IAC Reports Better-Than-Expected Q2 2015 Results

Match.com
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We're halfway through 2015 and IAC has good news to share. The company's profit in Q2 2015 exceeded expectations, thanks in large part to the overwhelming success of the paid version of its mobile app Tinder.

Match Group, the star of the conglomerate, has driven consistently strong results for the last few quarters, and this one has been particularly momentous. IAC announced its intent to pursue an initial public offering of less than 20% of the common stock of the Match Group. The IPO is expected to be completed during the fourth quarter of 2015.

“The IPO positions The Match Group for continued success with an independent currency, and allows us to focus our attention and capital on growing the rest of IAC’s assets,” said IAC CEO Joey Levin in a statement.

The Match Group also announced plans to purchase PlentyOfFish for $575 million on July 14, 2015. The transaction is expected to close early in the fourth quarter of 2015.

The paid version of Tinder, launched in March, has garnered good responses from users, despite concerns from many that the model would fail.

"Monetization continues to perform at or above our expectations on key metrics like renewal, conversion and resubscription rates,” said Match Group Chairman Greg Blatt. “We’ve seen no discernible negative correlation between monetization and growth."

IAC reported that the number of paid subscribers for its dating services grew 18% to 4.1 million in the second quarter ended June 30. Revenue at Match Group, which accounts for about a third of total revenue, rose 19%.

Outside of IAC's dating businesses, the company has other successes to report. Within Search & Applications, Applications queries increased 8% driven by 20% B2C growth. B2C revenue increased 18% versus prior year. In the Media segment, Vimeo grew paid subscribers 25% to nearly 630,000. In the eCommerce segment, HomeAdvisor revenue grew 26%.

On the downside, Websites revenue decreased 20% due primarily to a decline in revenue at Ask.com and certain legacy businesses. Applications revenue decreased 2% due to lower revenue in B2B. Revenue in Media was down 1% versus last year, despite the strong growth at Vimeo. Operating income for the match Group in the current year period was negatively impacted by a $4.2 million year-over-year increase in amortization of intangibles.

All in all, revenue growth clocked in at 2% for a total of $771.1 million. IAC's net income was $59.3 million, or 68 cents per share, compared with a net loss of $18 million, or 22 cents per share.