IAC Releases Q3 2015 Financial Results And More IPO Details

Finances
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IAC made major strides in the third quarter of 2015. Not only did earnings beat analyst expectations, the company also announced the $575 million acquisition of PlentyOfFish and plans to go public with an IPO.

IAC's third quarter financial results show a company that continues to dominate in its field. Highlights include:

  • IAC will continue its partnership with Google for four more years. Google will provide IAC and its network partners with sponsored listings and other search-related services.
  • The Match Group revenue increased 19%, or 25% excluding the effects of foreign exchange, to $274.2 million. The Match Group Adjusted EBITDA increased 37% versus Q3 2014.
  • Within Search & Applications, Applications queries and revenue increased 28% and 2%, respectively, the first quarter of revenue growth since Q3 2013.
  • In the Media segment, Vimeo grew paid subscribers 22% to over 650,000 with revenue increasing 27%.

Greg Blatt, Chairman of The Match Group, believes the company has plenty to look forward to. “We expect to complete our acquisition of PlentyOfFish this week,” he said in a prepared statement, “adding another of the leading global dating brands to our portfolio, at which point we will have over 59 million monthly active users and 4.7 million paying users. All in all, a solid quarter with lots of positive activity.”

Tinder is still one of the hottest topics in the dating world. The Tinder subscription business continued to perform well in Q3 2015. “We have been able to deliver optional paid features that a portion of our users highly value,” said Blatt, “while enhancing the vibrancy of the community through their introduction.” Though monetization is important for Tinder's success, the app focus primarily on growth initiatives going forward.

The other big news for The Match Group is the forthcoming IPO, which is expected to be completed during the fourth quarter of 2015. IAC will sell a 14 percent stake in Match Group, offering 33.3 million shares priced between $12 and $14 to the public. At the midpoint, Match Group will raise $433 million.

The IPO is not without its detractors. In an article for Forbes.com, Peter Cohan outlines four reasons the IPO isn't worthy of a right swipe from investors. He notes that the structure gives the public shares very little voting power, that the proceeds go to repaying the parent company's debt, that the valuation is far below what analysts expected, and that the underwriters are weak.

Multiple similar companies have pulled their IPOs in 2015, including online dating platform Zoosk. It will be interesting to see where The Match Group goes in the final quarter of 2015. For more information on IAC's flagship dating services, you can read our Match.com review and our Tinder review.