31, 2022
Carrying
Value Fair
Value Carrying
Value Fair
Value
(In thousands)
Current portion of long-term debt $ (30,000) $ (27,750) $ (30,000) $ (26,700)
Long-term debt, net(a)
$ (2,013,107) $ (1,791,469) $ (2,019,759) $ (1,708,413)

~~_____________________~~

~~(a)At March 31, 2023 and December 31, 2022,~~ the ~~carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $19.4 million and $20.2 million, respectively~~.

~~At March 31, 2023 and December 31, 2022, the fair value of~~outstanding long-term debt, including the current portion, is estimated using observable market prices or indices for similar liabilities, which are Level 2 ~~inputs.~~

~~NOTE 4—LONG-TERM DEBT~~

~~Long-term debt consists of:~~

March 31, 2023 December 31, 2022
(In thousands)
Dotdash Meredith Debt
Dotdash Meredith Term Loan A ("Dotdash Meredith Term Loan A") due December 1, 2026 $ 328,125 $ 332,500
Dotdash Meredith Term Loan B ("Dotdash Meredith Term Loan B") due December 1, 2028 1,234,375 1,237,500
Total Dotdash Meredith long-term debt 1,562,500 1,570,000
Less: current portion of Dotdash Meredith long-term debt 30,000 30,000
Less: original issue discount 5,100 5,310
Less: unamortized debt issuance costs 9,762 10,215
Total Dotdash Meredith long-term debt, net 1,517,638 1,524,475
ANGI Group Debt
3.875% ANGI Group Senior Notes due August 15, 2028 ("ANGI Group Senior Notes"); interest payable each February 15 and August 15 500,000 500,000
Less: unamortized debt issuance costs 4,531 4,716
Total ANGI Group long-term debt, net 495,469 495,284
Total long-term debt, net $ 2,013,107 $ 2,019,759
inputs, and was approximately $1.95 billion at both March 31, 2024 and December 31, 2023.

1815

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 3—LONG-TERM DEBT

Long-term debt consists of:


	March 31, 2024		December 31, 2023
	(In thousands)
Dotdash Meredith Debt
Dotdash Meredith Term Loan A ("Dotdash Meredith Term Loan A") due December 1, 2026	$	310,625	$	315,000
Dotdash Meredith Term Loan B ("Dotdash Meredith Term Loan B") due December 1, 2028	1,221,875		1,225,000
Total Dotdash Meredith long-term debt	1,532,500		1,540,000
Less: current portion of Dotdash Meredith long-term debt	34,375		30,000
Less: original issue discount	4,259		4,470
Less: unamortized debt issuance costs	7,979		8,423
Total Dotdash Meredith long-term debt, net	1,485,887		1,497,107

ANGI Group Debt
3.875% ANGI Group Senior Notes due August 15, 2028 ("ANGI Group Senior Notes"); interest payable each February 15 and August 15	500,000		500,000


Less: unamortized debt issuance costs	3,759		3,953
Total ANGI Group long-term debt, net	496,241		496,047

Total long-term debt, net	$	1,982,128	$	1,993,154

Dotdash Meredith Term Loans and Dotdash Meredith Revolving Facility

On December 1, 2021, Dotdash Meredith entered into a credit agreement ("Dotdash Meredith Credit Agreement"), which provides for (i) the five-year $350 million Dotdash Meredith Term Loan A, (ii) the seven-year $1.25 billion Dotdash Meredith Term Loan B (and together with the Dotdash Meredith Term Loan A, the "Dotdash Meredith Term Loans") and (iii) a five-year $150 million revolving credit facility ("Dotdash Meredith Revolving Facility"). The Dotdash Meredith Term Loan A bears interest at an adjusted term secured overnight financing rate ("Adjusted Term SOFR") as defined in the Dotdash Meredith Credit Agreement plus an applicable margin depending on Dotdash Meredith's most recently reported consolidated net leverage ratio, as defined in the Dotdash Meredith Credit Agreement. The adjustment to the secured overnight financing rate is fixed at 0.10% for the Dotdash Meredith Term Loan A. The Dotdash Meredith Term Loan B has a varying adjustment of 0.10%, 0.15% or 0.25% based upon the duration of the borrowing period. At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, the Dotdash Meredith Term Loan A bore interest at Adjusted Term SOFR plus 2.25%, or ~~6.94%~~7.68% and ~~5.91%~~7.69%, respectively, and the Dotdash Meredith Term Loan B bore interest at Adjusted Term SOFR, subject to a minimum of 0.50%, plus 4.00%, or ~~8.77%~~9.43% and ~~8.22%~~9.44%, respectively. Interest payments are due at least quarterly through the terms of the Dotdash Meredith Term Loans.

In March 2023, Dotdash Meredith entered into interest rate swaps on the Dotdash Meredith Term Loan B for a total notional amount of $350 million with a maturity date of April 1, 2027. The interest rate swaps synthetically converted $350 million of the Dotdash Meredith Term Loan B for the duration of the interest rate swaps from a variable rate to a fixed rate of approximately 7.92% ((i) the weighted average fixed interest rate of approximately 3.82% on the interest rate swaps plus (ii) the adjustment to the secured overnight financing rate of 0.10% plus (iii) the base rate of 4.00%), beginning on April 3, 2023.

The interest rate swaps are expected to be highly effective. See "Note 4—Accumulated Other Comprehensive Loss" for the net unrealized gains and losses before reclassifications in "Accumulated other comprehensive loss" and realized gains reclassified into "Interest expense" for the three months ended March 31, 2024 and 2023. At March 31, 2024, approximately $3.9 million is expected to be reclassified into interest expense within the next twelve months as realized gains. The related asset of $3.9 million and liability of $0.9 million are included in "Other non-current assets" and “Other long-term liabilities” in the balance sheet at March 31, 2024 and December 31, 2023, respectively.

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The Dotdash Meredith Term Loan A requires quarterly principal payments of approximately $4.4 million through December 31, 2024, $8.8 million through December 31, 2025 and approximately $13.1 million thereafter through maturity. The Dotdash Meredith Term Loan B requires quarterly payments of $3.1 million through maturity. The Dotdash Meredith Term Loan B may require additional annual principal payments as part of an excess cash flow sweep provision, the amount of which, in part, is governed by the applicable net leverage ~~ratio.~~ratio and further subject to the excess cash flow exceeding $80 million as defined in the Dotdash Meredith Credit Agreement. No such payment was required related to the period ended December 31, ~~2022.~~

In March 2023, Dotdash Meredith entered into interest rate swaps on the Dotdash Meredith Term Loan B for a total notional amount of $350 million with a maturity date of April 1, 2027. The interest rate swaps synthetically convert $350 million of the Dotdash Meredith Term Loan B for the duration of the interest rate swaps to a fixed rate of approximately 7.92% ((i) the weighted average fixed interest rate of approximately 3.82% on the interest rate swaps plus (ii) the adjustment to the secured overnight financing rate of 0.10% plus (iii) the base rate of 4.00%), beginning April 2023.

The interest rate swaps are expected to be highly effective. For the three months ended March 31, 2023, the unrealized loss recognized in "Accumulated other comprehensive loss" was $2.3 million, net of income tax benefit, and the related liability of $3.0 million is included in “Other non-current liabilities” in the balance sheet at March 31, 2023. There were no realized gains or losses reclassified into “Interest expense” in the three months ended March 31, 2023. At March 31, 2023, $3.0 million is expected to be reclassified into interest expense within the next twelve months as a realized gain.

There were no outstanding borrowings under the Dotdash Meredith Revolving Facility at March 31, ~~2023~~2024 and December 31, ~~2022.~~2023. The annual commitment fee on undrawn funds is based on Dotdash Meredith's consolidated net leverage ratio, as defined in the Dotdash Meredith Credit Agreement, most recently reported and was 40 basis points at both March 31, ~~2023~~2024 and December 31, ~~2022.~~2023. Any borrowings under the Dotdash Meredith Revolving Facility would bear interest, at Dotdash Meredith's option, at either a base rate or Adjusted Term SOFR, plus an applicable margin, which is based on Dotdash Meredith's consolidated net leverage ratio.

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

As of the last day of any calendar quarter, if either (i) $1.00 or more of loans under the Dotdash Meredith Revolving Facility or Dotdash Meredith Term Loan A are outstanding, or (ii) the outstanding face amount of undrawn letters of credit, other than cash collateralized letters of credit at 102% of face value, exceeds $25 million, subject to certain increases for qualifying material acquisitions, then Dotdash Meredith will not permit the consolidated net leverage ratio, which permits netting of up to $250 million in cash and cash equivalents, as of the last day of such quarter to exceed 5.5 to 1.0. The Dotdash Meredith Credit Agreement also contains covenants that would limit Dotdash Meredith’s ability to pay dividends, incur incremental secured indebtedness, or make distributions or certain investments in the event a default has occurred or if Dotdash Meredith’s consolidated net leverage ratio exceeds 4.0 to 1.0, subject to certain available amounts as defined in the Dotdash Meredith Credit Agreement. This ratio was exceeded for both test periods ended March 31, ~~2023~~2024 and December 31, ~~2022.~~2023. The Dotdash Meredith Credit Agreement also permits the Company to, among other things, contribute cash to Dotdash Meredith which will provide additional liquidity to ensure that Dotdash Meredith does not exceed certain consolidated net leverage ratios for any test period, as further defined in the Dotdash Meredith Credit Agreement. In connection with these capital contributions, Dotdash Meredith may make distributions to ~~IAC~~the Company in amounts not more than any such capital contributions, provided that no default has occurred and is continuing. Such capital contributions and subsequent distributions impact the consolidated net leverage ratios of Dotdash Meredith. In March 2024 and 2023, the Company contributed ~~$135.0~~$55 million and $135 million, respectively, to Dotdash Meredith, which Dotdash Meredith subsequently distributed back to the Company in April 2024 and 2023, respectively. In addition, Dotdash Meredith distributed $105 million back to the Company in January 2024 related to the Company's contribution in December 2023.

The obligations under the Dotdash Meredith Credit Agreement are guaranteed by certain of Dotdash Meredith's wholly-owned subsidiaries and are secured by substantially all of the assets of Dotdash Meredith and certain of its subsidiaries.

ANGI Group Debt

ANGI Group, LLC ("ANGI Group"), a direct wholly-owned subsidiary of Angi Inc., issued the ANGI Group Senior Notes on August 20, 2020. At any time prior to August 15, 2023, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium. Thereafter, theseThese notes may be redeemed at the redemption prices, plus accrued and unpaid interest thereon, if any, ~~to the applicable redemption date~~ as set forth in the indenture governing the notes.

The indenture governing the ANGI Group Senior Notes contains a covenant that would limit ANGI Group’s ability to incur liens for borrowed money in the event a default has occurred or ANGI Group’s secured leverage ratio exceeds 3.75 to 1.0 provided that ANGI Group is permitted to incur such liens under certain permitted credit facilities indebtedness notwithstanding the ratio, all as defined in the indenture. At March 31, ~~2023,~~2024, there were no limitations pursuant thereto.

2017

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 5—4—ACCUMULATED OTHER COMPREHENSIVE ~~(LOSS) INCOME~~LOSS

The following ~~table presents~~tables present the components of accumulated other comprehensive ~~(loss) income. There were no items~~loss, net of income tax.


	Three Months Ended March 31, 2024
	Foreign Currency Translation Adjustment		Unrealized (Losses) Gains On Interest Rate Swaps		Unrealized Gains (Losses) On Available-For-Sale Marketable Debt Securities		Accumulated Other Comprehensive (Loss) Income
	(In thousands)
Balance at January 1	$	(10,266)	$	(696)	$	20	$	(10,942)
Other comprehensive (loss) income before reclassifications	(1,064)		5,040		(22)		3,954
Amounts reclassified to earnings	1,436		(1,343)		—		93
Net current period other comprehensive income (loss)	372		3,697		(22)		4,047
Accumulated other comprehensive loss allocated to noncontrolling interests during the period	2		—		—		2
Balance at March 31	$	(9,892)	$	3,001	$	(2)	$	(6,893)


	Three Months Ended March 31, 2023
		Foreign Currency Translation Adjustment		Unrealized Losses On Interest Rate Swaps		Unrealized Gains (Losses) On Available-For-Sale Marketable Debt Securities		Accumulated Other Comprehensive Loss
		(In thousands)
Balance at January 1		$	(13,186)	$	—	$	53	$	(13,133)
Other comprehensive income (loss)		803		(2,287)		(26)		(1,510)

Net current period other comprehensive income (loss)		803		(2,287)		(26)		(1,510)
Accumulated other comprehensive loss allocated to noncontrolling interests during the period		2		—		—		2
Balance at March 31		$	(12,381)	$	(2,287)	$	27	$	(14,641)

The amounts reclassified out of ~~accumulated other comprehensive (loss) income~~foreign currency translation adjustment into earnings for the three months ended March 31, ~~2023 and 2022.~~

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
Foreign Currency Translation Adjustment Unrealized Gains (Losses) On Available-For-Sale Marketable Debt Securities Unrealized Losses On Interest Rate Swaps Accumulated Other Comprehensive Loss Foreign Currency Translation Adjustment Accumulated Other Comprehensive Income (Loss)
(In thousands)
Balance at January 1 $ (13,186) $ 53 $ — $ (13,133) $ 4,397 $ 4,397
Other comprehensive income (loss) 803 (26) (2,287) (1,510) (3,634) (3,634)
Net current period other comprehensive income (loss) 803 (26) (2,287) (1,510) (3,634) (3,634)
Accumulated other comprehensive loss allocated to noncontrolling interests during the period 2 — — 2 2 2
Balance at March 31 $ (12,381) $ 27 $ (2,287) $ (14,641) $ 765 $ 765
2024 relate to the substantial liquidation of an international subsidiary.

At March 31, 2024 and 2023, there was $0.9 million of deferred income tax provision and $0.7 million of deferred income tax benefit, respectively, related to unrealized gains and losses on interest rate ~~swaps~~swaps. At March 31, 2024, there was no deferred income tax provision or benefit related to net unrealized gains and losses on available-for-sale marketable debt securities and less than $0.1 million of deferred income tax provision ~~related to net unrealized gains on available-for-sale marketable debt securities. At~~at March 31, ~~2022, there was no income tax benefit or provision on the accumulated other comprehensive income.~~2023.

NOTE 6—5—SEGMENT INFORMATION

~~The overall concept that the Company employs in determining its operating~~Our reportable segments ~~is to present the~~currently consist of Dotdash Meredith (Print and Digital), Angi Inc. (Ads and Leads, Services and International) and Search. Our CODM regularly reviews certain financial information ~~in a manner~~by operating segment to determine allocation of resources and assess its performance. Segment profitability is determined by and presented on an Adjusted EBITDA basis consistent with the ~~chief operating decision maker's~~CODM’s view of ~~the businesses. In addition, we consider how the~~profitability of its businesses, which excludes certain expenses that are ~~organized as to~~required in accordance with GAAP. While not considered a reportable segment, management and the focus of the businesses with regards to the types of services or products offered or the target market. Operating segments are combined for reporting purposes if they meet certain aggregation criteria, such as the Search segment, which principally relate to the similarity of their economic characteristics, or, in the case of the Emerging & Other ~~reportable segment,~~comprises various operating segments that do not meet the quantitative thresholds that require presentation as separate reportable segments.

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents revenue by reportable segment:


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
			2023		2022			2024	2023
			(In thousands)					(In thousands)
Revenue	Revenue						Revenue
Dotdash Meredith	Dotdash Meredith
Digital
Digital
Digital	Digital		$	184,797	$	216,165
Print	Print		207,016		289,978
Intersegment eliminations(a)	Intersegment eliminations(a)		(4,231)		(5,672)
Total Dotdash Meredith	Total Dotdash Meredith		387,582		500,471
Angi Inc.	Angi Inc.
Domestic:	Domestic:
Domestic:
Domestic:
Ads and Leads
Ads and Leads
Ads and Leads	Ads and Leads		293,506		294,746
Services	Services		32,059		76,450
Roofing			38,372		36,687
Domestic intersegment eliminations(b)			(1,462)		(1,677)
Total Domestic	Total Domestic		362,475		406,206
International	International		29,932		29,953
Total Angi Inc.	Total Angi Inc.		392,407		436,159
Search	Search		152,475		223,385
Emerging & Other	Emerging & Other		154,031		166,994
Intersegment eliminations			(2,224)		(1,664)
Intersegment eliminations(b)
Total	Total		$	1,084,271	$	1,325,345

_____________________

(a) Intersegment eliminations primarily relates to Digital performance marketing commissions earned for the placement of magazine subscriptions for Print.

(b) Intersegment eliminations primarily relates to advertising sold by Dotdash Meredith to other IAC owned businesses and Ads and Leads revenue earned from sales to Roofing within Emerging & Other, prior to its sale on November 1, 2023.

The following table presents the revenue of the Company's reportable segments disaggregated by type of service:


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
			2023		2022			2024	2023
			(In thousands)					(In thousands)
Dotdash Meredith	Dotdash Meredith
Digital:	Digital:
Digital:
Digital:
Advertising revenue
Advertising revenue
Advertising revenue	Advertising revenue		$	111,817	$	137,090
Performance marketing revenue	Performance marketing revenue		50,055		50,105
Licensing and other revenue	Licensing and other revenue		22,925		28,970
Total digital revenue			184,797		216,165
Total Digital revenue
Print:	Print:
Subscription revenue	Subscription revenue		85,637		130,584
Subscription revenue
Subscription revenue
Advertising revenue	Advertising revenue		47,850		72,687
Project and other revenue
Newsstand revenue	Newsstand revenue		32,246		31,239
Project and other revenue			28,109		33,025
Performance marketing revenue	Performance marketing revenue		13,174		22,443
Total print revenue			207,016		289,978
Intersegment eliminations(a)			(4,231)		(5,672)
Total Dotdash Meredith revenue			$	387,582	$	500,471
							(a) Intersegment eliminations primarily related to Digital performance marketing commissions earned for the placement of magazine subscriptions for Print.
Total Print revenue

2219

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
									2024	2023
		Three Months Ended March 31,						(In thousands)
			2023		2022
Intersegment eliminations(a)
Total Dotdash Meredith revenue
			(In thousands)
Angi Inc.	Angi Inc.
Angi Inc.
Angi Inc.
Domestic:
Domestic:
Domestic:	Domestic:
Ads and Leads:	Ads and Leads:
Ads and Leads:
Ads and Leads:
Consumer connection revenue
Consumer connection revenue
Consumer connection revenue	Consumer connection revenue		$	212,935	$	214,347
Advertising revenue	Advertising revenue		67,181		63,902
Membership subscription revenue	Membership subscription revenue		13,199		16,237
Other revenue	Other revenue		191		260
Total Ads and Leads revenue	Total Ads and Leads revenue		293,506		294,746
Services revenue	Services revenue		32,059		76,450
Roofing revenue			38,372		36,687
Domestic intersegment eliminations(b)			(1,462)		(1,677)
Total Domestic revenue	Total Domestic revenue		362,475		406,206
International:	International:
Consumer connection revenue
Consumer connection revenue
Consumer connection revenue	Consumer connection revenue		24,745		21,803
Service professional membership subscription revenue	Service professional membership subscription revenue		5,058		7,856
Advertising and other revenue	Advertising and other revenue		129		294
Total International revenue	Total International revenue		29,932		29,953
Total Angi Inc. revenue	Total Angi Inc. revenue		$	392,407	$	436,159
							(b) Intersegment eliminations related to Ads and Leads revenue earned from sales to Roofing.
Search
Search
Search	Search
Advertising revenue:	Advertising revenue:
Advertising revenue:
Advertising revenue:
Google advertising revenue
Google advertising revenue
Google advertising revenue	Google advertising revenue		$	140,734	$	149,652
Non-Google advertising revenue	Non-Google advertising revenue		10,973		71,989
Total advertising revenue	Total advertising revenue		151,707		221,641
Other revenue	Other revenue		768		1,744
Total Search revenue	Total Search revenue		$	152,475	$	223,385

Emerging & Other	Emerging & Other
Emerging & Other
Emerging & Other
Subscription revenue
Subscription revenue
Subscription revenue	Subscription revenue		$	86,400	$	94,547
Marketplace revenue	Marketplace revenue		58,419		66,117
Roofing revenue
Media production and distribution revenue	Media production and distribution revenue		3,615		546
Advertising revenue:	Advertising revenue:
Non-Google advertising revenue
Non-Google advertising revenue
Non-Google advertising revenue	Non-Google advertising revenue		2,899		3,723
Google advertising revenue	Google advertising revenue		263		608
Total advertising revenue	Total advertising revenue		3,162		4,331
Service and other revenue	Service and other revenue		2,435		1,453
Total Emerging & Other revenue	Total Emerging & Other revenue		$	154,031	$	166,994

2320

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below:


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
			2023		2022		2024	2023
			(In thousands)				(In thousands)
Revenue:	Revenue:
United States	United States		$	974,428	$	1,204,348
United States
United States
All other countries	All other countries		109,843		120,997
Total	Total		$	1,084,271	$	1,325,345

March 31,
2024

December 31,
2023

March 31,
2023

December 31,
2022

(In thousands)

Long-lived assets (excluding goodwill, intangible assets and ROU assets):

Long-lived assets (excluding goodwill and intangible assets):

United States

455,240

502,977

All other countries

6,631

7,637

Total

461,871

510,614

The following tables present operating (loss) income and Adjusted EBITDA by reportable segment:


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
								2024	2023
		Three Months Ended March 31,					(In thousands)
			2023		2022
			(In thousands)
Operating (loss) income:
Operating (loss) income
Dotdash Meredith	Dotdash Meredith
Dotdash Meredith
Dotdash Meredith
Digital
Digital
Digital	Digital		$	(17,887)	$	(1,868)
Print	Print		(5,756)		(38,335)
Other(c)(d)	Other(c)(d)		(87,591)		(16,042)
Total Dotdash Meredith(e)			(111,234)		(56,245)
Total Dotdash Meredith
Angi Inc.	Angi Inc.
Ads and Leads	Ads and Leads		13,480		15,486
Ads and Leads
Ads and Leads
Services	Services		(12,452)		(25,750)
Roofing			411		(6,150)
Other(c)	Other(c)		(14,939)		(13,022)
International	International		3,030		(4,521)
Total Angi Inc.	Total Angi Inc.		(10,470)		(33,957)
Search	Search		10,770		25,079
Emerging & Other	Emerging & Other		11,445		(5,044)
Corporate	Corporate		(36,107)		(38,647)
Total	Total		$	(135,596)	$	(108,814)

_____________________

(d) ~~Includes~~Dotdash Meredith Other operating loss for the three months ended March 31, 2023 includes impairment charges of $70.0 million related to unoccupied leased office space, of which $25.3 million is presented in "Depreciation" in the statement of operations and, therefore, is excluded from Adjusted EBITDA. Impairment charges related to unoccupied leased office space included in Adjusted EBITDA are $44.7 million for the three months ended March 31, ~~2023, of which $25.3 million is included in "Depreciation" in the statement of operations.~~2023. See "Note 3—2—Financial Instruments and Fair Value Measurements" for additional information.

2421

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

~~(e)~~ ~~Dotdash Meredith incurred restructuring charges of $22.4 million in the three months ended March 31, 2022. The three months ended March 31, 2022 also include transaction-related expenses of~~ ~~$4.0 million~~ ~~related to the acquisition of Meredith. See "Note 2~~—~~Dotdash Meredith Restructuring Charges and Transaction-Related Expenses" for additional information.~~


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
								2024	2023
		Three Months Ended March 31,					(In thousands)
			2023		2022
			(In thousands)
Adjusted EBITDA(f):
Dotdash Meredith(e)
Adjusted EBITDA(e):
Dotdash Meredith
Dotdash Meredith
Dotdash Meredith
Digital
Digital
Digital	Digital		$	24,403	$	34,800
Print	Print		$	11,334	$	(10,480)
Other(c)(g)			$	(58,854)	$	(15,786)
Other(c)(d)
Total Dotdash Meredith
Angi Inc.	Angi Inc.
Ads and Leads	Ads and Leads		$	39,851	$	34,325
Ads and Leads
Ads and Leads
Services	Services		$	(2,168)	$	(18,567)
Roofing			$	821	$	(5,026)
Other(c)	Other(c)		$	(12,354)	$	(10,450)
International	International		$	4,354	$	(3,451)
Total Angi Inc.
Search	Search		$	10,791	$	25,100
Emerging & Other	Emerging & Other		$	14,778	$	916
Corporate	Corporate		$	(23,833)	$	(23,694)
Total

_____________________

~~(f)~~(e) The Company's primary financial ~~measure~~ and GAAP segment measure is Adjusted EBITDA, which is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration ~~arrangements.~~arrangements, if applicable.

~~(g)~~Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

We consider operating (loss) income to be the financial measure calculated and presented in accordance with GAAP that is most directly comparable to our segment reporting performance measure, Adjusted EBITDA. The following tables reconcile operating (loss) income for the Company's reportable segments and net earnings attributable to IAC shareholders to Adjusted EBITDA:


	Three Months Ended March 31, 2024
	Operating (Loss) Income		Stock-based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(e)
	(In thousands)
Dotdash Meredith
Digital	$	(180)	$	2,200	$	4,857	$	30,082	$	36,959
Print	(5,121)		446		2,537		5,085		2,947
Other(c)	(15,528)		4,703		1,161		—		(9,664)
Total Dotdash Meredith	(20,829)		7,349		8,555		35,167		30,242
Angi Inc.
Ads and Leads	19,821		4,465		16,935		—		41,221
Services	(7,501)		1,381		6,130		—		10
Other(c)	(15,117)		3,196		—		—		(11,921)
International	5,513		355		784		—		6,652
Total Angi Inc.	2,716		9,397		23,849		—		35,962
Search	4,356		—		21		—		4,377
Emerging & Other	(8,010)		410		1,833		1,561		(4,206)
Corporate(f)	(37,411)		11,751		2,315		—		(23,345)
Total	(59,178)		$	28,907	$	36,573	$	36,728	$	43,030
Interest expense	(39,718)
Unrealized gain on investment in MGM Resorts International	163,751
Other income, net	34,805
Earnings before income taxes	99,660
Income tax provision	(54,688)
Net earnings	44,972
Net loss attributable to noncontrolling interests	59
Net earnings attributable to IAC shareholders	$	45,031

_____________________

(f) Includes ~~impairment charges~~stock-based compensation expense for stock-based awards granted to employees of ~~$44.7 million related to unoccupied leased office space for~~Corporate, Search and all Emerging & Other businesses other than Vivian Health in the three months ended March 31, 2024 and 2023. ~~See "Note 3—Financial Instruments and Fair Value Measurements" for additional information.~~The three months ended March 31, 2023 also excludes stock-based compensation granted to employees of Roofing within Emerging & Other, which was sold on November 1, 2023.

2523

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


	Three Months Ended March 31, 2023
	Operating (Loss) Income		Stock-based Compensation Expense		Depreciation		Amortization of Intangibles		Adjusted EBITDA(e)
	(In thousands)
Dotdash Meredith
Digital	$	(17,887)	$	1,695	$	5,244	$	35,351	$	24,403
Print	(5,756)		146		2,635		14,309		11,334
Other(c)(d)	(87,591)		3,250		25,487		—		(58,854)
Total Dotdash Meredith	(111,234)		5,091		33,366		49,660		(23,117)
Angi Inc.
Ads and Leads	13,480		5,491		18,218		2,662		39,851
Services	(12,452)		4,209		6,075		—		(2,168)
Other(c)	(14,939)		2,585		—		—		(12,354)
International	3,030		427		897		—		4,354
Total Angi Inc.	(10,881)		12,712		25,190		2,662		29,683
Search	10,770		—		21		—		10,791
Emerging & Other	11,856		517		942		2,284		15,599
Corporate(f)	(36,107)		10,621		1,653		—		(23,833)
Total	(135,596)		$	28,941	$	61,172	$	54,606	$	9,123
Interest expense	(38,172)
Unrealized gain on investment in MGM Resorts International	704,840
Other income, net	23,749
Earnings before income taxes	554,821
Income tax provision	(139,502)
Net earnings	415,319
Net loss attributable to noncontrolling interests	2,456
Net earnings attributable to IAC shareholders	$	417,775

NOTE 6—PENSION AND POSTRETIREMENT BENEFIT PLANS

The following table presents the components of net periodic benefit (credit) cost for the Dotdash Meredith pension and postretirement benefit plans:


	Three Months Ended March 31,
	2024						2023
	Pension				Postretirement		Pension				Postretirement
	Domestic		International		Domestic		Domestic		International		Domestic
	(In thousands)
Service cost	$	51	$	—	$	—	$	53	$	—	$	1
Interest cost	729		4,787		51		871		4,777		58
Expected return on plan assets	(564)		(4,787)		—		(501)		(4,771)		—

Actuarial (gain) loss recognition	(263)		—		—		240		—		—


Net periodic benefit (credit) cost	$	(47)	$	—	$	51	$	663	$	6	$	59

The Company froze and terminated the domestic funded pension plan as of December 31, 2022. The last of the required customary regulatory approvals of the termination of this plan was received in February 2024. The Company expects to complete the termination and settlement of this plan in the second half of 2024.

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following ~~tables reconcile operating (loss) income for the Company's reportable segments and net earnings (loss) attributable to IAC shareholders to Adjusted EBITDA:~~

Three Months Ended March 31, 2023
Operating
(Loss) Income Stock-based
Compensation
Expense Depreciation Amortization
of Intangibles
Adjusted
EBITDA(f)
(In thousands)
Dotdash Meredith
Digital $ (17,887) $ 1,695 $ 5,244 $ 35,351 $ 24,403
Print (5,756) $ 146 $ 2,635 $ 14,309 $ 11,334
Other(c)
(87,591) $ 3,250 $ 25,487 $ — $ (58,854)
Angi Inc.
Ads and Leads 13,480 $ 5,491 $ 18,218 $ 2,662 $ 39,851
Services (12,452) $ 4,209 $ 6,075 $ — $ (2,168)
Roofing 411 $ 165 $ 245 $ — $ 821
Other(c)
(14,939) $ 2,585 $ — $ — $ (12,354)
International 3,030 $ 427 $ 897 $ — $ 4,354
Search 10,770 $ — $ 21 $ — $ 10,791
Emerging & Other 11,445 $ 352 $ 697 $ 2,284 $ 14,778
Corporate(h)
(36,107) $ 10,621 $ 1,653 $ — $ (23,833)
Total (135,596)
Interest expense (38,172)
Unrealized gain on investment in MGM Resorts International 704,840
Other income, net 23,749
Earnings before income taxes 554,821
Income tax provision (139,502)
Net earnings 415,319
Net loss attributable to noncontrolling interests 2,456
Net earnings attributable to IAC shareholders $ 417,775

~~_____________________~~

~~(h) Includes stock-based compensation expense for stock-based awards granted to employees of Corporate, Search and all Emerging & Other businesses other than Vivian Health.~~

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Three Months Ended March 31, 2022

Operating
(Loss) Income(e)
Stock-based
Compensation
Expense Depreciation Amortization
of Intangibles Acquisition-related Contingent Consideration Fair Value Adjustments
Adjusted
EBITDA(e)(f)
(In thousands)
Dotdash Meredith
Digital $ (1,868) $ 4,196 $ 7,489 $ 25,595 $ (612) $ 34,800
Print (38,335) $ 64 $ 5,532 $ 22,259 $ — $ (10,480)
Other(c)
(16,042) $ 12 $ 244 $ — $ — $ (15,786)
Angi Inc.
Ads and Leads 15,486 $ 4,920 $ 11,257 $ 2,662 $ — $ 34,325
Services (25,750) $ 4,540 $ 1,668 $ 975 $ — $ (18,567)
Roofing (6,150) $ 830 $ 127 $ 167 $ — $ (5,026)
Other(c)
(13,022) $ 2,572 $ — $ — $ — $ (10,450)
International (4,521) $ 123 $ 947 $ — $ — $ (3,451)
Search 25,079 $ — $ 21 $ — $ — $ 25,100
Emerging & Other (5,044) $ 25 $ 403 $ 5,532 $ — $ 916
Corporate(h)
(38,647) $ 12,405 $ 2,548 $ — $ — $ (23,694)
Total (108,814)
Interest expense (21,912)
Unrealized loss on investment in MGM Resorts International (187,330)
Other income, net 6,699
Loss before income taxes (311,357)
Income tax benefit 70,464
Net loss (240,893)
Net loss attributable to noncontrolling interests 5,095
Net loss attributable to IAC shareholders $ (235,798)

~~NOTE 7—PENSION AND POSTRETIREMENT BENEFIT PLANS~~

~~The following table presents the components of net periodic benefit cost for the Dotdash Meredith pension and postretirement benefit plans:~~

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
Pension Postretirement Pension Postretirement
Domestic International Domestic Domestic International Domestic
(In thousands)
Service cost $ 53 $ — $ 1 $ 982 $ — $ 2
Interest cost 871 4,777 58 699 3,275 67
Expected return on plan assets (501) (4,771) — (1,578) (4,624) —
Actuarial loss recognition 240 — — 12,532 24,988 —
Net periodic benefit cost $ 663 $ 6 $ 59 $ 12,635 $ 23,639 $ 69

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Settlements during the three months ended March 31, 2023 triggered a remeasurement of the pension plans in the U.S. The actuarial loss of $0.2 million was the result of an adjustment in plan demographics, partially offset by gains on investment performance.

Settlements during the three months ended March 31, 2022 triggered a remeasurement of the funded pension plans in the United Kingdom ("U.K.") and U.S. The U.K. actuarial loss of $25.0 million primarily relates to the decline in the fair value of the U.K. pension plan's assets exceeding the decline in the plan liabilities, in each case due to higher interest rates. The U.S. actuarial loss of $12.5 million was primarily due to the decline in the fair value of plan assets.

~~The following~~ table summarizes the weighted average expected return on plan assets used to determine the net periodic benefit ~~costs~~(credit) cost at March 31, ~~2023,~~2024 following the ~~remeasurement,~~remeasurements, and December 31, ~~2022,~~2023, respectively:

March 31, 2023 December 31, 2022
Pension
Domestic Domestic
Expected return on plan assets 4.31 % 2.80 %


	March 31, 2024		December 31, 2023
	Pension
	Domestic			Domestic
Expected return on plan assets	5.21	%		4.48	%

The components of net periodic benefit ~~costs,~~(credit) cost, other than the service cost component, are included in "Other income, net" in the statement of operations.

NOTE 8—7—INCOME TAXES

At the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs.

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the Company's tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision or benefit in the quarter in which the change occurs.

For the three months ended March 31, 2024, the Company recorded an income tax provision of $54.7 million, which represents an effective income tax rate of 55%, which is higher than the statutory rate of 21% due primarily to the nondeductible portion of goodwill in the sale of Mosaic Group, nondeductible compensation expense, and state taxes, partially offset by research credits and the realization of a capital loss. For the three months ended March 31, 2023, the Company recorded an income tax provision of $139.5 million, which represents an effective income tax rate of 25%, which is higher than the statutory rate of 21% due primarily to state taxes and nondeductible compensation expense, partially offset by research credits. For the three months ended March 31, 2022, the Company recorded an income tax benefit of $70.5 million, which represents an effective income tax rate of 23%, which is higher than the statutory rate of 21% due primarily to state taxes and excess tax benefits generated by the exercise and vesting of stock-based awards, partially offset by nondeductible stock-based compensation expense.

~~The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. Accruals for interest and penalties are not material.~~

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

The Company's income taxes are routinely under audit by federal, state, local and foreign authorities as a result of previously filed separate company and consolidated tax returns for periods prior to the June 30, 2020 separation of IAC from Match Group (the "Match Separation") and for its tax returns filed on a standalone basis following the Match Separation. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Company is not currently under audit by the Internal Revenue Service ("IRS") has completed its audit of the federal income tax returns for the years ended December 31, 2013 through 2019, which include the operations of the Company. The settlement of these tax years has been submitted to the Joint Committee of Taxation for approval. The statute of limitations for the years 2013 through 2019 has been extended to December 31, 2023.Service. Returns filed in various other jurisdictions are open to examination for tax years beginning with ~~2014.~~2013. Income taxes payable include unrecognized tax benefits considered sufficient to pay assessments that may result from the examination of prior year tax returns. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, accruals for interest and penalties are not material.

Table of Contents

IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

At March 31, 2024 and December 31, 2023, unrecognized tax benefits, including interest and penalties, were ~~$17.4~~$20.8 million and ~~$16.6~~$19.6 million, respectively. Unrecognized tax benefits, including interest and penalties, at March 31, ~~2023~~2024 increased by ~~$0.8~~$1.2 million due primarily to research ~~credits, partially offset by settlements.~~credits. If unrecognized tax benefits at March 31, ~~2023~~2024 are subsequently recognized, ~~$16.2~~$19.7 million, net of related deferred tax assets and interest, would reduce income tax expense. The comparable amount at December 31, ~~2022~~2023 was ~~$15.4~~$18.6 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by ~~$0.6~~$0.4 million by March 31, ~~2024~~2025 due to expected settlements and statute expirations, all of which ~~$0.5 million~~ would reduce the income tax provision.

The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. At March 31, 2023, the Company has a U.S. gross deferred tax asset of $816.4 million that the Company expects to fully utilize on a more likely than not basis. Of this amount, $641.7 million will be utilized upon the future reversal of deferred tax liabilities and the remaining net deferred tax asset of $174.7 million will be utilized based on forecasts of future taxable income. The Company's most significant net deferred tax asset that could expire relates to U.S. federal net operating loss ("NOL") carryforwards of $40.4 million. The Company expects to generate sufficient future taxable income of at least $192.6 million prior to the expiration of these NOLs, the majority of which expire between 2033 and 2036, to fully realize this deferred tax asset.

NOTE 9—8—EARNINGS ~~(LOSS)~~ PER SHARE

The Company treats its common stock and Class B common stock as one class of stock for net earnings ~~(loss)~~ per share ("EPS") purposes as both classes of stock participate in earnings, dividends and other distributions on the same basis. The restricted stock award granted to our Chief Executive Officer ("CEO") on November 5, 2020 is a participating security and the Company calculates basic EPS using the two-class method since those restricted shares are unvested and have a non-forfeitable dividend right in the event the Company declares a cash dividend on common shares and participate in all other distributions of the Company in the same manner as all other IAC common shares. Diluted EPS is calculated, on the most dilutive basis, which excludes awards that would be anti-dilutive, including the restricted stock award granted to our CEO.

Undistributed earnings allocated to the participating security is subtracted from earnings in determining earnings attributable to holders of IAC common stock and Class B common stock for basic EPS. Basic EPS is computed by dividing net earnings ~~(loss)~~ attributable to holders of IAC common stock and Class B common stock by the weighted-average number of shares of common stock and Class B common stock outstanding during the period.

For the calculation of diluted EPS, net earnings ~~(loss)~~ attributable to holders of IAC common stock and Class B common stock is adjusted for the impact from our public subsidiary's dilutive securities, if applicable, and the reallocation of undistributed earnings allocated to the participating security by the weighted-average number of common stock and Class B common stock outstanding plus dilutive securities during the period.

~~Table of Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

The numerator and denominator of basic and diluted EPS computations for the Company’s common stock and Class B common stock are calculated as follows:

Three Months Ended March 31,

2023

2022

(In thousands, except per share data)

Three Months Ended March 31,

2024

2023

(In thousands, except per share data)

Basic EPS:

Numerator:

Net earnings (loss)

415,319

(240,893)

Numerator:

Net earnings

Net loss attributable to noncontrolling interests

2,456

5,095

Net earnings attributed to unvested participating security

(14,156)

—

Net earnings (loss) attributable to IAC common stock and Class B common stock shareholders

403,619

(235,798)

Net earnings attributable to IAC common stock and Class B common stock shareholders

Denominator:

Weighted average basic IAC common stock and Class B common stock shares outstanding(a)

85,534

86,784

Earnings (loss) per share attributable to IAC common stock and Class B common stock shareholders:

Earnings (loss) per share

4.72

(2.72)

Earnings per share:

Earnings per share attributable to IAC common stock and Class B common stock shareholders

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Three Months Ended March 31,

2023

2022

(In thousands, except per share data)

Three Months Ended March 31,

2024

2023

(In thousands, except per share data)

Diluted EPS:

Numerator:

Net earnings (loss)

415,319

(240,893)

Numerator:

Net earnings

Net loss attributable to noncontrolling interests

2,456

5,095

Net earnings attributed to unvested participating security

(13,720)

—

Impact from public subsidiaries' dilutive securities(b)

—

Net earnings (loss) attributable to IAC common stock and Class B common stock shareholders

404,055

(235,798)

Net earnings attributable to IAC common stock and Class B common stock shareholders

Denominator:

Weighted average basic IAC common stock and Class B common stock shares outstanding(a)

85,534

86,784

Dilutive securities(b)(c)(d)

2,819

—

Denominator for earnings per share—weighted average shares(b)(c)(d)

88,353

86,784

Weighted average basic IAC common stock and Class B common stock shares outstanding(a)

Dilutive securities(b)(c)

Denominator for earnings per share—weighted average shares(b)(c)

Earnings (loss) per share attributable to IAC common stock and Class B common stock shareholders:

Earnings (loss) per share

4.57

(2.72)

Earnings per share:

Earnings per share attributable to IAC common stock and Class B common stock shareholders

_____________________

(a) On November 5, 2020, IAC's CEO was granted a stock-based award in the form of 3.0 million shares of restricted common stock. The number of shares that ultimately vests is subject to the satisfaction of growth targets in IAC's stock price over the 10-year service condition of the award. These restricted shares have a non-forfeitable dividend right in the event the Company declares a cash dividend on its common shares and participate in all other distributions of the Company in the same manner as all other IAC common shares. Accordingly, the two-class method of calculating EPS is used. While the restricted shares are presented as outstanding shares in the balance sheet, these shares are excluded from the weighted average shares outstanding in calculating basic EPS and the allocable portion of net earnings are also excluded. Fully diluted EPS reflects the impact on earnings and fully diluted shares in the manner that is most dilutive.

(b) IAC has the option to settle certain Angi Inc. stock-based awards in its shares. The impact on net earnings relates to the settlement of Angi Inc.'s dilutive securities in IAC common shares. For the three months ended March 31, 2024 and 2023, these Angi Inc. equity awards were anti-dilutive. For the three months ended March 31, 2022, the Company had a loss from operations and as a result these awards were excluded from computing dilutive earnings per share because the impact would have been anti-dilutive.

(c) If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and subsidiary denominated equity and vesting of restricted common stock, and restricted stock units ("RSUs"). For the three months ended March 31, 2024 and 2023, 3.4 million and 3.3 million, respectively, of potentially dilutive securities were excluded from ~~computing~~the calculation of diluted EPS because ~~the impact~~their inclusion would have been anti-dilutive.

~~(d)~~ For the three months ended March 31, 2022, the Company had a loss from operations and, as a result, approximately 7.8 million potentially dilutive securities were excluded from computing diluted EPS because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute the EPS amounts for the three months ended March 31, 2022.

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~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

NOTE ~~10—~~9—FINANCIAL STATEMENT DETAILS

Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet to the total amounts shown in the statement of cash flows:


		March 31, 2023		December 31, 2022		March 31, 2022		December 31, 2021
		(In thousands)
	March 31, 2024									March 31, 2024	December 31, 2023	March 31, 2023	December 31, 2022
	(In thousands)											(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	1,398,836	$	1,417,390	$	1,852,598	$	2,118,730
Restricted cash included in other current assets	Restricted cash included in other current assets	1,081		1,165		21,183		1,941
Restricted cash included in other non-current assets	Restricted cash included in other non-current assets	7,640		7,514		885		1,193

Total cash and cash equivalents and restricted cash as shown on the statement of cash flows	Total cash and cash equivalents and restricted cash as shown on the statement of cash flows	$	1,407,557	$	1,426,069	$	1,874,666	$	2,121,864
Total cash and cash equivalents and restricted cash as shown on the statement of cash flows
Total cash and cash equivalents and restricted cash as shown on the statement of cash flows

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Restricted cash included in "Other current assets" in the balance sheet at March 31, 2024 and December 31, 2023 and primarily consists of cash held in escrow related to the funded pension plan in the United Kingdom. and cash held related to insurance programs at Care.com. Restricted cash included in "Other non-current assets" in the balance sheet at March 31, 2024 and December 31, 2023 consists of deposits related to leases.

Restricted cash included in "Other current assets" in the balance sheet at March 31, 2023 and December 31, 2022 primarily consists of cash held related to insurance programs at Care.com.

Restricted cash included in "Other current assets" in the balance sheet at March 31, 2022 primarily consists of cash received from Care.com’s payment solutions customers for payroll and related taxes, which were remitted subsequent to period end, and cash held in escrow related to the funded pension plan in the U.K.

~~Restricted cash included in "Other current assets" in the balance sheet at December 31, 2021 primarily consists of cash held in escrow related to the funded pension plan in the U.K.~~

Restricted cash included in "Other non-current assets" in the balance sheet at March 31, 2023 and December 31, 2022 primarily consists of cash held in escrow related to the funded pension plan in the U.K as well as a check endorsement guarantee at ~~the~~ Roofing ~~segment~~within Emerging & Other and deposits related to leases.

~~Restricted cash included in "Other non-current assets" at March 31, 2022 and December 31, 2021 include deposits related to leases and a check endorsement guarantee at the Roofing segment.~~

Credit Losses

The following table presents the changes in the allowance for credit losses for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively:


		2023		2022
		(In thousands)
		2024
		2024
		2024				2023
	(In thousands)						(In thousands)
Balance at January 1	Balance at January 1	$	50,971	$	36,556
Current period provision for credit losses	Current period provision for credit losses	24,826		23,287
Write-offs charged against the allowance	Write-offs charged against the allowance	(29,308)		(20,518)
Recoveries collected	Recoveries collected	1,489		—
Other	Other	(466)		216
Balance at March 31	Balance at March 31	$	47,512	$	39,541

Accumulated Amortization and Depreciation

The following table provides the accumulated depreciation and amortization within the balance sheet:


Asset Category	March 31, 2024		December 31, 2023
	(In thousands)
Capitalized software, buildings, equipment and leasehold improvements	$	385,568	$	374,256
Intangible assets	$	648,477	$	636,645

Other income, net


	Three Months Ended March 31,
		2024		2023
		(In thousands)
Net realized gain (loss) on sales of businesses, investments and upward (downward) adjustments to the carrying value of equity securities without readily determinable fair values(a)		$	25,941	$	(1,301)
Interest income		21,597		16,930

Unrealized (decrease) increase in the estimated fair value of a warrant		(10,232)		5,940
Foreign exchange (losses) gains, net		(1,741)		509

Unrealized loss related to marketable equity securities		—		(1,150)

Other		(760)		2,821
Other income, net		$	34,805	$	23,749

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

~~Accumulated Amortization and Depreciation~~

~~The following table provides the accumulated amortization and depreciation within the balance sheet:~~

Asset Category March 31, 2023 December 31, 2022
(In thousands)
Right-of-use assets included in other non-current assets $ 216,264 $ 157,650
Capitalized software, equipment, buildings and leasehold improvements $ 295,702 $ 274,473
Intangible assets $ 636,829 $ 582,063

~~Other income, net~~

Three Months Ended March 31,
2023 2022
(In thousands)
Interest income $ 16,930 $ 698
Unrealized increase in the estimated fair value of a warrant 5,940 7,985
Unrealized (loss) gain related to marketable equity securities (1,150) 34,352
Net periodic pension benefit costs, other than the service cost component (a)
(674) (35,359)
Other 2,703 (977)
Other income, net $ 23,749 $ 6,699

_____________________

(a) Includes a pre-tax ~~actuarial losses~~gain of ~~$0.2~~$29.2 million on the sale of assets of Mosaic Group (within Emerging & Other), which was accounted for as a sale of a business, in the three months ended March 31, ~~2023 related to the pension plans in the U.S. and $37.5 million for the three months ended March 31, 2022 related to the funded pension plans in the U.K. and U.S. See "Note 7—Pension and Postretirement Benefit Plans" for additional information.~~2024.

NOTE ~~11—~~10—CONTINGENCIES

In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes accruals for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where ~~the Company~~it believes an unfavorable outcome is not probable and, therefore, no accrual is established. Although management currently believes that resolving claims against the Company, including claims where an unfavorable outcome is reasonably possible, and for which the Company cannot estimate a loss or range of loss, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. The Company also evaluates other contingent matters, including uncertain income tax positions and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See "Note 8 —7—Income Taxes" for information related to uncertain income tax positions.

NOTE ~~12—~~11—RELATED PARTY TRANSACTIONS

IAC and Angi Inc.

Allocation of CEO Compensation and Certain Expenses

Joseph Levin, CEO of IAC and Chairman of Angi Inc., was appointed CEO of Angi ~~Inc~~Inc. on October 10, 2022. As a result, for the three months ended March 31, 2024 and 2023, IAC allocated $2.2 million and $2.3 million, respectively, in costs to Angi Inc. (including salary, benefits, stock-based compensation and costs related to the CEO's office). These costs were allocated from IAC based upon time spent on Angi Inc. by Mr. Levin. Management considers the allocation method to be reasonable. The allocated costs also include costs directly attributable to Angi Inc. that were initially paid for by IAC and billed by IAC to Angi Inc.

~~Table~~On April 8, 2024, Jeffrey W. Kip, President of ~~Contents~~

~~IAC INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Angi Inc., was appointed to succeed Joseph Levin as CEO of Angi Inc. Mr. Levin will remain Chairman of the Angi Inc. board of directors.

The Combination and Related Agreements

The Company and Angi Inc., in connection with the transaction resulting in the formation of Angi Inc. in 2017, which is referred to as the ~~"Combination",~~"Combination," entered into a contribution agreement; an investor rights agreement; a services agreement; a tax sharing agreement; and an employee matters ~~agreement.~~agreement, which collectively govern the relationship between IAC and Angi Inc.

IAC and Vimeo Inc. ("Vimeo")

~~Following~~In connection with the spin-off of Vimeo from IAC, the ~~relationship between IAC and Vimeo is governed by~~parties entered in several agreements to govern their relationship following the completion of the transaction, certain of which ~~include~~remain in effect and are as follows: a separation agreement, a tax matters agreement ~~a transition services agreement,~~and an employee matters ~~agreement~~agreement. Following the completion of the transaction, Vimeo and ~~office~~IAC entered into certain commercial agreements, including lease agreements. The Company and Vimeo are related parties because Mr. Diller is the beneficial owner of more than 10% of the voting interests in both IAC and Vimeo.

The Company ~~has an outstanding receivable of $0.8 million at both March 31, 2023 and December 31, 2022 due from~~charged Vimeo rent pursuant to ~~the separation agreement. This amount is included in "Other current assets" in the balance sheet.~~

~~For~~lease agreements of $0.9 million for both the three months ended March 31, ~~2023~~2024 and 2022, Vimeo was charged less than $0.1 million and $0.1 million, respectively, by IAC for services rendered pursuant to the transition services agreement. At March 31, 2023 and December 31, 2022, there were no outstanding receivables or payables pursuant to the transition services agreement.

~~For the three months ended March 31, 2023 and 2022, Vimeo was charged $0.9 million and $1.6 million, respectively, of rent pursuant to the lease agreements. At March 31, 2023, the~~2023. The Company ~~has~~had an outstanding receivable of ~~$0.1~~$0.3 million at both March 31, 2024 and December 31, 2023 due from Vimeo pursuant to the lease agreements. ~~This amount is~~These amounts are included in "Other non-current assets" in the balance sheet. ~~At December 31, 2022, there were no outstanding receivables due from Vimeo pursuant to the lease agreements.~~

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IAC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

IAC and Expedia Group

At March 31, ~~2023,~~2024, the Company and Expedia Group each had a 50% ownership interest in two aircraft that may be used by both companies. Members of the aircraft flight crews are employed by an entity in which the Company and Expedia Group each have a 50% ownership interest. The Company and Expedia Group have agreed to share costs relating to flight crew compensation and benefits pro-rata according to each company’s respective usage of the aircraft, for which they are separately billed by the entity described above. The Company and Expedia Group are related parties because Mr. Diller serves as Chairman and Senior Executive of both IAC and ~~Expedia.~~Expedia Group. For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, total payments made to this entity by the Company were not material.

In addition, Expedia Group may use certain aircraft owned 100% by a subsidiary of the Company on a cost basis. For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, the payments made by Expedia Group to the Company pursuant to this arrangement were not material.

~~NOTE 13—SUBSEQUENT EVENTS~~

~~In April 2023, the Company completed the acquisition of the formerly leased land under its New York City headquarters building for a purchase price of $80.0 million.~~

~~In April 2023, the Company purchased additional shares of Turo for $103.6 million. Following the purchase, IAC's aggregate percentage ownership in Turo is approximately 31%.~~

From April 1, 2023 through May 5, 2023, IAC repurchased 1.3 million shares of its common stock, on a trade date basis, at an average price of $50.47 per share, or $67.2 million in aggregate. At May 5, 2023, IAC has 3.8 million shares remaining in its share repurchase authorization.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

Management Overview

IAC today ~~consists~~is comprised of category leading businesses, including Dotdash Meredith, Angi Inc. and Care.com, as well as others ranging from early stage to established businesses.

As used herein, "IAC," the "Company," "we," "our" or "us" and similar terms refer to IAC Inc. and its subsidiaries (unless the context requires otherwise).

For a more detailed description of the Company's operating businesses, see "Description of IAC Businesses" included in "Item 1—Business" to the Company's Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Defined Terms and Operating Metrics:

Unless otherwise indicated or as the context otherwise requires, certain terms used in this quarterly report, which include the principal operating metrics we use in managing our business, are defined below:

~~Reportable Segments~~IAC Businesses (for additional information see "Note 6—5—Segment Information" to the financial statements included in "Item 1—Consolidated Financial Statements"):

•Dotdash Meredith - one of the largest digital and print publishers in America. ~~From mobile to magazines, nearly~~Nearly 200 million people trust us to help them make decisions, take action and find inspiration. Dotdash Meredith's over 40 iconic brands include ~~PEOPLE,~~People, Better Homes & Gardens, Verywell, FOOD & WINE, The Spruce, ~~Allrecipes,~~allrecipes, Byrdie, REAL SIMPLE, Investopedia and Southern Living. Dotdash Meredith has two operating segments: (i) Digital, which includes its digital, mobile and licensing operations; and (ii) Print, which includes its magazine subscription and newsstand operations;

•Angi Inc. - a publicly traded company that connects quality home service professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. InOn November 1, 2023, Angi Inc. completed the sale of 100% of its wholly-owned subsidiary, Total Home Roofing, LLC ("Roofing"), and has reflected it as a discontinued operation in its standalone financial statements. Roofing does not meet the threshold to be reflected as a discontinued operation at the IAC level. During the fourth quarter of ~~2022, the~~2023, IAC moved Roofing to Emerging & Other and prior period financial information has been recast to conform to this presentation. Following IAC's move of Roofing to Emerging & Other, Angi Inc. ~~segment presentation was changed to reflect its four~~has three operating ~~segments, which include:~~segments: (i) Ads and Leads, (ii) Services and (iii) ~~Roofing and (iv)~~ International ~~(consisting of businesses in~~(includes Europe and Canada). ~~Angi Inc.'s financial information for the first quarter of 2022 has been recast to conform to the current period presentation.~~ At March 31, ~~2023,~~2024, the Company’s economic interest and voting interest in Angi Inc. were ~~83.9%~~84.3% and ~~98.1%~~98.2%, respect~~ively.~~ively;

•Search - consists of Ask Media Group, a collection of websites providing general search services and information, and Desktop, which includes our direct-to-consumer downloadable desktop applications and our business-to-business partnership ~~operations.~~operations; and

•Emerging & Other - consists of:

•Care.com, a leading online destination for families to connect with caregivers for their children, aging parents, pets and homes and for caregivers to connect with families seeking care services. Care.com's brands include Care For Business, Care.com offerings to enterprises and HomePay;

•Mosaic Group, a leading developer and provider of global subscription mobile applications. The assets of Mosaic Group ~~has~~were sold on February 15, 2024, which was accounted for as a ~~portfolio~~sale of ~~some of the largest and most popular applications in the following verticals: Communications (RoboKiller~~, ~~TapeACall, Trapcall), Language (iTranslate~~, ~~Speak & Translate), Weather (Clime:~~ ~~NOAA Weather Radar Live,~~ ~~Weather Live), Business (PDF Hero~~, ~~Scan Hero) and Lifestyle~~(~~Blossom~~, ~~Pixomatic); and~~a business, for approximately $160 million;

•~~Vivian Health~~Roofing (previously included within the Angi Inc. segment), ~~The Daily Beast~~, ~~IAC Films, Newco~~ ~~(an IAC incubator)~~a provider of roof replacement and repair services, for periods prior to its sale on November ~~9, 2022,~~ 1, 2023; and

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•~~Bluecrew~~Vivian Health., IAC Filmsand The Daily Beast.

Dotdash Meredith

•Digital Revenue - includes advertising revenue, performance marketing revenue and licensing and other revenue.

~~Table of Contents~~

◦Advertising revenue - primarily includes revenue generated from display advertisements sold both directly through our sales team and via programmatic exchanges.

◦Performance marketing revenue - primarily includes revenue generated through affiliate commerce, affinity marketing channels and performance marketing commissions. Affiliate commerce commission revenue is generated when Dotdash Meredith refers users to commerce partner websites resulting in a purchase or transaction. Affinity marketing programs market and place magazine subscriptions for both Dotdash Meredith and third-party publisher titles. Performance marketing commissions are generated on a cost-per-click or cost-per-action basis.

◦Licensing and Other revenue - primarily includes revenue generated through brand and content licensing agreements. Brand licensing generates royalties from multiple long-term trademark licensing agreements with retailers, manufacturers, publishers and service providers. Content licensing royalties are earned from our relationship with Apple News + as well as other content distribution relationships.

•Print Revenue - primarily includes subscription, advertising, newsstand and performance marketing revenue.

•Total Sessions - represents unique visits to all sites that are part of Dotdash Meredith's network and sourced from Google Analytics.

•Core Sessions - represents a subset of Total Sessions that comprises unique visits to Dotdash Meredith's most significant (in terms of investment) owned and operated sites as follows:


People	InStyle	Simply Recipes
allrecipes	FOOD & WINE	Serious Eats
Investopedia	Martha Stewart	EatingWell
Better Homes & Gardens	Byrdie	Parents
Verywell Health	REAL SIMPLE	Verywell Mind
The Spruce	Southern Living	Health
TRAVEL + LEISURE

Angi Inc.

•Ads and Leads Revenue - primarily ~~reflects~~comprises domestic ~~ads and leads~~ revenue ~~including~~from consumer connection revenue for consumer matches, revenue from service professionals under contract for advertising and membership subscription revenue from service professionals and consumers.

•Services Revenue - primarily ~~reflects~~comprises domestic revenue from pre-priced offerings by which ~~consumers request~~the consumer requests services through an Angi Inc. platform and Angi Inc. connects them with a service professional to perform the service. From January 1, 2020 through December 31, 2022, Services recorded revenue on a gross basis. Effective January 1, 2023, Angi Inc. modified the Services terms and conditions so that the service professional, rather than Angi Inc., has the contractual relationship with the consumer to deliver the service and Angi Inc.'s performance obligation to the consumer is to connect them with the service professional. This change in contractual terms requires revenue be reported as the net amount of what is received from the consumer after deducting the amounts owed to the service professional providing the service effective for all arrangements entered into after December 31, 2022. This change in accounting treatment resulted in a decrease in revenue of $25.7 million for the three months ended March 31, 2023. There is no impact to operating loss or Adjusted EBITDA from this change in revenue recognition.

•~~RoofingRevenue~~- primarily reflects revenue from the roof replacement business offering by which the consumer purchases services directly from Angi Inc. and Angi Inc. engages a service professional to perform the service.

•International Revenue - primarily ~~reflects~~comprises revenue generated within the International segment (consisting of businesses in Europe and Canada), including consumer connection revenue for consumer matches and membership subscription revenue from service professionals and consumers.

•Service Requests - are (i) fully completed and submitted domestic service requests for connections with Ads and Leads service professionals, (ii) contacts to Ads and Leads service professionals generated via the service professional directory from unique users in unique categories (such that multiple contacts from the same user in the same category in the same day are counted as one Service Request) and (iii) requests to book Services jobs in the period.

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•Monetized Transactions - are (i) Service Requests that are matched to a paying Ads and Leads service professional in the period and (ii) completed and in-process Services jobs in the period; a single Service Request can result in multiple monetized transactions.

•Transacting Service Professionals ("Transacting SPs") - are the number of (i) Ads and Leads service professionals that paid for consumer matches or advertising and (ii) Services service professionals that performed a Services job, during the most recent quarter.

Operating Costs and Expenses:

•Cost of revenue (exclusive of depreciation) - consists primarily of traffic acquisition costs, which include (i) payments made to partners who direct traffic to our Ask Media Group websites and who distribute our business-to-business customized browser-based applications and (ii) the amortization of fees paid to Apple and Google related to the distribution of apps and the facilitation of in-app ~~purchases of product features.~~purchases. Traffic acquisition costs include payment of amounts based on revenue share and other arrangements. Cost of revenue also includes production, distribution and editorial costs at Dotdash Meredith, payments made to independent third-party service professionals who performed work contracted under Services arrangements that were entered into prior to January 1, 2023 and the change to net revenue reporting, compensation expense (including stock-based compensation expense) and other employee-related costs, content costs, roofing material and third-party contactor costs associated with Roofing arrangements ~~credit card processing fees, payments made to workers staffed by Bluecrew~~ for periods prior to its sale on November ~~9, 2022,~~1, 2023, hosting fees, credit card processing fees, and payments made to care providers for Care For ~~Business~~Business..

~~Table of Contents~~

•Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing expenditures, including fees paid to search engines, social media sites, other online marketing platforms, app platforms and partner-related payments to those who direct traffic to the brands within our Angi Inc. segment, offline marketing expenditures, which is primarily consists of costs related to television advertising, compensation expense (including stock-based compensation expense) and other employee-related costs for sales force and marketing personnel, subscription acquisition costs related to Dotdash Meredith, outsourced personnel and consulting costs and service guarantee expense at Angi Inc.

•General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and customer service functions, ~~(except for Care.com, which includes customer service costs within "Cost~~rent expense and facilities cost (including impairments of ~~revenue" in the statement of operations)~~right-of-use assets or "ROU assets"), fees for professional services, ~~(including transaction-related costs related to the acquisition of Meredith Holdings Corporation ("Meredith") and other acquisitions),~~ provision for credit losses ~~rent expense~~ and ~~facilities cost,~~ software license and maintenance ~~costs and acquisition-related contingent consideration fair value adjustments (described below).~~costs. The customer service function at Angi Inc. and Care.com includes personnel who provide support to its service professionals and caregivers, respectively, and consumers.

•Product development expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs and third-party contractor costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology and software license and maintenance costs.

•~~Acquisition-related contingent consideration fair value adjustments~~ - relate to the portion of the purchase price of certain acquisitions that is contingent upon the financial performance and/or operating metric targets of the acquired company. Changes in the estimated fair value of the contingent consideration arrangements are recognized during each reporting period in "General and administrative expense" in the statement of operations.

Long-term debt (for additional information see "Note 4—3—Long-term Debt" to the financial statements included in "Item 1—Consolidated Financial Statements"):

•Dotdash Meredith Term Loan A - due December 1, 2026. At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, the outstanding balance of the Dotdash Meredith Term Loan A was ~~$328.1~~$310.6 million and ~~$332.5~~$315 million, respectively, and bore interest at an adjusted term secured overnight financing rate ("Adjusted Term SOFR") plus 2.25%, or ~~6.94%~~7.68% and ~~5.91%~~7.69%, respectively. The Dotdash Meredith Term Loan A has quarterly principal payments.

•Dotdash Meredith Term Loan B - due December 1, 2028. At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, the outstanding balance of the Dotdash Meredith Term Loan B was ~~$1.23~~$1.22 billion and ~~$1.24~~$1.23 billion, respectively, and bore interest at Adjusted Term SOFR, subject to a minimum of 0.50%, plus 4.00%, or ~~8.77%~~9.43% and ~~8.22%~~9.44%, respectively. The Dotdash Meredith Term Loan B has quarterly principal payments.

•Dotdash Meredith Revolving Facility - Dotdash Meredith's ~~$150.0~~$150 million revolving credit facility expires on December 1, 2026. At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, there were no outstanding borrowings under the Dotdash Meredith Revolving Facility.

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•ANGI Group Senior Notes - on August 20, 2020, ANGI Group, LLC ("ANGI Group"), a direct wholly-owned subsidiary of Angi Inc., issued $500 million of its 3.875% Senior Notes due August 15, 2028, with interest payable February 15 and August 15 of each year.

Non-GAAP financial measure:

•Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") - is a non-GAAP financial measure. See "Principles of Financial Reporting" for the definition of Adjusted EBITDA and a reconciliation of net earnings ~~(loss)~~ attributable to IAC shareholders to operating loss to Adjusted EBITDA for the three months ended March 31, ~~2023~~2024 and ~~2022.~~

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~~Dotdash Meredith Restructuring and Other Charges~~

During the first quarter of 2023, Dotdash Meredith continued to incur costs related to the voluntary retirement program and recorded adjustments to previously accrued amounts related to the reduction in force. Dotdash Meredith incurred restructuring charges of $2.2 million and $22.4 million in the three months ended March 31, 2023 and 2022, respectively, including $2.2 million and $20.5 million, respectively, of severance and related costs. ~~Dotdash Meredith recorded reversals of previously accrued costs of $2.2 million, resulting in a net reversal of expense of less than $0.1 million, in the three months ended March 31,~~ 2023.

~~During the first quarter of 2023, Dotdash Meredith~~ ~~reassessed the sublease market assumptions and~~ recorded impairment charges related to certain unoccupied leased office space due to the continued decline in the commercial real estate market; a $44.7 million impairment of a right-of-use asset ("ROU asset") and a $25.3 million impairment of leasehold improvements, furniture and equipment, which are included in "General and administrative expense" and "Depreciation," respectively, in the statement of operations.

~~See "Note 2—Dotdash Meredith Restructuring Charges and Transaction-Related Expense~~s~~" and "Note 3—Financial Instruments and Fair Value Measurements" to the financial statements included in "Item 1—Consolidated Financial Statements" for additional information on Dotdash Meredith restructuring and impairment charges, respectively.~~

Certain Risks and Concentrations—Services Agreement with Google (the "Services Agreement")

The Company and Google are parties to an amended Services Agreement, which automatically renewed effective March 31, 2023 and now expires on March 31, 2025.

~~As a result of certain industry-wide policy~~ Google has made changes ~~combined with increased enforcement of~~to the policies under the Services Agreement and has also made industry-wide changes that have in ~~prior periods,~~ the ~~Company discontinued~~past and could in the ~~introduction~~future require modifications to, or prohibit and/or render obsolete certain of ~~new~~our products, ~~in 2021. Therefore, the current B2C revenue stream relates solely~~services and/or business practices, which have been and could be costly to ~~the then existing installed base of products. As a result, the~~address or negatively impact revenue and ~~profits~~have had and in the future could have an adverse effect on our financial condition and results of ~~the B2C business have declined significantly and the Company expects that trend to continue.~~operations.

See "Note 1—The Company and Summary of Significant Accounting Policies" to the financial statements included in "Item 1—Consolidated Financial Statements" for additional information on the Services Agreement with Google.

Table of Contents

Results of Operations for the Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

The following discussion should be read in conjunction with"Item 1—Consolidated Financial Statements."

Revenue


	Three Months Ended March 31,
		2024		2023		2024 Change
						$ Change		% Change
		(Dollars in thousands)
Dotdash Meredith
Digital		$	209,324	$	184,797	$	24,527	13%
Print		185,900		207,016		(21,116)		(10)%
Intersegment eliminations		(4,684)		(4,231)		(453)		(11)%
Total Dotdash Meredith		390,540		387,582		2,958		1%
Angi Inc.
Domestic
Ads and Leads		249,585		293,506		(43,921)		(15)%
Services		20,451		32,059		(11,608)		(36)%
Total Domestic		270,036		325,565		(55,529)		(17)%
International		35,354		29,932		5,422		18%
Total Angi Inc.		305,390		355,497		(50,107)		(14)%
Search		108,473		152,475		(44,002)		(29)%
Emerging & Other		126,541		192,403		(65,862)		(34)%
Intersegment eliminations		(1,264)		(3,686)		2,422		66%
Total		$	929,680	$	1,084,271	$	(154,591)	(14)%


	Three Months Ended March 31,
		2024	2023	2024 Change
					Change	% Change
Operating metrics:
Dotdash Meredith
Digital
Total Sessions (in millions)			2,750	2,842	(92)	(3)	%
Core Sessions (in millions)			2,273	2,102	171	8	%

Angi Inc.
Service Requests (in thousands)			4,126	6,004	(1,878)	(31)	%
Monetized Transactions (in thousands)			5,511	6,451	(940)	(15)	%
Transacting SPs (in thousands)			192	206	(14)	(7)	%

Table of Contents

~~Results of Operations for the three months ended March 31, 2023 compared to the three months ended March 31, 2022~~

~~Revenue~~

Three Months Ended March 31,
2023 $ Change % Change 2022
(Dollars in thousands)
Dotdash Meredith
Digital $ 184,797 $ (31,368) (15)% $ 216,165
Print 207,016 (82,962) (29)% 289,978
Intersegment eliminations (4,231) 1,441 25% (5,672)
Total Dotdash Meredith 387,582 (112,889) (23)% 500,471
Angi Inc.
Domestic
Ads and Leads 293,506 (1,240) 0% 294,746
Services 32,059 (44,391) (58)% 76,450
Roofing 38,372 1,685 5% 36,687
Domestic intersegment eliminations (1,462) 215 13% (1,677)
Total Domestic 362,475 (43,731) (11)% 406,206
International 29,932 (21) 0% 29,953
Total Angi Inc. 392,407 (43,752) (10)% 436,159
Search 152,475 (70,910) (32)% 223,385
Emerging & Other 154,031 (12,963) (8)% 166,994
Intersegment eliminations (2,224) (560) (34)% (1,664)
Total $ 1,084,271 $ (241,074) (18)% $ 1,325,345

•Dotdash Meredith revenue ~~decreased 23%~~increased 1% to ~~$387.6~~$390.5 million due ~~primarily~~ to ~~decreases~~an increase of ~~$83.0~~$24.5 million, or ~~29%~~13%, from ~~Print and $31.4~~Digital, partially offset by a decrease of $21.1 million, or ~~15%~~10%, from ~~Digital.~~ Print.

◦The decrease from Print was driven by restructuring activities in the first quarter of 2022, which included the discontinuation of several publications and the reduction in circulation of others. The decrease from Digital increase was due primarily to ~~decreases~~increases of ~~$25.3~~$21.1 million, or ~~18%~~19%, in Advertising Revenue, ~~and $6.0~~$2.0 million, or ~~21%~~9%, in Licensing and Other Revenue and $1.5 million, or 3% in Performance Marketing Revenue. The ~~decrease~~increase in Advertising Revenue was ~~due~~driven primarily ~~to traffic declines to its sites compared to COVID-19 supported traffic levels in the prior year period, declines~~by an increase in premium advertising sold through ~~its~~the Dotdash Meredith sales team in the Beauty, Technology and ~~lower rates across~~Health and Pharmaceutical categories and higher programmatic ~~channels~~revenue as a result of an 8% increase in Core Sessions. . The ~~decrease~~increase in Licensing and Other Revenue was due primarily to ~~lower~~improved performance from content syndication partners. The increase in Performance Marketing Revenue was due primarily to an increase in affiliate commerce commission revenue, ~~share~~partially offset by a decrease in Performance Marketing revenue in the Finance category.

◦The Print decrease was due primarily to decreases of $7.6 million, or 9%, in subscription revenue, $6.0 million, or 18%, in newsstand revenue and $5.4 million, or 11%, in advertising revenue. The decreases in subscription revenue, newsstand revenue and advertising revenue are all due, in part, to a reduction in the number of issues sold in the current year compared to the prior year and the ongoing migration from ~~syndication partner sites and lower licensing fees from retail partners.~~Print to Digital.

•Angi Inc. revenue decreased ~~10%~~14% to ~~$392.4~~$305.4 million driven by decreases of $43.9 million, or 15%, from Ads and Leads and $11.6 million, or 36%, from Services, partially offset by an increase of $5.4 million, or 18% from International.

◦The Ads and Leads decrease was due primarily to a decrease of ~~$44.4~~$52.4 million, or ~~58%~~25%, ~~from Services resulting from the change to net~~in consumer connection revenue, ~~reporting as described above under "Services Revenue" and a~~partially offset by an increase of $10.0 million, or 15%, in advertising revenue. The decrease ~~of $18.0 million~~in consumer connection revenue was due primarily to declines in Monetized Transactions as a result of fewer Transacting SPs resulting from a reduction in unprofitable sales and changes to demand channels to increase lead quality to enhance the ~~shift away~~user experience for both homeowners and service professionals and to improve profitability through greater matching efficiency and bidding optimization as evidenced by a higher ratio of Monetized Transactions per Service Request. The increase in advertising revenue was primarily driven by continued growth in sales.

◦The Services decrease was due primarily to lower Service Requests as a result of certain efforts described in Ads and Leads above. In addition, the decrease in revenue reflects the residual impact from ~~complex~~contracts entered into prior to January 1, 2023 and ~~less profitable~~recognized as gross revenue in the first quarter of 2023. Effective January 1, 2023, Angi Inc. modified the Services ~~offerings.~~terms and conditions resulting in net revenue reporting.

◦The International increase was driven by a larger service professional network and higher revenue per service professional.

•Search revenue decreased ~~32%~~29% to ~~$152.5~~$108.5 million due to ~~decreases~~a decrease of ~~$61.4~~$42.4 million, or 32%, from Ask Media Group ~~and $9.5 million, or 32%,~~resulting from ~~Desktop. The decrease from Ask Media Group was due to~~ a reduction in marketing from affiliate partners driving fewer visitors to ad supported search and content websites. ~~The decrease from Desktop was due primarily to the Google policy changes and the subsequent cessation of new products described above under "Services Agreement with Google (the "Services Agreement")."~~

•Emerging & Other revenue decreased 8%34% to ~~$154.0~~$126.5 million due primarily to the inclusion of ~~Bluecrew~~$38.4 million in revenue from Roofing in the prior year period, which was sold on November ~~9, 2022,~~1, 2023, and a decrease of $22.6 million in revenue at($17.9 million in 2024 compared to $40.5 million in 2023) from Mosaic Group ~~partially offset by growth~~due to the sale of ~~5% and 51% at Care.com and Vivian Health, respectively, and increased revenue at IAC Films.~~its assets on February 15, 2024.

~~Table of Contents~~

Cost of revenue (exclusive of depreciation shown separately below)


		Three Months Ended March 31,
			2023		$ Change			% Change	2022
			(Dollars in thousands)									Three Months Ended March 31,
													2024			2023			2024 Change
							$ Change																$ Change	% Change
													(Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below)	Cost of revenue (exclusive of depreciation shown separately below)		$	342,084	$	(191,520)		(36)%	$	533,604	Cost of revenue (exclusive of depreciation shown separately below)		$	271,964	$	$	342,929	$	$	(70,965)	(21)%	(21)%
As a percentage of revenue	As a percentage of revenue		32%						40%

Table of Contents

Cost of revenue in ~~2023~~2024 decreased from ~~2022~~2023 due to decreases of ~~$60.3~~$32.1 million from Emerging & Other, $23.1 million from Search, ~~$59.8~~$11.3 million from Dotdash Meredith ~~$57.0~~and $4.4 million from Angi Inc. ~~and $14.5~~

•The Emerging & Other decrease was due primarily to the inclusion in the prior year period of $25.1 million in expense from Roofing, which was sold on November 1, 2023, a decrease in expense of $3.1 million from ~~Emerging & Other.~~Mosaic Group due to the sale of its assets on February 15, 2024, and a decrease in compensation expense of $2.9 million at Care.com due to a reduction in headcount.

•The Search decrease was due primarily to a decrease in traffic acquisition costs of ~~$58.4~~$23.8 million at Ask Media Group due primarily to a decrease in the proportion of revenue earned from affiliate partners who direct traffic to our websites.

•The Dotdash Meredith decrease was due primarily to ~~decreases~~a decrease of ~~$43.0~~$10.1 million from Print ~~and $16.9 million from Digital. The decrease from Print was~~ due primarily to a decrease of ~~$27.7~~$11.9 million in production and distribution costs (postage, printing, paper and content) ~~due to the discontinuation of several publications in the first quarter of 2022 and the~~resulting from a reduction in circulation of ~~others. Print was further impacted by a decrease of $11.9 million~~certain publications and decreases in ~~compensation expense resulting from a voluntary retirement program in the first quarter of 2022~~paper costs and ~~the reduction in force described above under~~ "Dotdash Meredith Restructuring and Other Charges." The decrease from Digital was due primarily to a decrease of $7.2 million in traffic acquisition costs driven by lower revenue and a decrease of $5.9 million in compensation expense due to the reduction in force.freight surcharges.

•The Angi Inc. decrease was due primarily to a decrease of ~~$53.5~~$5.9 million from Services due primarily to a ~~$47.7~~$5.3 million decrease in payments to third-party professional service providers primarily reflecting the residual impact from contracts entered into prior to January 1, 2023.

Selling and marketing expense


	Three Months Ended March 31,
		2024		2023		2024 Change
						$ Change		% Change
		(Dollars in thousands)
Selling and marketing expense		$	343,925	$	403,297	$	(59,372)	(15)%
As a percentage of revenue		37%		37%

Selling and marketing expense in 2024 decreased from 2023 due to decreases of $42.6 million from Angi Inc., $14.5 million from Search and $13.5 million from Emerging & Other, partially offset by an increase of $9.1 million from Dotdash Meredith.

•The Angi Inc. decrease was due primarily to a decrease of ~~$25.7~~$40.3 million ~~resulting~~ from ~~the change~~Ads and Leads due primarily to ~~net revenue reporting effective January 1, 2023, described above. Additionally, payments~~decreases of $31.9 million and $7.5 million in advertising expense and compensation expense, respectively. The decrease in advertising expense was due primarily to ~~third-party professional service providers decreased as~~improved efficiency. The decrease in compensation expense was due primarily to a ~~result~~reduction in headcount.

•The Search decrease was due primarily to a decrease of ~~the shift away from complex and less profitable Services offerings.~~$13.4 million in online marketing spend at Ask Media Group.

•The Emerging & Other decrease was due primarily ~~due~~ to the inclusion in the prior year period of ~~$13.4~~$6.8 million in expense from ~~Bluecrew,~~Roofing, which was sold on November ~~9, 2022.~~

~~Selling~~1, 2023, and ~~marketing~~a decrease in expense

Three Months Ended March 31,
2023 $ Change % Change 2022
(Dollars in thousands)
Selling and marketing expense $ 404,141 $ (84,322) (17)% $ 488,463
As a percentage of revenue 37% 37%

~~Selling and marketing~~ of $6.4 million from Mosaic Group. The decrease from Mosaic Group was due primarily to a decrease in advertising expense of $8.2 million, partially offset by an increase of $2.1 million in ~~2023~~ ~~decreased from 2022~~severance expense including related payroll taxes, both due to ~~decreases~~ the sale of ~~$54.2 million from Dotdash Meredith, $20.9 million from Angi Inc. and $11.5 million from Emerging & Other.~~its assets on February 15, 2024.

•The Dotdash Meredith increase was due primarily to an increase of $11.7 million from Digital, partially offset by a decrease of $2.2 million from Print.

◦The Digital increase was due primarily to increases in online marketing spend and compensation expense of $6.8 million and $3.3 million, respectively. The increase in compensation expense was due primarily to an increase in headcount.

Table of Contents

◦The Print decrease was due primarily to ~~decreases~~a decrease of ~~$37.5~~$4.0 million in subscription acquisition costs, ~~and $12.4~~partially offset by an increase of $1.0 million in compensation ~~expense from Print.~~expense. The decrease in subscription acquisition costs was driven by lower commission payments made to third-party agents tothat sell magazine subscriptions resulting from the ~~discontinuation of several publications in the first quarter of 2022 and the reduction in circulation of others. The decrease in compensation expense was due~~shift from print to ~~a voluntary retirement program in the first quarter of 2022 and the reduction in force described above under~~ ~~"Dotdash Meredith Restructuring and Other Charges."~~

•~~The Angi Inc. decrease was due primarily to decreases of~~ ~~$8.2 million~~ ~~from International,~~ ~~$6.1 million~~ ~~from Services and~~ ~~$4.4 million~~ ~~from Ads and Leads.~~

◦The International decrease was due primarily to a decrease of $8.9 million in advertising expense due primarily to decreases of $4.8 million and $4.4 million in television spend and online marketing spend, respectively.

~~Table of Contents~~

◦~~The Services decrease was due primarily to decreases of $4.3 million in professional fees, $3.4 million in compensation expense and $1.1 million in advertising expense,~~ ~~partially offset by an increase of $3.5 million in service guarantee expense~~. The decrease in professional fees was primarily due to decreases in consulting fees and outsourced personnel costs of $3.6 million due to lower phone-based sales wages primarily resulting from increased reliance on more profitable digital conversion channels and $1.3 million due to streamlined fulfillment operations driven, in part, by fewer complex services, respectively. The decrease in compensation expense was due primarily to lower headcount. The decrease in advertising expense was primarily due to a decrease in service professional marketing spend. The increase in service guarantee expense is due to the aforementioned change in contractual terms and conditions such that this expense is no longer a component of cost of revenue, which is where the expense was recorded prior to January 1, 2023.

◦The Ads and Leads decrease was due primarily to decreases of $10.7 million in advertising expense and $1.7 million in consulting fees, partially offset by an increase of $7.6 million in compensation expense. The decrease in advertising expense was due primarily to a decrease of $11.4 million in online marketing spend. The decrease in consulting fees was due primarily to a decrease in marketing and branding consultancy fees.subscriptions. The increase in compensation expense was due primarily to ~~increased sales commissions driven by sales growth and the immediate expensing of commissions for certain transactions beginning October 1, 2022, rather than recording commissions as~~ an ~~asset to be amortized over the duration of the related customer relationship period due to the average customer relationship being assessed as less than one year.~~

•~~The Emerging & Other decrease was due primarily to decreases of $6.7 million~~increase in ~~online marketing spend at Mosaic Group and $4.2 million in expense at Bluecrew, which was sold on November 9, 2022.~~severance expense.

General and administrative expense


		Three Months Ended March 31,
			2023		$ Change		% Change	2022
			(Dollars in thousands)								Three Months Ended March 31,
												2024			2023			2024 Change
						$ Change																$ Change	% Change
												(Dollars in thousands)
General and administrative expense	General and administrative expense		$	269,526	$	29,055	12%	$	240,471	General and administrative expense		$	212,669	$	$	273,076	$	$	(60,407)	(22)%	(22)%
As a percentage of revenue	As a percentage of revenue		25%					18%

General and administrative expense in 2024 decreased from 2023 ~~increased from 2022~~ due primarily to ~~increases~~decreases of ~~$31.7~~$48.2 million from Dotdash Meredith and ~~$5.6 million from Emerging & Other, partially offset by a decrease of~~ $~~7.1~~11.1 million from Angi Inc.

•The Dotdash Meredith ~~increase~~decrease was due primarily to the inclusion in the first quarter of 2023 of an impairment charge at Other (unallocated corporate costs) of $44.7 million of an ROU asset related to unoccupied lease space ~~recognized~~and the inclusion in the first quarter of ~~2023, partially offset by~~2024 of a ~~decrease~~$2.3 million gain recognized on the sale of an aircraft. See "~~$4.1 million~~Note 2—Financial Instruments and Fair Value Measurements in ~~restructuring costs ($0.2 million in 2023 compared to $4.3 million 2022)~~ ~~related to activities~~ ~~described above under "Dotdash Meredith Restructuring and Other Charges" and the inclusion in 2022 of~~ ~~$4.0 million in transaction-related costs related~~" to the ~~acquisition of Meredith.~~

•financial statements included in "~~The Emerging & Other increase was due primarily to an increase in expense of $3.3 million at IAC Films related to certain participation rights,~~Item 1—Consolidated Financial Statements" for additional information about the inclusion in the prior year period of a $3.2 million gain at Care.com related to the termination of a lease and an increase of $1.6 million in compensation expense at Vivian Health, partially offset by a decrease in expense of $2.0 million at Bluecrew, which was sold on November 9, 2022.impairment charge.

•The Angi Inc. decrease was due primarily to ~~a decrease~~decreases of ~~$6.7~~$7.4 million from Ads and Leads and $4.3 million from Services.

◦The Ads and Leads decrease was due primarily to decreases ~~in compensation expense~~ of ~~$7.3~~$7.7 million ~~and recruitment fees of $1.4 million, partially offset by an increase~~ in the provision for credit losses and $3.0 million in legal-related expenses, partially offset by an impairment charge recognized in the first quarter of ~~$3.1~~2024 of $2.0 million of an ROU asset related to Angi Inc. reducing its real estate footprint. The decrease in the provision for credit losses was due primarily to lower revenue and improved collection rates.

◦The Services decrease was due primarily to a decrease of $3.7 million in compensation expense is due primarily to a $2.9 million decrease in stock-based compensation as a result of a reduction in headcount.

~~Table of Contents~~

Product development expense


		Three Months Ended March 31,
			2023		$ Change			% Change	2022
			(Dollars in thousands)									Three Months Ended March 31,
													2024			2023			2024 Change
							$ Change																$ Change	% Change
													(Dollars in thousands)
Product development expense	Product development expense		$	88,338	$	4,143		5%	$	84,195	Product development expense		$	86,999	$	$	84,787	$	$	2,212	3%	3%
As a percentage of revenue	As a percentage of revenue		8%						6%

Product development expense in ~~2023~~2024 increased from ~~2022 due to increases of $7.5 million from Angi Inc. and $2.6 million from Dotdash Meredith, partially offset by $6.1 million from Emerging & Other.~~

•~~The Angi Inc. increase was~~2023 due primarily to an increase of ~~$6.2~~$2.2 million from ~~Ads and Leads due primarily to an increase in compensation expense of $6.8 million related primarily to increased spend on projects that did not meet capitalization requirements.~~Dotdash Meredith.

•The Dotdash Meredith increase was due primarily to an increase of ~~$2.9~~$2.8 million from Digital due primarily to an increase in compensation expense of $4.1 million related primarily to an increase in headcount and a decrease in compensation expense that qualified for capitalization.

•The Emerging & Other decrease was due primarily to decreases in outsourced personnel costs of $3.6 million and compensation expense of $1.7 million at Care.com, and a decrease in expense of $2.6 million at Bluecrew, which was sold on November 9, 2022, partially offset by an increase in compensation expense of $2.4 million at Vivian Health. The decreases in outsourced personnel costs and compensation expense at Care.com was due primarily to costs incurred in 2022 to enhance product offerings and develop new products, and lower headcount, respectively. The increase in compensation expense at ~~Vivian Health was~~Digital due ~~primarily~~ to an increase in headcount.

~~Depreciation~~

Three Months Ended March 31,
2023 $ Change % Change 2022
(Dollars in thousands)
Depreciation $ 61,172 $ 30,936 102% $ 30,236
As a percentage of revenue 6% 2%

Depreciation increased in 2023 from 2022 due primarily to increases of $20.1 million at Dotdash Meredith and $11.4 million at Angi Inc. The increase at Dotdash Meredith was due primarily to the impairment of leasehold improvements and furniture and equipment of $25.3 million related to unoccupied leased space, partially offset by a decrease of $4.5 million in depreciation as a result of the reclassification of certain acquired capitalized software from depreciable assets to intangible assets in connection with the completion of purchase accounting related to the acquisition of Meredith. ~~The increase at Angi Inc. was due primarily to capitalized software projects placed in service after the first quarter of 2022.~~

4238

Table of Contents

Depreciation


	Three Months Ended March 31,
		2024		2023		2024 Change
						$ Change		% Change
		(Dollars in thousands)
Depreciation		$	36,573	$	61,172	$	(24,599)	(40)%
As a percentage of revenue		4%		6%

Depreciation in 2024 decreased from 2023 due primarily to a decrease of $24.8 million at Dotdash Meredith due primarily to the inclusion of an impairment charge of $25.3 million recognized in the first quarter of 2023 related to leasehold improvements and furniture and equipment resulting from unoccupied leased space. See "Note 2—Financial Instruments and Fair Value Measurements" to the financial statements included in "Item 1—Consolidated Financial Statements" for additional information about the impairment charge.

Operating (loss) income


		Three Months Ended March 31,
			2023		$ Change		% Change	2022
			(Dollars in thousands)								Three Months Ended March 31,
														2024						2023								2024 Change
						$ Change																														$ Change	% Change
														(Dollars in thousands)
Dotdash Meredith	Dotdash Meredith
Digital
Digital
Digital	Digital		$	(17,887)	$	(16,019)	(857)%	$	(1,868)			$	(180)			$		$	(17,887)			$				$	17,707			99%			99%
Print	Print		(5,756)		32,579		85%	(38,335)		Print				(5,121)			(5,756)				(5,756)				635					635		11%			11%
Other	Other		(87,591)		(71,549)		(446)%	(16,042)		Other				(15,528)			(87,591)				(87,591)				72,063					72,063		82%			82%
Total Dotdash Meredith	Total Dotdash Meredith		(111,234)		(54,989)		(98)%	(56,245)		Total Dotdash Meredith				(20,829)			(111,234)				(111,234)				90,405					90,405		81%			81%
Angi Inc.	Angi Inc.
Domestic	Domestic
Domestic
Domestic
Ads and Leads
Ads and Leads
Ads and Leads	Ads and Leads		13,480		(2,006)		(13)%	15,486				19,821				13,480			13,480				6,341					6,341			47%			47%
Services	Services		(12,452)		13,298		52%	(25,750)		Services				(7,501)			(12,452)				(12,452)				4,951					4,951		40%			40%
Roofing			411		6,561		NM	(6,150)
Other	Other		(14,939)		(1,917)		(15)%	(13,022)		Other				(15,117)			(14,939)				(14,939)				(178)					(178)		(1)%			(1)%
Total Domestic	Total Domestic		(13,500)		15,936		54%	(29,436)		Total Domestic				(2,797)			(13,911)				(13,911)				11,114					11,114		80%			80%
International	International		3,030		7,551		NM	(4,521)		International				5,513			3,030				3,030				2,483					2,483		82%			82%
Total Angi Inc.	Total Angi Inc.		(10,470)		23,487		69%	(33,957)		Total Angi Inc.				2,716			(10,881)				(10,881)				13,597					13,597		NM			NM
Search	Search		10,770		(14,309)		(57)%	25,079		Search				4,356			10,770				10,770				(6,414)					(6,414)		(60)%			(60)%
Emerging & Other	Emerging & Other		11,445		16,489		NM	(5,044)		Emerging & Other				(8,010)			11,856				11,856				(19,866)					(19,866)		NM			NM
Corporate	Corporate		(36,107)		2,540		7%	(38,647)		Corporate				(37,411)			(36,107)				(36,107)				(1,304)					(1,304)		(4)%			(4)%
Total	Total		$	(135,596)	$	(26,782)	(25)%	$	(108,814)	Total				$	(59,178)		$			$	(135,596)			$				$	76,418		56%			56%

As a percentage of revenue	As a percentage of revenue		(13)%					(8)%
As a percentage of revenue
As a percentage of revenue

_____________________

NM = Not meaningful

Table of Contents

Operating loss ~~increased $26.8~~decreased $76.4 million, ~~to a loss of $135.6 million~~or 56%, due primarily to an increase of $30.9 million in depreciation and income of $0.6 million in 2022 related to an acquisition-related contingent consideration fair value adjustment, partially offset by decreases of $2.5 million in amortization of intangibles and $0.8 million in stock-based compensation expense and an increase in Adjusted EBITDA of ~~$1.4~~$33.9 million, described ~~below.~~below, and decreases of $24.6 million in depreciation and $17.9 million in amortization of intangibles. The ~~increase~~decrease in depreciation was due primarily to the impairment of leasehold improvements and furniture and equipment at Dotdash Meredith of $25.3 million related to unoccupied ~~leased~~lease space ~~and an increase~~recognized in ~~expense at Angi Inc. primarily related to capitalized software projects placed in service after~~ the first quarter of 2022, partially offset by a decrease in depreciation at Dotdash Meredith as a result of the reclassification of certain acquired capitalized software from depreciable assets to intangible assets in connection with the completion of purchase accounting related to the acquisition of Meredith. 2023. The decrease in the amortization of intangibles was due primarily to lower expense at Dotdash Meredith ~~Print~~ and ~~Care.com~~Angi Inc. due in part to certain intangible assets becoming fully amortized, partially offset by an increase ~~at Dotdash Meredith Digital~~in expense as a result of ~~the reclassification~~a change in classification of ~~certain acquired capitalized software from depreciable assets to intangible assets described above~~.

The aggregate carrying value of goodwill for which the most recent estimate of the excess of fair value over carrying value is less than 20% is $153.6 million of goodwill at Mosaic Group. There is one indefinite-lived intangible asset attwo Dotdash Meredith Digital ~~with a value of approximately $126.0 million for which the excess of fair value over carrying value is less than 20%~~trade name indefinite-lived intangible assets to definite-lived intangible assets, effective January 1, 2024.

At March 31, ~~2023,~~2024, there was ~~$319.1~~$268.5 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately ~~4.4~~3.8 years.

~~Table of Contents~~

Adjusted EBITDA


		Three Months Ended March 31,
			2023		$ Change				% Change	2022
		(Dollars in thousands)					Three Months Ended March 31,
																2024						2023								2024 Change
								$ Change																														$ Change	% Change
													(Dollars in thousands)
Dotdash Meredith	Dotdash Meredith
Digital
Digital
Digital	Digital		$	24,403	$	(10,397)			(30)%	$	34,800			$	36,959			$		$	24,403			$				$	12,556			51%			51%
Print	Print		11,334		21,814				NM	(10,480)		Print				2,947			11,334				11,334				(8,387)					(8,387)		(74)%			(74)%
Other	Other		(58,854)		(43,068)				(273)%	(15,786)		Other				(9,664)			(58,854)				(58,854)				49,190					49,190		84%			84%
Total Dotdash Meredith	Total Dotdash Meredith		(23,117)		(31,651)				NM	8,534		Total Dotdash Meredith				30,242			(23,117)				(23,117)				53,359					53,359		NM			NM
Angi Inc.	Angi Inc.
Domestic	Domestic
Domestic
Domestic
Ads and Leads
Ads and Leads
Ads and Leads	Ads and Leads		39,851		5,526				16%	34,325				41,221				39,851			39,851				1,370					1,370			3%			3%
Services	Services		(2,168)		16,399				88%	(18,567)		Services				10			(2,168)				(2,168)				2,178					2,178		NM			NM
Roofing			821		5,847				NM	(5,026)
Other	Other		(12,354)		(1,904)				(18)%	(10,450)		Other				(11,921)			(12,354)				(12,354)				433					433		4%			4%
Total Domestic	Total Domestic		26,150		25,868				9,230%	282		Total Domestic				29,310			25,329				25,329				3,981					3,981		16%			16%
International	International		4,354		7,805				NM	(3,451)		International				6,652			4,354				4,354				2,298					2,298		53%			53%
Total Angi Inc.	Total Angi Inc.		30,504		33,673				NM	(3,169)		Total Angi Inc.				35,962			29,683				29,683				6,279					6,279		21%			21%
Search	Search		10,791		(14,309)				(57)%	25,100		Search				4,377			10,791				10,791				(6,414)					(6,414)		(59)%			(59)%
Emerging & Other	Emerging & Other		14,778		13,862				1,513%	916		Emerging & Other				(4,206)			15,599				15,599				(19,805)					(19,805)		NM			NM
Corporate	Corporate		(23,833)		(139)				(1)%	(23,694)		Corporate				(23,345)			(23,833)				(23,833)				488					488		2%			2%
Total	Total		$	9,123	$	1,436			19%	$	7,687	Total				$	43,030		$			$	9,123			$				$	33,907		372%			372%

As a percentage of revenue	As a percentage of revenue		1%							1%
As a percentage of revenue
As a percentage of revenue

For a reconciliation of net earnings ~~(loss)~~ attributable to IAC shareholders to operating loss to Adjusted EBITDA, see "Principles of Financial Reporting." For a reconciliation of operating ~~loss~~(loss) income to Adjusted EBITDA for the Company's reportable segments, see "Note 6—5—Segment Information" to the financial statements included in "Item 1—Consolidated Financial Statements."

•Dotdash Meredith Adjusted EBITDA ~~decreased $31.7~~increased $53.4 million to $30.2 million from a loss of $23.1 million due to ~~an increase~~a decrease in Adjusted EBITDA losses of ~~$43.1~~$49.2 million from Other (unallocated corporate costs) and an increase in Adjusted EBITDA of $12.6 million from Digital, partially offset by a decrease in Adjusted EBITDA of ~~$10.4 million from Digital, partially offset by an increase in Adjusted EBITDA of $21.8~~$8.4 million from Print.

◦The Other (unallocated corporate costs) Adjusted EBITDA loss ~~increase~~decrease was due primarily to the inclusion in the first quarter of 2023 of an impairment charge of $44.7 million of an ROU asset related to unoccupied lease space ~~recognized~~and the inclusion in the first quarter of ~~2023.~~2024 of a $2.3 million gain recognized on the sale of an aircraft.

◦The Digital Adjusted EBITDA ~~decrease was due primarily to lower revenue and an increase in product development expense described above, partially offset by the inclusion in 2022 of $5.8 million~~ ~~of restructuring charges and transaction-related expenses.~~

◦~~The Print Adjusted EBITDA~~ increase was due primarily to ~~a decrease in~~higher revenue and continued operating ~~costs and expenses driven by the inclusion in 2022 of $16.4 million~~ ~~of restructuring charges and transaction-related expenses.~~

~~See "Note 2—Dotdash Meredith Restructuring Charges and Transaction-Related Expenses" to the financial statements included in "Item 1—Consolidated Financial Statements" for additional information on Dotdash Meredith restructuring charges.~~leverage.

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◦The Print Adjusted EBITDA decrease was due primarily to revenue declines, partially offset by lower operating expenses.

•Angi Inc. Adjusted EBITDA increased ~~$33.7~~$6.3 million to ~~$30.5 million from a loss of $3.2~~$36.0 million due to ~~decreases in Adjusted EBITDA losses of $16.4 million from Services, $5.8 million from Roofing and $7.8 million from International and an increase~~increases in Adjusted EBITDA of ~~$5.5~~$2.3 million from International, $2.2 million from Services and $1.4 million from Ads and ~~Leads, partially offset by increased~~Leads.

◦The International Adjusted EBITDA ~~losses of $1.9 million from Other (unallocated corporate costs).~~increase was due primarily to an increase in revenue.

◦The Services Adjusted EBITDA ~~loss decrease~~increase was due primarily to ~~pricing and fulfillment optimization efforts over the past year and~~ lower operating expenses due to a reduced overall cost base as a result of exiting complex ~~services~~ and less profitable ~~Services~~ offerings.

◦~~The Roofing Adjusted EBITDA loss decrease was due primarily to higher revenue and margin optimization efforts (both labor and material efficiencies).~~

◦~~The International Adjusted EBITDA loss decrease was due primarily to lower selling and marketing expense, described above.~~

◦The Ads and Leads Adjusted EBITDA increase was due primarily to lower selling and marketing expense due to improved marketing efficiency and lower general ~~and~~ administrative expense due to decreases in the provision for credit losses and legal-related expenses, partially offset by lower ~~compensation expense~~revenue and ~~other operating expenses.~~

◦an ~~The Other (unallocated corporate costs) Adjusted EBITDA loss increase was due primarily~~impairment charge recognized in the first quarter of 2024 of $2.0 million of an ROU asset related to ~~an increase in lease expense due to the repurposing of~~Angi Inc. reducing its real estate ~~for general and administrative functions in 2022.~~footprint.

•Search Adjusted EBITDA decreased ~~57%~~59% to ~~$10.8~~$4.4 million due primarily to lower ~~revenue.~~revenue, partially offset by lower traffic acquisition costs and selling and marketing expense.

•Emerging & Other Adjusted EBITDA ~~increased $13.9~~decreased $19.8 million to ~~$14.8~~a loss of $4.2 million due primarily to ~~higher profits at Care.com~~$16.5 million in severance expense and ~~Mosaic Group and~~transaction-related costs related to the sale of ~~Bluecrew, which had losses in the prior year period, partially offset by higher losses at IAC Films, Vivian Health, Newco~~assets of Mosaic Group on February 15, 2024 and ~~Daily Beast.~~lower profits from Care.com.

Interest expense

Three Months Ended March 31,
2023 $ Change % Change 2022
(Dollars in thousands)
Interest expense $ 38,172 $ 16,260 74% $ 21,912


	Three Months Ended March 31,
		2024		2023		2024 Change
						$ Change		% Change
		(Dollars in thousands)
Interest expense		$	(39,718)	$	(38,172)	$	(1,546)	4%

Interest expense in ~~2023~~2024 increased from ~~2022~~2023 due primarily to an increase in interest rates from 8.77% and 6.94% at March 31, 2023 to 9.43% and 7.68% at March 31, 2024 on the Dotdash Meredith Term ~~Loans.~~Loan B and Dotdash Meredith Term Loan A, respectively.

Unrealized gain ~~(loss)~~ on investment in MGM Resorts International ("MGM")

Three Months Ended March 31,
2023 $ Change % Change 2022
(Dollars in thousands)
Unrealized gain (loss) on investment in MGM Resorts International $ 704,840 $ 892,170 NM $ (187,330)


	Three Months Ended March 31,
		2024		2023		2024 Change
						$ Change		% Change
		(Dollars in thousands)
Unrealized gain on investment in MGM Resorts International		$	163,751	$	704,840	$	(541,089)	(77)%

During the fourth quarter of 2023, due to MGM's ongoing share repurchase program, which increased the Company's ownership interest passively, the Company determined that the equity method of accounting applied and elected to account for its investment in MGM pursuant to the fair value option. Prior to the fourth quarter of 2023, the Company's investment in MGM was accounted for as an equity security with a readily determinable fair value, with changes in fair value recognized through income each period. Since the Company has always marked its investment in MGM to fair value through income each period the election of the fair value option results in no change to the historical accounting for this investment.

For the three months ended March 31, 2024 and 2023, the Company recognized unrealized pre-tax gains of $163.8 million and $704.8 million, respectively, on its investment in MGM and were due to changes in the stock price of MGM's common stock as reported on the New York Stock Exchange. Based on the number of MGM common shares outstanding at March 31, 2024, the Company owns approximately 20.6% of MGM.

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~~The Company's investment in MGM is~~Other income, net


	Three Months Ended March 31,
		2024			2023
		(Dollars in thousands)
Net realized gain (loss) on sales of businesses, investments and upward (downward) adjustments to the carrying value of equity securities without readily determinable fair values(a)		$	25,941		$	(1,301)
Interest income		21,597			16,930
Unrealized (decrease) increase in the estimated fair value of a warrant		(10,232)			5,940
Foreign exchange (losses) gains, net		(1,741)			509
Unrealized loss related to marketable equity securities		—			(1,150)


Other		(760)			2,821
Other income, net		$	34,805		$	23,749

$ Change		$	11,056
% Change		47		%

_____________________

(a) Includes a pre-tax gain of $29.2 million on the sale of assets of Mosaic Group (within Emerging & Other), which was accounted for as a ~~marketable equity security and the unrealized pre-tax gain and loss~~sale of ~~$704.8 million and $187.3 million~~a business, in the three months ended March 31, ~~2023 and 2022, respectively, were due to changes in the price of MGM as reported on the New York Stock Exchange. As of March 31, 2023, the Company owns approximately 64.7 million shares in MGM.~~

~~Other income, net~~

Three Months Ended March 31,
2023 2022
(Dollars in thousands)
Interest income $ 16,930 $ 698
Unrealized increase in the estimated fair value of a warrant 5,940 7,985
Unrealized (loss) gain related to marketable equity securities (1,150) 34,352
Net periodic pension benefit costs, other than the service cost component (a)
(674) (35,359)
Other 2,703 (977)
Other income, net $ 23,749 $ 6,699
$ Change $ 17,050
% Change 255 %

~~_____________________~~

~~(a)~~ Includes pre-tax actuarial losses of $0.2 million for the three months ended March 31, 2023 related to the pension plans in the U.S. and $37.5 million for the three months ended March 31, 2022 related to the funded pension plans in the U.K. and U.S. See "~~Note 7—Pension and Postretirement Benefit Plans" to the financial statements included in "Item 1. Consolidated Financial Statements" for additional information.~~2024.

Income tax ~~(provision) benefit~~provision


		Three Months Ended March 31,
			2023		$ Change			% Change	2022
			(Dollars in thousands)									Three Months Ended March 31,
Income tax (provision) benefit			$	(139,502)	$	(209,966)		NM	$	70,464
													2024		2023		2024 Change
							$ Change													$ Change	% Change
													(Dollars in thousands)
Income tax provision											Income tax provision		$	(54,688)	$	(139,502)	$	84,814	61%
Effective income tax rate	Effective income tax rate		25%						23%

For further details of income tax matters, see "Note 8 —7—Income Taxes" to the financial statements included in "Item 1. Consolidated Financial Statements."

In ~~2023,~~2024, the effective income tax rate is higher than the statutory rate of 21% due primarily to ~~state taxes and~~the nondeductible portion of the goodwill in the sale of Mosaic Group, nondeductible compensation expense, and state taxes, partially offset by research ~~credits.~~credits and the realization of a capital loss.

In ~~2022,~~2023, the effective income tax rate is higher than the statutory rate of 21% due primarily to state taxes and ~~excess tax benefits generated by the exercise and vesting of stock-based awards,~~nondeductible compensation expense, partially offset by ~~nondeductible stock-based compensation expense.~~research credits.

Net loss attributable to noncontrolling interests

Three Months Ended March 31,
2023 $ Change % Change 2022
(Dollars in thousands)
Net loss attributable to noncontrolling interests $ 2,456 $ (2,639) (52)% $ 5,095


	Three Months Ended March 31,
		2024		2023		2024 Change
						$ Change		% Change
		(Dollars in thousands)
Net loss attributable to noncontrolling interests		$	59	$	2,456	$	(2,397)	(98)%

Net loss attributable to noncontrolling interests in ~~2023~~2024 and ~~2022~~2023 primarily represents the publicly-held interest in Angi Inc.'s losses.

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PRINCIPLES OF FINANCIAL REPORTING

The Company reports Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles ("GAAP"). This measure is considered our primary segment measure of profitability and one of the ~~primary~~ metrics by which we evaluate the performance of our businesses and our internal budgets are based and may also impact management compensation. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The Company endeavors to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure, which we discuss below.

Definition of Non-GAAP Measure

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration ~~arrangements.~~arrangements, if applicable. We believe this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

The following table reconciles net earnings ~~(loss)~~ attributable to IAC shareholders to operating loss to Adjusted EBITDA:


		Three Months Ended March 31,
			2023		2022
			(In thousands)				Three Months Ended March 31,
Net earnings (loss) attributable to IAC shareholders			$	417,775	$	(235,798)
								2024	2023
								(In thousands)
Net earnings attributable to IAC shareholders
Add back:	Add back:
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests		(2,456)		(5,095)
Income tax provision (benefit)			139,502		(70,464)
Net loss attributable to noncontrolling interests
Net loss attributable to noncontrolling interests
Income tax provision
Other income, net	Other income, net		(23,749)		(6,699)
Unrealized (gain) loss on investment in MGM Resorts International			(704,840)		187,330
Unrealized gain on investment in MGM Resorts International
Interest expense	Interest expense		38,172		21,912
Operating loss	Operating loss		(135,596)		(108,814)
Add back:	Add back:
Stock-based compensation expense	Stock-based compensation expense		28,941		29,687
Stock-based compensation expense
Stock-based compensation expense
Depreciation	Depreciation		61,172		30,236
Amortization of intangibles	Amortization of intangibles		54,606		57,190
Acquisition-related contingent consideration fair value adjustments			—		(612)

Adjusted EBITDA	Adjusted EBITDA		$	9,123	$	7,687

Adjusted EBITDA

Adjusted EBITDA

For a reconciliation of operating ~~loss~~(loss) income to Adjusted EBITDA for the Company's reportable segments, see "Note 6—5—Segment Information" to the financial statements included in "Item 1—Consolidated Financial Statements."

Non-Cash Expenses That Are Excluded from Our Non-GAAP Measure

Stock-based compensation expense consists of expense associated with awards that were granted under various IAC stock and annual incentive plans and expense related to awards issued by certain subsidiaries of the Company. These expenses are not paid in cash and we view the economic costs of stock-based awards to be the dilution to our share base; we also include the related shares in our fully diluted shares outstanding for GAAP earnings per share using the treasury stock method. The Company is currently settling all stock-based awards on a net basis; IAC remits the required tax-withholding amounts for net-settled awards from its current funds.

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Depreciation is a non-cash expense relating to our capitalized software, buildings, equipment ~~buildings~~ and leasehold improvements and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.

Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as advertiser relationships, technology, licensee relationships, trade names, content, ~~service professional relationships,~~ customer lists and user base, service professional relationships and subscriber relationships, are valued and amortized over their estimated lives. Value is also assigned to acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairments of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.

Gains and losses recognized on changes in the fair value of contingent consideration arrangements are accounting adjustments to report liabilities for the portion of the purchase price of acquisitions, if applicable, that is contingent ~~consideration liabilities~~upon the financial performance and/or operating targets of the acquired company at fair ~~value.~~value that are recognized in "General and administrative expense" in the statement of operations. These adjustments can be highly variable and are excluded from our assessment of performance because they are considered non-operational in nature and, therefore, are not indicative of current or future performance or the ongoing cost of doing business.

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Position

March 31, 2024

December 31, 2023

(In thousands)

Angi Inc. cash and cash equivalents:

United States

All other countries

March 31, 2023

December 31, 2022

Total Angi Inc. cash and cash equivalents

(In thousands)

Angi Inc. cash and cash equivalents and marketable debt securities:

United States

304,521

311,422

All other countries

10,439

9,733

Total cash and cash equivalents

314,960

321,155

Marketable debt securities (United States)

12,495

—

Total Angi Inc. cash and cash equivalents and marketable debt securities

327,455

321,155

Total Angi Inc. cash and cash equivalents

Dotdash Meredith cash and cash equivalents:

United States

262,498

109,000

All other countries

13,321

14,866

Total Dotdash Meredith cash and cash equivalents

275,819

123,866

IAC (excluding Dotdash Meredith and Angi Inc.) cash and cash equivalents and marketable securities:

IAC (excluding Angi Inc. and Dotdash Meredith) cash and cash equivalents and marketable securities:

United States

780,690

939,168

All other countries

27,367

33,201

Total cash and cash equivalents

808,057

972,369

Marketable securities (United States)

189,643

239,373

Total IAC (excluding Dotdash Meredith and Angi Inc.) cash and cash equivalents and marketable securities

997,700

1,211,742

Total IAC (excluding Angi Inc. and Dotdash Meredith) cash and cash equivalents and marketable securities

Total cash and cash equivalents and marketable securities

1,600,974

1,656,763

Total cash and cash equivalents and marketable securities


Dotdash Meredith Debt:	Dotdash Meredith Debt:
Dotdash Meredith Term Loan A
Dotdash Meredith Term Loan A
Dotdash Meredith Term Loan A	Dotdash Meredith Term Loan A	$	328,125	$	332,500
Dotdash Meredith Term Loan B	Dotdash Meredith Term Loan B	1,234,375		1,237,500
Total Dotdash Meredith long-term debt	Total Dotdash Meredith long-term debt	1,562,500		1,570,000
Less: current portion of Dotdash Meredith long-term debt	Less: current portion of Dotdash Meredith long-term debt	30,000		30,000
Less: original issue discount	Less: original issue discount	5,100		5,310
Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	9,762		10,215
Total Dotdash Meredith long-term debt, net	Total Dotdash Meredith long-term debt, net	1,517,638		1,524,475

ANGI Group Debt:	ANGI Group Debt:
ANGI Group Debt:
ANGI Group Debt:
ANGI Group Senior Notes
ANGI Group Senior Notes
ANGI Group Senior Notes	ANGI Group Senior Notes	500,000		500,000
Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	4,531		4,716
Total ANGI Group long-term debt, net	Total ANGI Group long-term debt, net	495,469		495,284

Total long-term debt, net	Total long-term debt, net	$	2,013,107	$	2,019,759
Total long-term debt, net
Total long-term debt, net

The Company's international cash can be repatriated without significant tax consequences.

For a detailed description of interest rate swaps and long-term debt, see "Note 4—1—The Company and Summary of Significant Accounting Policies" and "Note 3—Long-term Debt" to the financial statements included in "Item 1. Consolidated Financial Statements."

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Cash Flow Information

In summary, IAC's cash flows are as follows:


		Three Months Ended March 31,				Three Months Ended March 31,
		2023		2022		2024	2023
		(In thousands)
	(In thousands)							(In thousands)
Net cash provided by (used in):	Net cash provided by (used in):
Operating activities
Operating activities
Operating activities	Operating activities	$	25,167	$	12,902
Investing activities	Investing activities	$	51,974	$	(231,589)
Financing activities	Financing activities	$	(95,975)	$	(27,482)

Net cash provided by operating activities attributable to continuing operations consists of net earnings adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments include the unrealized ~~(gains) losses~~gain on the investment in MGM, deferred income taxes, depreciation, non-cash lease expense (including ROU impairments), amortization of intangibles, ~~pension and postretirement benefit~~stock-based compensation expense, net (gains) losses ~~(gains)~~ on sales of businesses and investments in equity securities, ~~stock-based compensation expense,~~ provision for credit losses and unrealized ~~increase~~decrease (increase) in the estimated fair value of a warrant.

2024

Adjustments to net earnings consist primarily of an unrealized gain on the investment in MGM of $163.8 million and net gains on sales of businesses and investments in equity securities of $25.9 million primarily related to the sale of assets at Mosaic Group in February 2024, partially offset by deferred taxes of $45.0 million, amortization of intangibles of $36.7 million, depreciation of $36.6 million, stock-based compensation expense of $28.9 million, provision of credit losses of $16.1 million, non-cash lease expense of $14.8 million and an unrealized decrease in the estimated fair value of a warrant of $10.2 million. The increase from changes in working capital include a decrease in accounts receivable of $56.1 million, a decrease in other assets of $44.5 million, an increase in deferred revenue of $17.9 million and an increase in income taxes payable and receivable of $8.8 million, partially offset by decreases in accounts payable and other liabilities of $89.5 million and operating lease liabilities of $17.3 million. The decrease in accounts receivable is due primarily to a decrease in revenue in the first quarter of 2024 relative to the fourth quarter of 2023 at Dotdash Meredith and a decrease at Mosaic Group due to cash receipts prior to the sale of its assets, partially offset by an increase at Angi Inc., due primarily to timing of cash receipts. The decrease in other assets is due primarily to receipt of pre-acquisition income tax refunds at Dotdash Meredith, payment received related to insurance coverage for previously incurred legal fees at Angi Inc. and a decrease in prepaid hosting services at Angi Inc., Dotdash Meredith and Corporate. The increase in deferred revenue is due primarily to timing of annual subscription renewals at Care.com. The increase in income taxes payable and receivable is due to income tax accruals in excess of payments, primarily due to the sale of assets of Mosaic Group. The decrease in accounts payable and other liabilities is due primarily to decreases in accrued employee compensation, due primarily to payment of 2023 bonuses in 2024 and a decrease in accrued payroll due to timing of payments, and accrued traffic acquisition costs and related payables at Search and Dotdash Meredith. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion.

Net cash provided by investing activities includes net proceeds from the sales of businesses and investments of $159.7 million, including $155 million from the sale of assets of Mosaic Group, maturities of marketable debt securities of $137.5 million and net proceeds from the sales of assets of $12.7 million, principally from the sale of an aircraft at Dotdash Meredith, partially offset by $123.1 million for the purchases of marketable debt securities and capital expenditures of $15.7 million primarily related to investments of $12.7 million in capitalized software at Angi Inc. to support its products and services.

Net cash used in financing activities includes withholding taxes paid on behalf of IAC employees, excluding Angi Inc., for stock-based awards that were net settled of $8.2 million, principal payments on Dotdash Meredith Term Loan A and Dotdash Meredith Term Loan B of $7.5 million, the repurchase of 2.9 million shares of Angi Inc. Class A common stock, on a settlement date basis, for $6.9 million at an average price of $2.37 per share and withholding taxes paid on behalf of Angi Inc. employees for stock-based awards that were net settled of $3.2 million.

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2023

Adjustments to net earnings consist primarily of an unrealized gain on the investment in MGM of $704.8 million and an unrealized increase in the estimated fair value of a warrant of $5.9 million, partially offset by deferred taxes of $127.2 million, depreciation of $61.2 million, non-cash lease expense of $58.7 million, amortization of intangibles of $54.6 million, stock-based compensation expense of $28.9 million, provision of credit losses of $24.8 million and net losses on sales of ~~businesses~~business and investments in equity securities of $2.5 million. The decrease from changes in working capital include decreases in accounts payable and other liabilities of $107.4 million and operating lease liabilities of $19.7 million, partially offset by a decrease in accounts receivable of $43.0 million, a decrease in other assets of $27.0 million and an increase in deferred revenue of $15.4 million. The decrease in accounts payable and other liabilities is due primarily to a decreases in ~~(i)~~ accrued employee compensation, due primarily to payment of 2022 bonuses in 2023, a decrease in accrued payroll due to timing of payments and restructuring related severance payments at Dotdash Meredith, and ~~(ii)~~ decreases in accounts payable at Dotdash Meredith, due primarily to a decrease in spend in the first quarter of 2023 relative to the fourth quarter of 2022 and timing of payments, and at Care.com, due primarily to timing of payments. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The decrease in accounts receivable is due primarily to a decrease in revenue in the first quarter of 2023 relative to the fourth quarter of 2022 at Dotdash Meredith, partially offset by an increase at Angi Inc., due primarily to timing of cash receipts for credit card transactions. The decrease in other assets is due, in part, to a decrease in prepaid hosting services at Angi Inc., Dotdash Meredith and Corporate. The increase in deferred revenue is due primarily to timing of annual subscription renewals at Care.com.

Net cash provided by investing activities includes maturities of marketable debt securities of $137.5 million and net proceeds from the sales of assets of $29.4 million, including $28.9 million related to the sale of a building at Dotdash Meredith, partially offset by $98.5 million for the purchases of marketable debt securities and capital expenditures of $21.9 million primarily related to investments of $11.3 million in capitalized software at Angi Inc. to support its products and services and payment of $8.1 million related to the acquisition of the formerly leased land under IAC's New York City headquarters building. The purchase of the land was completed in April 2023.

Net cash used in financing activities includes the repurchase of 1.7 million shares of IAC common stock, on a settlement date basis, for $84.7 million at an average price of $51.16 per share, principal payments on Dotdash Meredith Term Loan A and Dotdash Meredith Term Loan B of $7.5 million, withholding taxes paid on behalf of IAC employees, excluding Angi Inc., for stock-based awards that were net settled of $2.2 million and withholding taxes paid on behalf of Angi Inc. employees for stock-based awards that were net settled of $1.4 million.

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~~2022~~

Adjustments to net loss consist primarily of an unrealized loss on the investment in MGM of $187.3 million, amortization of intangibles of $57.2 million, pension and postretirement benefit expense of $36.3 million, depreciation of $30.2 million, stock-based compensation expense of $29.7 million, provision of credit losses of $23.3 million and non-cash lease expense of $13.7 million, partially offset by deferred taxes of $76.9 million, net gains on investments in equity securities of $35.9 million and an unrealized increase in the estimated fair value of a warrant of $8.0 million. The decrease from changes in working capital include decreases in accounts payable and other liabilities of $82.6 million and operating lease liabilities of $17.2 million, partially offset by a decrease in accounts receivable of $75.6 million and an increase in deferred revenue of $11.3 million. The decrease in accounts payable and other liabilities is due primarily to a decrease in accrued employee compensation due, in part, to payment of 2021 bonuses in 2022 and payment of commissions, partially offset by an increase in restructuring charges at Dotdash Meredith, and a decrease in accrued traffic acquisition costs at Search. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The decrease in accounts receivable is due primarily to a decrease in revenue in the first quarter of 2022 relative to the fourth quarter of 2021 at Dotdash Meredith and Search, partially offset by revenue growth at Angi Inc., primarily attributable to Angi Services. The increase in deferred revenue is due primarily to timing of annual subscription renewals at Care.com.

Net cash used in investing activities includes $202.5 million for the purchase of an additional 4.5 million shares of MGM and capital expenditures of $30.5 million primarily related to investments in capitalized software at Angi Inc. to support its products and services.

Net cash used in financing activities includes withholding taxes paid on behalf of IAC employees, excluding Angi Inc., for stock-based awards that were net settled of $14.9 million, the repurchase of 1.0 million shares of Angi Inc. Class A common stock, on a settlement date basis, for $8.1 million at an average price of $7.80 per share, principal payments on Dotdash Meredith Term Loan A and Dotdash Meredith Term Loan B of $7.5 million and withholding taxes paid on behalf of Angi Inc. employees for stock-based awards that were net settled of $1.3 million.

Liquidity and Capital Resources

~~Financing Arrangements~~

In March 2023, Dotdash Meredith entered into interest rate swaps for a total notional amount of $350 million with a maturity date of April 1, 2027 to manage interest rate risk exposure. Dotdash Meredith designated the interest rate swaps as cash flow hedges and applies hedge accounting to these contracts. The interest rate swaps synthetically convert $350 million of the Dotdash Meredith Term Loan B for the duration of the interest rate swaps to a fixed rate of approximately 7.92% ((i) the weighted average fixed interest rate of approximately 3.82% on the interest rate swaps plus (ii) the adjustment to the secured overnight financing rate of 0.10% plus (iii) the base rate of 4.00%), beginning April 2023.

~~For a detailed description of long-term debt and interest rate swaps, see "Note 1—The Company and Summary of Significant Accounting Policies" and "Note 4—Long-term Debt" to the financial statements included in "Item 1—Consolidated Financial Statements~~."

Investment in MGM

At March 31, ~~2023,~~2024, the Company owns 64.7 million common shares of MGM. Based on the number of MGM ~~including 4.5 million~~common shares ~~purchased in~~outstanding at March 31, 2024, the ~~first quarter of 2022 for $202.5 million, representing a~~ ~~17.6%~~Company owns 20.6% o~~wnership.~~f MGM.

Investment in Turo

~~In April 2023, the Company purchased additional shares of Turo for $103.6 million. Following the purchase,~~At March 31, 2024, IAC's aggregate percentage ownership in Turo is approximately ~~31%.~~29%, on an as-converted basis. The Company has a warrant in Turo that expires on July 23, 2024 and has the option to gross or net settle the instrument. The Company is currently assessing its options and, if gross settled, the Company expects to use approximately $200 million in cash.

Share Repurchase Authorizations and Activity

At May 3, 2024, IAC had 3.7 million shares remaining in its share repurchase authorization.

During the three months ended March 31, 2024, Angi repurchased 2.8 million shares of its Class A common stock, on a trade date basis, at an average price of $2.37 per share, or $6.7 million in aggregate. During the fourth quarter of 2023, ~~IAC~~Angi Inc. announced its intent to utilize the remaining 14.0 million shares in its stock repurchase authorization. From April 1, 2024 through May 3, 2024, Angi Inc. repurchased ~~1.8~~an additional 3.1 million shares of its common stock, on a trade date basis, at an average price of ~~$51.16~~$2.22 per share, or $90.9 million in aggregate. From April 1, 2023 through May 5, 2023, IAC repurchased an additional 1.3 million shares of its common stock, on a trade date basis, at an average price of $50.47 per share, or $67.2$6.8 million in aggregate. At May ~~5, 2023, IAC has 3.8~~3, 2024, Angi Inc. had 4.7 million shares remaining in its share repurchase authorization.

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~~At May 5, 2023 Angi Inc. has 15.0 million shares remaining in its share repurchase authorization.~~

IAC and Angi Inc. may purchase their shares ~~and debt instruments~~pursuant to their authorizations over an indefinite period of time onin the open market and in privately negotiated transactions, depending on those factors management deems relevant at any particular time, including, without limitation, market conditions, price and future outlook.

~~Outstanding Stock-based Awards~~Contractual Obligations

IAC and Angi Inc. may settle stock options, stock settled stock appreciation rights, restricted stock units ("RSUs") and restricted stock on a gross or a net basis based upon factors deemed relevant at the time.To the extent that equity awards are settled on a net basis, the holders of the awards receive shares of IAC or Angi Inc., as applicable, with a value equal to the fair value of the award on the vest date for RSUs and restricted stock and with a value equal to the intrinsic value of the award upon exercise for stock options or stock settled appreciation rights less, in each case, an amount equal to the required cash tax withholding payment, which will be paid by IAC or Angi Inc., as applicable, on the employee's behalf.~~All awards are being settled currently on a net basis.~~

The following table summarizes (i) the aggregate intrinsic value of IAC options, Angi Inc. options, Angi Inc. stock settled stock appreciation rights, IAC and Angi Inc. non-publicly traded subsidiary denominated stock settled stock appreciation rights and (ii) the aggregate fair value (based on stock prices as of May 5, 2023) of IAC and Angi Inc. RSUs and IAC restricted stock outstanding as of that date; assuming these awards were net settled on that date, the withholding taxes that would be paid by the Company on behalf of employees upon exercise or vesting that would be payable (assuming these equity awards are net settled with a 50% tax rate) and the shares that would have been issued are as follows:

Aggregate intrinsic value / fair value of awards outstanding Estimated withholding taxes payable on vested shares and shares that will vest by March 31, 2024 Estimated withholding taxes payable on shares that will vest after March 31, 2024 Estimated IAC shares to be issued
(In thousands)
IAC
Stock settled stock appreciation rights denominated in shares of certain non-publicly traded IAC subsidiaries other than Angi Inc. subsidiaries (a)
$ 27,921 $ 11,568 $ 2,392 263
IAC denominated stock options (b)
108,721 54,360 — 1,024
IAC RSUs (c)
91,943 2,658 42,136 888
IAC restricted stock (d)
— — — —
Total IAC outstanding employee stock-based awards 228,585 68,586 44,528 2,175
Angi Inc.
Angi Inc. RSUs 61,800 7,586 22,801
Angi Inc. stock appreciation rights — — — See footnote (f) below
Other Angi Inc. equity awards (a)(e)
46 23 — See footnote (f) below
Total Angi Inc. outstanding employee stock-based awards 61,846 7,609 22,801
Total outstanding employee stock-based awards $ 290,431 $ 76,195 $ 67,329

~~_____________________~~

~~(a)~~ The number of shares ultimately needed to settle these awards and the cash withholding tax obligation may vary significantly as a result of the determination of the fair value of the relevant subsidiary at the time of exercise. In addition, the number of shares required to settle these awards will be impacted by movement in the stock price of IAC.

~~(b)~~ The Company has the discretion to settle these awards net of withholding tax and exercise price (which is represented in the table above) or settle on a gross basis and require the award holder to pay its share of the withholding tax, which he or she may do by selling IAC common shares. Assuming all IAC stock options outstanding on May 5, 2023 were settled on a gross basis (i.e., through the issuance of a number of IAC common shares equal to the number of stock options exercised) the Company would have issued~~2.8 million~~ co~~mmon shares and would have received $39.2 million~~ ~~in cash proceeds.~~

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~~(c)~~ ~~Approximately 70% of the estimated withholding taxes payable on RSUs, which vest after~~At March 31, 2024, ~~is related to awards that are scheduled to cliff vest in 2025, the~~ ~~five-year anniversary of the grant date.~~

~~(d)~~ ~~On November 5, 2020, the Company granted~~ 3.0 million shares of IAC restricted common stock to its CEO, that cliff vest on the ten-year anniversary of the grant date based on satisfaction of IAC's stock price targets and continued employment through the vesting date. The IAC stock price is currently below the minimum price threshold to earn the award.

~~(e)~~ ~~Includes Angi Inc. stock options and subsidiary denominated equity.~~

~~(f)~~ Pursuant to the employee matters agreement between IAC and Angi Inc., certain stock appreciation rights of Angi, Inc. and equity awards denominated in shares of Angi Inc.'s subsidiaries may be settled in either shares of Angi Inc. common stock or IAC common stock. To the extent shares of IAC common stock are issued in settlement of these awards, Angi Inc. is obligated to reimburse IAC for the cost of those shares by issuing shares of Angi Inc. common stock.

~~Contractual Obligations~~

In March 2023, the Company entered into an agreement to acquire the formerly leased land under its New York City headquarters building, which purchase was completed in April 2023 for a total purchase price of approximately $80.0 million, including $8.1 million paid in March 2023. At March 31, 2023, there have been no ~~other~~ material changes to the Company's contractual obligations since the disclosures for the year ended December 31, ~~2022,~~2023, included in the Company's Annual Report on Form 10-K.

Capital Expenditures

The Company anticipates that it will need to make capital expenditures in connection with the development and expansion of its operations. The Company's ~~2023~~2024 capital expenditures are expected to be ~~higher~~lower than its ~~2022~~2023 capital expenditures of ~~$139.8~~$141.4 million by approximately 5%40% to ~~10%~~50%, due primarily to the acquisition of the formerly leased land ~~described above,~~under IAC's New York City headquarters building in 2023, partially offset by ~~lower capital expenditures~~an increase related to ~~the development of~~ capitalized software at Angi Inc. ~~and Care.com.~~

Liquidity Assessment

On a consolidated basis, the Company generated positive cash flows from operating activities of ~~$25.2~~$64.1 million for the three months ended March 31, ~~2023;~~2024; excluding the positive cash flows from operating activities of ~~$19.1~~$56.2 million and $22.3 million generated by Dotdash Meredith and Angi Inc. ~~and~~, respectively, the Company generated negative cash flows from operating activities of ~~$5.8 million generated by Dotdash Meredith, the Company generated positive cash flows from operating activities of $11.9~~$14.4 million.

At March 31, ~~2023,~~2024, the Company's consolidated cash, cash equivalents and marketable securities, excluding MGM, were $1.6 billion, of which ~~$327.5~~$363.3 million and ~~$275.8~~$268.7 million was held by Angi Inc. and Dotdash Meredith, respectively. The Company's consolidated debt includes approximately ~~$1.6~~$1.5 billion, which is a liability of Dotdash Meredith Inc., and $500.0 million, which is a liability of ANGI Group, a subsidiary of Angi Inc. The Dotdash Meredith Credit Agreement contains covenants that would limit Dotdash Meredith’s ability to pay dividends, incur incremental secured indebtedness, or make distributions or certain investments in the event a default has occurred or if Dotdash Meredith’s consolidated net leverage ratio exceeds 4.0 to 1.0, subject to certain available amounts as defined in the Dotdash Meredith Credit ~~Agreement, exceeds 4.0 to 1.0; this~~Agreement. This ratio was exceeded for the test period ended March 31, ~~2023.~~2024. The Dotdash Meredith Credit Agreement also permits ~~the Company~~IAC to, among other things, contribute cash to Dotdash Meredith which will provide additional liquidity to ensure that Dotdash Meredith does not exceed certain consolidated net leverage ratios for any test period, as further defined in the Dotdash Meredith Credit Agreement. In connection with these capital contributions, Dotdash Meredith may make distributions to IAC in amounts not more than any such capital contributions, provided that no default has occurred and is continuing. Such capital contributions and subsequent distributions impact the consolidated net leverage ratios of Dotdash Meredith. In the three months ended March ~~2023, the Company~~31, 2024, IAC contributed ~~$135.0~~$55 million to Dotdash Meredith, which Dotdash Meredith subsequently distributed back to ~~the Company~~IAC in April 2024. In addition, Dotdash Meredith distributed $105 million back to IAC in January 2024 related to the Company's contribution in December 2023. Angi Inc. is an independent public company with its own public shareholders and board of directors and has no obligation to provide the Company with funds. As a result, the Company cannot freely access the cash of Angi Inc. and its subsidiaries.

The Company's liquidity could be negatively affected by a decrease in demand for its products and services due to economic or other factors.

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The Company believes Angi Inc.'s and Dotdash Meredith's existing cash, cash equivalents and expected positive cash flows from operations, and the Company's existing cash and cash equivalents and expected positive cash flows from operations, excluding Angi Inc. and Dotdash Meredith, will be sufficient to fund their respective normal operating requirements, including capital expenditures, debt service, the payment of withholding taxes paid on behalf of employees for net-settled stock-based awards and investing and other commitments for the next twelve months. The Company may need to raise additional capital through future debt or equity financing to make acquisitions and investments. Additional financing may not be available on terms favorable to the Company, or at all, and may also be impacted by any disruptions in the financial markets. The indebtedness at Dotdash Meredith and Angi Inc. could further limit the Company's ability to raise additional financing.

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Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk

Equity Price Risk

At March 31, ~~2023,~~2024, the Company owns ~~approximately~~ 64.7 million common shares of MGM. During the fourth quarter of 2023, due to MGM's ongoing share repurchase program, which increased the Company's ownership interest passively, the Company determined that the equity method of accounting applied and elected to account for its investment in MGM pursuant to the fair value option. Prior to the fourth quarter of 2023, the Company's investment in MGM was accounted for as an equity security with a readily determinable fair value, with changes in fair value recognized through income each period. Since the Company has always marked its investment in MGM to fair value through income each period the election of the fair value option results in no change from its historical accounting for this investment. For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, the Company ~~recorded~~recognized an unrealized ~~pre-tax~~ gain ~~and loss~~ of ~~$704.8~~$163.8 million and ~~$187.3~~$704.8 million, respectively, on its investment in MGM.

The cumulative unrealized net pre-tax gain through March 31, ~~2023~~2024 is ~~$1.6~~$1.8 billion. At March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, the carrying value of the Company's investment in MGM, which includes the cumulative unrealized pre-tax gains, was ~~$2.9~~$3.1 billion and ~~$2.2~~$2.9 billion, or approximately ~~27%~~29% and ~~21%~~28% of the Company's consolidated total assets, respectively. A $2.00 increase or decrease in the share price of MGM would result in an unrealized gain or loss, respectively, of $129.4 million. At May ~~5, 2023,~~3, 2024, the ~~carrying~~fair value of the Company's investment in MGM was ~~$2.8~~$2.66 billion. The Company's results of operations and financial condition have in the past been and may in the future be materially impacted by increases or decreases in the price of MGM common shares, which are traded on the New York Stock Exchange.

Interest Rate Risk

At March 31, ~~2023,~~2024, the principal amount of the Company's outstanding debt totals ~~$2.1~~$2.03 billion, of which ~~$1.6~~$1.53 billion is the Dotdash Meredith Term Loans, which bear interest at a variable rate, and ~~$500.0~~$500 million is the ANGI Group Senior Notes, which bear interest at a fixed rate.

~~During the three months ended~~In March ~~31,~~ 2023, ~~Adjusted Term SOFR for the~~ Dotdash Meredith ~~Term Loans increased an average of approximately 65 basis points relative to December 31, 2022. As a result of the increase in Adjusted Term SOFR during the three months ended March 31, 2023, the~~entered into interest ~~expense~~rate swaps on Dotdash Meredith Term Loans was $2.0 million higher as compared to what interest expense would have been if the Adjusted Term SOFR been unchanged during 2023. At March 31, 2023, the outstanding balance of $1.23 billion related to the Dotdash Meredith Term Loan B bore interest at Adjusted SOFR, subject to a minimum of 0.50%, plus 4.00%, or 8.77%, and the outstanding balance of $328.1 million related to the Dotdash Meredith Term Loan A bore interest at Adjusted Term SOFR plus 2.25%, or 6.94%. If Adjusted Term SOFR were to increase or decrease by 100 basis points, the annual interest expense on the Dotdash Meredith Term Loans would increase or decrease by $15.7 million, excluding the impact of our interest rate swaps. In March 2023, we entered into interest rate swaps for a total notional amount of $350 million towith a maturity date of April 1, 2027. The interest rate swaps synthetically ~~convert a portion~~converted $350 million of the Dotdash Meredith Term Loan B for the duration of the interest rate swaps from ~~floating~~a variable rate to a fixed rate to manage interest rate risk exposure beginning on April 3, 2023 and applies hedge accounting to these contracts. See "Note 1—The Company and Summary of Significant Accounting Policies" and "Note 4—3—Long-term Debt" to the financial statements included in "Item 1—Consolidated Financial Statements" for more information. The fair value of the interest rate swaps is ~~estimated based on~~determined using discounted cash flows ~~the Company~~derived from observable market prices, including swap curves, and represents what Dotdash Meredith would pay or receive to terminate the swap agreements. ~~The Company~~Dotdash Meredith intends to continue to meet the conditions for hedge accounting, however, if these interest rate swaps were not highly effective in offsetting cash flows attributable to the hedged risk, the changes in the fair value of the interest rate swaps used as hedges could have a significant impact on ~~our~~ future results of operations.

During the three months ended March 31, 2024, adjusted term secured overnight financing rate ("Adjusted Term SOFR") for the Dotdash Meredith Term Loans decreased an average of approximately two basis points relative to December 31, 2023. Had Adjusted Term SOFR been unchanged during the first quarter of 2024, the impact of this decrease would have had a nominal effect on interest expense. At March 31, 2024, the outstanding balance of $1.22 billion related to the Dotdash Meredith Term Loan B bore interest at Adjusted SOFR, subject to a minimum of 0.50%, plus 4.00%, or 9.43%, and the outstanding balance of $310.6 million related to the Dotdash Meredith Term Loan A bore interest at Adjusted Term SOFR plus 2.25%, or 7.68%. If Adjusted Term SOFR were to increase or decrease by 100 basis points, the annual interest expense on the Dotdash Meredith Term Loans, net of the impact related to the $350 million in notional amount of interest rate swaps, would increase or decrease by $11.8 million.

If market rates decline relative to interest rates on the ANGI Group Senior Notes, the Company runs the risk that the related required interest payments will exceed those based on market rates. A 100-basis point increase or decrease in the level of interest rates would, respectively, decrease or increase the fair value of the fixed-rate debt by ~~$22.9~~$19.3 million. Such potential increase or decrease in fair value is based on certain simplifying assumptions, including an immediate increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period, nor changes in the credit profile.

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Item 4. Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), management, including our Chairman and Senior Executive, Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), conducted an evaluation, as of the end of the period covered by this quarterly report, of the effectiveness of the Company's disclosure controls and procedures as defined by Rule 13a-15(e) under the Exchange Act. Based on this evaluation, our Chairman and Senior Executive, CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

The Company monitors and evaluates on an ongoing basis its internal control over financial reporting in order to improve its overall effectiveness. In the course of these evaluations, the Company modifies and refines its internal processes as conditions warrant.

During the quarter ended March 31, ~~2023,~~2024, there have been no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

Overview

In the ordinary course of business, IAC and its subsidiaries may become parties to litigation involving property, personal injury, contract, intellectual property and other claims, as well as stockholder derivative actions, class action lawsuits and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. The litigation matter described below involves issues or claims that may be of particular interest to IAC's stockholders, regardless of whether such matter may be material to IAC's financial position or operations based upon the standard set forth in the rules of the Securities and Exchange Commission.

Shareholder Litigation Arising Out of the MTCH Separation

This shareholder class action ~~and derivative lawsuit~~ pending in Delaware state court is described in detail under the captions Part I-Item 3-Legal Proceedings of our annual report on Form 10-K for the fiscal year ended December 31, ~~2022 (page 34)~~2023 (pages 34-35). See ~~David Newman v. IAC/InterActiveCorp et al.~~,~~No. 2020-0505 (Delaware Chancery Court), and~~ ~~Construction Industry & Laborers Joint Pension Trust for Southern Nevada Plan A v. IAC/InterActiveCorp et al.~~ ~~(Delaware Chancery Court), which have been consolidated under the caption~~ In re Match Group, Inc. Derivative Litigation,,No. ~~2020-0505.~~2020-0505 (Delaware Chancery Court). This lawsuit alleges that the terms of the MTCH Separation (as defined on page 2825 of this quarterly report) are unfair to the former Match Group public shareholders and unduly beneficial to IAC as a result of undue influence by IAC and Mr. Diller over the then Match Group directors who unanimously approved the transaction and asserts a variety of ~~direct and derivative~~ claims. As previously reported, the ~~court dismissed~~Delaware Chancery Court granted the defendants’ motion to dismiss the action in September 2022, and the plaintiffs ~~appealed. On~~appealed to the Delaware Supreme Court. Following oral argument on the plaintiffs’ appeal, in May 3, 2023, the Delaware Supreme Court issued an order directing the parties to submit supplemental briefing on the correct legal standard governing judicial review of the MTCH Separation, namely whether review under the more deferential business-judgment rule is triggered when such a transaction has been approved by either a committee of independent directors or a majority vote of the minority stockholders. Supplemental briefing was completed in September 2023 and the court heard further oral argument onfrom the ~~appeal, which remains pending.~~ parties in December 2023.

On April 4, 2024, the Delaware Supreme Court issued its decision, holding: (i) that in order to be subject to review under the more deferential business-judgment rule, rather than “entire fairness” review, the MTCH Separation transaction must have been approved by both a committee of independent directors and a majority vote of the Match Group minority shareholders, (ii) that the Delaware Chancery Court correctly ruled that the plaintiffs had pleaded sufficient facts to call into question the independence of one of the three members of the special committee that had negotiated and approved the transaction, (iii) that the Delaware Chancery Court had incorrectly ruled that the plaintiffs had nevertheless failed to call into question the independence of the special committee as a whole, because all members of the committee must be independent in order for the committee as a whole to be independent, and (iv) that the Delaware Chancery Court had correctly dismissed the plaintiffs’ derivative claims for lack of standing, leaving only their direct claims for adjudication. The Delaware Supreme Court remanded the case to the Delaware Chancery Court for further proceedings, and the case will now proceed to discovery.

IAC believes that the allegations in this litigation are without merit and will continue to defend vigorously against them.

Item 1A. Risk Factors

Cautionary Statement Regarding Forward-Looking Information

This quarterly report on Form 10-Q contains "forward‑looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipates," "estimates," "expects," "plans" and "believes," among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: IAC's future financial performance, IAC's business prospects and strategy, anticipated trends and prospects in the industries in which IAC's businesses operate and other similar matters. These forward-looking statements are based on IAC management's expectations and assumptions about future events as of the date of this quarterly report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

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Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: (i) our ability to market our products and services in a successful and cost-effective manner, (ii) the display of links to websites offering our products and services in a prominent manner in search results, (iii) changes in our relationship with (or policies implemented ~~by)~~by) Google, (iv) our ~~continued~~ ability to ~~market, distribute~~compete with generative artificial intelligence technology and ~~monetize our products and services through search engines, digital app stores, advertising networks and social media platforms,~~the related disruption to marketing technologies, (v) the failure or delay of the markets and industries in which our businesses operate to migrate online and the continued growth and acceptance of online products and services as effective alternatives to traditional products and services, (vi) our continued ability to develop and monetize versions of our products and services for mobile and other digital devices, (vii) adverse economic events or trends that adversely impact advertising spending levels, (viii) the ability of our Digital business to successfully expand the digital reach of our portfolio of publishing brands, (ix) our continued ability to market, distribute and monetize our products and services through search engines, digital app stores, advertising networks and social media platforms, (x) risks related to our Print business (declining revenue, increased paper and postage costs, reliance on a single supplier to print our magazines and potential increases in pension plan obligations), ~~(x)~~(xi) our ability to establish and maintain relationships with quality and trustworthy service professionals and caregivers, ~~(xi)~~(xii) the ability of Angi Inc. to ~~successfully implement~~expand its ~~brand initiative and expand Angi Services (its~~ pre-priced ~~offerings),~~offerings, while balancing the overall mix of service requests and directory services on Angi platforms, ~~(xii)~~(xiii) the ability of Angi Inc. to continue to generate leads for service professionals given changing requirements applicable to certain communications with consumers, (xiv) our ability to access, collect and use personal data about our users and subscribers, ~~(xiii)~~(xv) our ability to engage directly with users, subscribers, consumers, service professionals and caregivers on a timely basis, ~~(xiv)~~(xvi) the ability of our Chairman and Senior Executive, certain members of his family and our Chief Executive Officer to exercise significant influence over the composition of our board of directors, matters subject to stockholder approval and our operations, ~~(xv)~~(xvii) risks related to our liquidity and indebtedness (the impact of our indebtedness on our ability to operate our business, our ability to generate sufficient cash to service our indebtedness and interest rate risk), ~~(xvi)~~(xviii) our inability to freely access the cash of Dotdash Meredith and/or Angi Inc. and their respective subsidiaries, ~~(xvii)~~(xix) dilution with respect to investments in IAC and Angi Inc., ~~(xviii)~~(xx) our ability to compete, ~~(xix)~~(xxi) adverse economic events or trends (particularly those that adversely impact consumer confidence and spending behavior), either generally and/or in any of the markets in which our businesses operate, as well as geopolitical conflicts, ~~(xx)~~(xxii) our ability to build, maintain and/or enhance our various brands, ~~(xxi) the adverse impact of COVID-19 and other similar outbreaks on our businesses, (xxii)~~(xxiii) our ability to protect our systems, technology and infrastructure from cyberattacks and to protect personal and confidential user information (including credit card information), as well as the impact of cyberattacks experienced by third parties, ~~(xxiii)~~(xxiv) the occurrence of data security breaches and/or fraud, ~~(xxiv)~~(xxv) increased liabilities and costs related to the processing, storage, use and disclosure of personal and confidential user information, ~~(xxv)~~(xxvi) the integrity, quality, efficiency and scalability of our systems, technology and infrastructure (and those of third parties with whom we do business) and ~~(xxvi)~~(xxvii) changes in key personnel.

Certain of these and other risks and uncertainties are discussed in our filings with the SEC, including under the caption Part I-Item 1A-Risk Factors of our annual report on 10-K for the fiscal year ended December 31, ~~2022, as well as below.~~2023. Other unknown or unpredictable factors that could also adversely affect IAC's business, financial condition and ~~operating~~ results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of IAC management as of the date of this quarterly report. IAC does not undertake to update these forward-looking statements.

Risk Factors

In addition to the other information set forth in this quarterly report, you should carefully consider the risk factors discussed under the caption Part I-Item 1A-Risk Factors of our annual report on 10-K for the fiscal year ended December 31, ~~2022, and the risk factor below,~~2023, any or all of which could materially and adversely affect IAC's business, financial condition or ~~future results.~~results of operations. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect IAC's business, financial condition and/or ~~operating results.~~results of operations.

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~~Marketing efforts designed to drive visitors to our various brands and businesses may not be successful or cost-effective.~~

Traffic building and conversion initiatives involve considerable expenditures for online and offline advertising and marketing. We have made, and expect to continue to make, significant expenditures for search engine marketing (primarily in the form of the purchase of keywords, which we purchase primarily through Google and, to a lesser extent, Microsoft and Yahoo!), social media advertising and other online display advertising and traditional offline advertising (including television and radio campaigns) in connection with these initiatives, which may not be successful or cost-effective. Also, to continue to reach consumers and users, we will need to continue to identify and devote more of our overall marketing expenditures to newer digital advertising channels (such as online video, social media, streaming, OTT and other digital platforms), as well as target consumers and users via these channels in a cost-effective manner. As these channels continue to evolve relative to traditional channels (such as television), it could continue to be difficult to assess returns on related marketing investments. Historically, we have had to increase advertising and marketing expenditures over time in order to attract and convert consumers, retain users of our various products and services and sustain our growth.

Our ability to market our brands and businesses on any given property or channel is subject to the policies of the relevant third-party seller, publisher (including search engines, web browsers and social media platforms with extraordinarily high levels of traffic and numbers of users) or marketing affiliate. As a result, we cannot be certain that these parties will not limit or prohibit us or our affiliate marketing partners from purchasing certain types of advertising (including the purchase by us of advertising with preferential placement or for certain of our products and services) and/or using one or more current or prospective marketing channels in the future. If a significant marketing channel took such an action generally, for a significant period of time and/or on a recurring basis, our business, financial condition and results of operations could be adversely affected. In addition, if we fail to comply with the policies of third-party sellers, publishers and/or marketing affiliates, our advertisements could be removed without notice and/or our accounts could be suspended or terminated, any of which could adversely affect our business, financial condition and results of operations. In addition, any phasing out (or blocking) of third-party cookies by web browsers could adversely affect our business, financial condition and results of operations.

We rely heavily on free search engine marketing to drive traffic to our properties. The display, including rankings, of search results can be affected by a number of factors, many of which are not in our direct control, and may change frequently. Search engines have made changes in the past to their ranking algorithms, methodologies and design layouts that have reduced the prominence of links to websites offering our products and services, and negatively impacted traffic to such websites, and we expect that search engines will continue to make such changes from time to time in the future. However, we may not know how (or otherwise be in a position) to influence actions of this nature taken by search engines. With respect to search results in particular, even when search engines announce the details of their methodologies, their parameters may change from time to time, be poorly defined or be inconsistently interpreted.

Our failure to respond successfully to rapid and frequent changes in the operating and pricing dynamics of search engines, as well as changing policies and guidelines applicable to keyword advertising (which may be unilaterally updated by search engines without advance notice), could adversely affect our paid and free search engine marketing efforts. Specifically, such changes could adversely affect paid listings (both their placement and pricing), as well as the ranking of links to websites offering our products and services within search results, any or all of which could increase our marketing costs (particularly if free traffic is replaced with paid traffic) and adversely affect the effectiveness of our marketing efforts overall. In addition, the failure to respond successfully to policy updates with respect to the phasing out (or blocking) of third party cookies by web browsers (which may be done unilaterally by web browsers without notice), as well as consumers increasingly choosing to use browsers that do not support third party cookies, could also adversely affect the effectiveness of our marketing efforts at those of our businesses that rely on cookies as a meaningful part of their overall marketing strategy.

Moreover, changes in the usage and functioning of search engines as a result of the development of generative artificial intelligence technology (“GAI”) and/or general disruption to the technologies and platforms upon which our businesses rely to provide and market their digital content, products and services, could negatively impact our ability to drive traffic to our properties and monetize our digital content, products and services generally. GAI-powered chatbots and other tools could change the way people access and consume information, and if they supplant traffic to the websites of our businesses (in particular, the Digital business within our Dotdash Meredith financial reporting segment), we could experience decreased traffic and advertising revenues, which could adversely impact our business, financial condition and results of operations. In addition, GAI has the potential to generate digital content and information and develop digital products and services at a much greater scale and in a more cost-effective manner relative to traditional efforts, which could result in increased competition. The failure to adopt or otherwise adapt to evolving GAI capabilities could adversely affect our ability to compete generally, which could adversely affect our business, financial condition and results of operations.

~~Table of Contents~~

Lastly, certain of our businesses also enter into various arrangements with third parties (including advertising agencies) to drive traffic to their various brands and businesses and generate leads, which arrangements are generally more cost-effective than traditional marketing efforts. If these businesses are unable to renew existing (and enter into new) arrangements of this nature, sales and marketing costs as a percentage of revenue would increase over the long-term, which could adversely affect our business, financial condition and results of operations. In addition, in the case of traffic and leads generated through third party arrangements, the quality, validity (generated by real users with genuine interest and otherwise acquired in a manner that complies with contractual obligations in place with paid listings providers and/or advertisers) and convertibility of such traffic and leads are dependent on many factors, most of which are not in our control. If the quality, validity and/or convertibility of traffic and leads we acquire via third parties do not meet the expectations of the users of our various products and services, our paid listings providers and/or advertisers (as well any third parties who may acquire such traffic or leads from our paid listings providers and/or advertisers), our business, financial condition and results of operations could be adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

The Company did not issue or sell any shares of its common stock or any other equity securities pursuant to unregistered transactions during the quarter ended March 31, ~~2023.~~2024.

Issuer Purchases of Equity Securities

The ~~following table sets forth purchases by the~~ Company ofdid not purchase any shares of ~~IAC~~its common stock during the quarter ended March 31, ~~2023:~~

Period (a)
Total Number of Shares Purchased (b)
Average Price Paid Per Share
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
(d)
Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (2)
January 2023 — — — 6,934,494
February 2023 245,000 $ 52.08 245,000 6,689,494
March 2023 1,531,000 $ 51.01 1,531,000 5,158,494
Total 1,776,000 $ 51.16 1,776,000 5,158,494

~~_____________________~~

~~(1)~~ ~~Reflects repurchases~~2024. As of ~~IAC common stock made pursuant to the Company’s previously announced June 2020 repurchase authorization (the "Repurchase Authorization").~~

~~(2)~~ ~~Represents the total number of~~that date, 3,686,692 shares of IAC common stock that remained available for repurchase as of March 31, 2023 under the Repurchase Authorization. From April 1, 2023 through May 5, 2023, IAC repurchased an additional approximately 1.3 million shares of IAC common stock at an average price paid per share of $50.47 pursuant to the Repurchase Authorization. As of May 5, 2023, there were approximately 3.8 million shares of IAC common stock that remained available for repurchase under the ~~Repurchase Authorization.~~

~~IAC~~Company's previously announced June 2020 repurchase authorization. The Company may ~~purchase~~repurchase shares of ~~IAC~~its common stock pursuant to ~~the Repurchase Authorization~~this repurchase authorization over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors IAC management deems relevant at any particular time, including ~~without limitation,~~(without limitation) market conditions, share price and future outlook.

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Item 5. Other Information

Rule 10b5-1 Trading Plans

During the quarter ended March 31, 2024, none of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading plan or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S‑K).

Item 6. Exhibits

The documents set forth below, numbered in accordance with Item 601 of Regulation S-K, are filed herewith, incorporated by reference to the location indicated or furnished herewith.


Exhibit Number	Description	Location
3.1	Restated Certificate of Incorporation of IAC Inc.	Exhibit 3.1 to the Registrant's Annual ~~Repo~~rtReport on Form 10-K for the f ~~iscal~~fiscal year ended D ~~ecember~~December 31, 2022.
3.2	Restated Certificate of Incorporation of IAC/InterActiveCorp.	Exhibit 3.1(c) to the ~~Registrant~~’sRegistrant’s Current Report on Form 8-K filed on July 2, 2020.
3.3	Certificate of Amendment of Restated Certificate of Incorporation of IAC/InterActiveCorp.	Exhibit 4.2 to Post-Effective Amendment No. 1 on Form S-8 to Registration Statement on Form S-4 (File No. 333-251656), filed by the Re ~~gistrant~~ Registrant on May 26, 2021.
3.4	Certificate of Amendment of Restated Certificate of Incorporation of IAC Inc.	Exhibit 3.1 to the ~~Registrant'~~sRegistrant's Current Report on Form 8-K, filed on August 12, 2022.
3.5	Certificate of Designations of Series A Cumulative Preferred Stock.	Exhibit 3.2 to the ~~Registrant~~’sRegistrant’s Current Report on Form 8-K filed on July 2, 2020.
3.6	Amended and Restated By-Laws of IAC Inc.	Exhibit ~~3.2~~3.1 to the ~~Registrant'~~sRegistrant's Current Report on Form 8-K, filed on ~~August 12, 2022~~September 18, 2023..
10.1	~~Amendment No. 1 to Employment~~Joinder and Reaffirmation Agreement, dated as of March 1, ~~2023, between IAC~~2024, by and among Dotdash Meredith Inc. (f/k/a Dotdash Media Inc.), as Borrower, and ~~Mark Stein.~~JPMorgan Chase Bank, N.A., as administrative agent, and the other parties thereto.(1)~~(2)~~
~~10.2~~	~~Form of Notice and Terms and Conditions for 2023 Restricted Stock Unit Awards.(1)(2)~~
31.1	Certification of the Chairman and Senior Executive pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1)
31.2	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1)
31.3	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1)
32.1	Certification of the Chairman and Senior Executive pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.~~(3)~~(2)

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32.2	Certification of the Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.~~(3)~~(2)
32.3	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.~~(3)~~(2)
101.INS	Inline XBRL Instance.(1)	The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema.(1)
101.CAL	Inline XBRL Taxonomy Extension Calculation.(1)
101.DEF	Inline XBRL Taxonomy Extension Definition.(1)
101.LAB	Inline XBRL Taxonomy Extension Labels.(1)
101.PRE	Inline XBRL Taxonomy Extension Presentation.(1)
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

(1)Filed herewith.

(2)~~Reflects management contracts and management and director equity award agreements related to a management and director compensatory plan.~~

~~(3)~~Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:

May ~~9, 2023~~7, 2024

IAC INC.

By:

/s/ CHRISTOPHER HALPIN

Christopher Halpin

Executive Vice President, Chief Financial Officer and Chief Operating Officer



Signature	Title	Date
/s/ CHRISTOPHER HALPIN	Executive Vice President, Chief Financial Officer and Chief Operating Officer	May ~~9, 2023~~7, 2024
Christopher Halpin

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Balance at December 31, 2021	$	18,741	$	8	83,922	$	1	5,789	$	6,265,669	$	905,151	$	4,397	$	—	$	7,175,226	$	573,734	$	7,748,960
Net loss	(34)		—		—	—		—	—		(235,798)		—		—		(235,798)		(5,061)		(240,859)
Other comprehensive loss	—		—		—	—		—	—		—		(3,634)		—		(3,634)		(67)		(3,701)
Stock-based compensation expense	—		—		—	—		—	16,702		—		—		—		16,702		13,556		30,258
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—		—		153	—		—	(14,012)		—		—		—		(14,012)		—		(14,012)
Issuance of Angi Inc. common stock pursuant to stock-based awards, net of withholding taxes	—		—		—	—		—	(1,775)		—		2		—		(1,773)		(700)		(2,473)
Purchase of Angi Inc. treasury stock	—		—		—	—		—	(8,144)		—		—		—		(8,144)		—		(8,144)
Adjustment of noncontrolling interests to fair value	9,136		—		—	—		—	(9,136)		—		—		—		(9,136)		—		(9,136)
Other	(26)		—		—	—		—	24		—		—		—		24		—		24
Balance at March 31, 2022	$	27,817	$	8	84,075	$	1	5,789	$	6,249,328	$	669,353	$	765	$	—	$	6,919,455	$	581,462	$	7,500,917


	March 31, 2023						December 31, 2022
	Sales Commissions		App Store Fees		Total		Sales Commissions		App Store Fees		Total
	(In thousands)
Current	$	36,157	$	7,749	$	43,906	$	39,590	$	8,266	$	47,856
Non-current	6,086		—		6,086		5,667		—		5,667
Total	$	42,243	$	7,749	$	49,992	$	45,257	$	8,266	$	53,523


			Three Months Ended March 31, 2023
	Accrued December 31, 2022		Charges Incurred		Reversal of Initial Cost		Payments		Accrued March 31, 2023		Cumulative Charges Incurred		Estimated Remaining Costs
	(In thousands)
Digital	$	10,950	$	859	$	(812)	$	(4,793)	$	6,204	$	39,272	$	—
Print	12,055		1,109		(1,201)		(4,314)		7,649		33,340		87
Other (a)	4,389		186		(182)		(1,504)		2,889		7,585		91
Total	$	27,394	$	2,154	$	(2,195)	$	(10,611)	$	16,742	$	80,197	$	178


	Three Months Ended March 31, 2022
	Charges Incurred		Payments		Non-cash (b)		Accrued March 31, 2022
	(In thousands)
Digital	$	5,090	$	(394)	$	—	$	4,696
Print	15,625		(2,127)		(377)		13,121
Other (a)	1,722		(106)		—		1,616
Total	$	22,437	$	(2,627)	$	(377)	$	19,433


	March 31, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
Current portion of long-term debt	$	(30,000)	$	(27,750)	$	(30,000)	$	(26,700)
Long-term debt, net(a)	$	(2,013,107)	$	(1,791,469)	$	(2,019,759)	$	(1,708,413)


	Three Months Ended March 31, 2022
	Operating (Loss) Income(e)		Stock-based Compensation Expense		Depreciation		Amortization of Intangibles		Acquisition-related Contingent Consideration Fair Value Adjustments		Adjusted EBITDA(e)(f)
	(In thousands)
Dotdash Meredith
Digital	$	(1,868)	$	4,196	$	7,489	$	25,595	$	(612)	$	34,800
Print	(38,335)		$	64	$	5,532	$	22,259	$	—	$	(10,480)
Other(c)	(16,042)		$	12	$	244	$	—	$	—	$	(15,786)
Angi Inc.
Ads and Leads	15,486		$	4,920	$	11,257	$	2,662	$	—	$	34,325
Services	(25,750)		$	4,540	$	1,668	$	975	$	—	$	(18,567)
Roofing	(6,150)		$	830	$	127	$	167	$	—	$	(5,026)
Other(c)	(13,022)		$	2,572	$	—	$	—	$	—	$	(10,450)
International	(4,521)		$	123	$	947	$	—	$	—	$	(3,451)
Search	25,079		$	—	$	21	$	—	$	—	$	25,100
Emerging & Other	(5,044)		$	25	$	403	$	5,532	$	—	$	916
Corporate(h)	(38,647)		$	12,405	$	2,548	$	—	$	—	$	(23,694)
Total	(108,814)
Interest expense	(21,912)
Unrealized loss on investment in MGM Resorts International	(187,330)
Other income, net	6,699
Loss before income taxes	(311,357)
Income tax benefit	70,464
Net loss	(240,893)
Net loss attributable to noncontrolling interests	5,095
Net loss attributable to IAC shareholders	$	(235,798)


	Aggregate intrinsic value / fair value of awards outstanding		Estimated withholding taxes payable on vested shares and shares that will vest by March 31, 2024		Estimated withholding taxes payable on shares that will vest after March 31, 2024		Estimated IAC shares to be issued
	(In thousands)
IAC
Stock settled stock appreciation rights denominated in shares of certain non-publicly traded IAC subsidiaries other than Angi Inc. subsidiaries (a)	$	27,921	$	11,568	$	2,392	263
IAC denominated stock options (b)	108,721		54,360		—		1,024
IAC RSUs (c)	91,943		2,658		42,136		888
IAC restricted stock (d)	—		—		—		—
Total IAC outstanding employee stock-based awards	228,585		68,586		44,528		2,175

Angi Inc.
Angi Inc. RSUs	61,800		7,586		22,801
Angi Inc. stock appreciation rights	—		—		—		See footnote (f) below
Other Angi Inc. equity awards (a)(e)	46		23		—		See footnote (f) below
Total Angi Inc. outstanding employee stock-based awards	61,846		7,609		22,801
Total outstanding employee stock-based awards	$	290,431	$	76,195	$	67,329


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	(d) Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (2)
January 2023	—	—		—	6,934,494
February 2023	245,000	$	52.08	245,000	6,689,494
March 2023	1,531,000	$	51.01	1,531,000	5,158,494
Total	1,776,000	$	51.16	1,776,000	5,158,494