IAC Reports Q4 2014 Results

Finances
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IAC released its Q4 2014 financial results at the beginning of February, reporting a 9% decline in profit for the fourth quarter from last year. Though revenue growth was in double digits, it was offset by higher expenses that ultimately led to the decline in profit. On the plus side, both revenue and adjusted earnings per share for the quarter beat analysts' estimates.

Here are some of the highlights from the report:

  • Consolidated revenue increased 15% to $830.75 million from $724.46 million in the prior year, driven by solid growth across all four segments.
  • Revenue for The Match Group increased 15% driven by the contributions from The Princeton Review and FriendScout24, and 4% growth in Dating paid subscribers to over 3.5 million globally.
  • Search & Applications revenue increased 9% driven by 22% Websites growth (due mainly to strong growth at About.com).
  • Vimeo grew revenue nearly 30% in the Media segment and surpassed 560,000 paid subscribers.
  • HomeAdvisor revenue grew more than 30% in the eCommerce segment with domestic service requests increasing 24%.
  • Consolidated Adjusted EBITDA increased 7% year-over-year in the fourth quarter driven by solid growth at Search & Applications and The Match Group.
  • Net Income and Adjusted Net Income in the fourth quarter both reflect a $4.9 million after-tax gain related to the sale of Urbanspoon, positively impacting both earnings per share and adjusted earnings per share by $0.05.
  • Total operating costs and expenses rose 18% from the year-ago period to $720.38 million.
  • IAC declared a quarterly cash dividend of $0.34 per share, payable on March 1, 2015 to IAC stockholders of record as of the close of business on February 15, 2015.
  • Revenue for the year grew 3% to $3.11 billion from $3.02 billion in the previous year.

Looking ahead to the first quarter of 2015, IAC forecasts EBITDA to decline slightly year over year. IAC also expects "some decline" in overall revenue for fiscal 2015, primarily due to Ask.com in Websites. However projected EBITDA is still more than $300 million.

To push the numbers in the right direction, IAC plans for a major increase in marketing spend in February and March this year. IAC also expects to see ad revenue from Tinder at some point in 2015, though an exact date for launch is not yet available.

Greg Blatt, Chairman of The Match Group, admits that last year was not the company's best, but adds confidently “We expect to have a good year” in 2015.

For more information on dating services owned by IAC you can read our DateHookup.com review and our Match.com review.