# People Inc (PPLI) FY 2024 MD&A Verbatim Item 7 Management's Discussion and Analysis from People Inc's 10-K for fiscal year 2024. SEC filing source: https://www.sec.gov/Archives/edgar/data/1800227/000180022725000013/iaci-20241231.htm Accession: 0001800227-25-000013 Filing date: 2025-02-28 Report date: 2024-12-31 Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Company profile: /company/PPLI/ All MD&A years: /company/PPLI/mda/ Previous year: /company/PPLI/mda/fy2023/ (FY 2023) Next year: /company/PPLI/mda/fy2025/ (FY 2025) Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations Proposed Angi Inc. Spin-off On January 13, 2025, IAC announced that its Board of Directors approved a plan to spin off its full stake in Angi Inc. (“Angi”) to IAC shareholders. The Company intends to effect the spin-off through a dividend to the holders of its common stock and Class B common stock of all of the common stock of Angi owned by the Company (the “Distribution”). Prior to the effective time of the Distribution, the Company intends to voluntarily convert all of the shares of Class B common stock of Angi that it owns to shares of Class A common stock of Angi. The completion of the Distribution remains subject to customary conditions and to the final approval of the Company's Board of Directors and may not be completed, on the anticipated terms or at all. The Company expects to complete the Distribution as soon as March 31, 2025. Defined Terms and Operating Metrics: Unless otherwise indicated or as the context otherwise requires, certain terms used in this annual report, which include the principal operating metrics we use in managing our business, are defined below: IAC Businesses (for additional information see “Note 9—Segment Information” to the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data”): •Dotdash Meredith - one of the largest digital and print publishers in America. Nearly 200 million people trust Dotdash Meredith each month to help them make decisions, take action, and find inspiration. Dotdash Meredith's over 40 iconic brands include People, Better Homes & Gardens, Verywell, FOOD & WINE, The Spruce, 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 - a publicly traded company that connects quality home professionals with consumers across more than 500 different categories, from repairing and remodeling homes to cleaning and landscaping. On November 1, 2023, Angi 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 did 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. Following the sale of Roofing, Angi has three operating segments: (i) Ads and Leads, (ii) Services and (iii) International (includes Europe and Canada). At December 31, 2024, the Company’s economic interest and voting interest in Angi were 85.3% and 98.3%, respectively; •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's offerings to enterprises, and HomePay; •Search - consists of Ask Media Group, a collection of websites providing general search services and information, and Desktop, which includes our business-to-business partnership operations and the remaining installed base of our legacy direct-to-consumer downloadable desktop applications; and •Emerging & Other - consists of: ◦Vivian Health, a platform to efficiently connect healthcare professionals with job opportunities; ◦Mosaic Group, a former developer and provider of global subscription mobile applications, for periods prior to the sale of its assets on February 15, 2024, which was accounted for as a sale of a business, for approximately $160 million; ◦Roofing, a provider of roof replacement and repair services, for periods prior to its sale on November 1, 2023; and ◦The Daily Beast, IAC Films and, for periods prior to its sale on November 9, 2022, Bluecrew. Dotdash Meredith •Digital Revenue - includes advertising revenue, performance marketing revenue and licensing and other revenue. 43 ◦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 and similar 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 use and distribution relationships, including utilization in large-language models and other artificial intelligence-related activities. •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 is 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: [[GREPCENT_TABLE]] [["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"]] [[/GREPCENT_TABLE]] Angi •Ads and Leads Revenue - primarily comprises domestic revenue from consumer connection revenue for consumer matches, revenue from professionals under contract for advertising and membership subscription revenue from professionals and consumers. •Services Revenue - primarily comprises domestic revenue from pre-priced offerings by which the consumer requests services through an Angi platform and Angi connects them with a professional to perform the service. •International Revenue - primarily 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 professionals. •Service Requests - are (i) fully completed and submitted domestic service requests for connections with Ads and Leads professionals, (ii) contacts to Ads and Leads professionals generated via the 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. •Monetized Transactions - are (i) Service Requests that are matched to a paying Ads and Leads 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 Professionals (“Transacting Pros” formerly known as Transacting Service Professionals or “Transacting SPs”) - are the number of (i) Ads and Leads professionals that paid for consumer matches or advertising and (ii) Services professionals that performed a Services job, during the most recent quarter. 44 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. 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, 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 for periods prior to its sale on November 1, 2023, hosting fees, credit card processing fees, payments made to independent third-party professionals who performed work contracted under Services arrangements that were entered into prior to January 1, 2023 and the change to net revenue reporting described below and payments made to care providers for Care For Business. •Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing expenditures, including fees paid to search engines, social media sites and other online marketing platforms, app platforms and partner-related payments to those who direct traffic to the brands within our Angi segment, offline marketing expenditures, which primarily consists of costs related to television, streaming and radio advertising within our Angi and Care.com segments, 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. •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, rent expense and facilities cost (including impairments of right-of-use assets or “ROU assets”), fees for professional services (including transaction-related costs related to the Distribution and acquisitions), provision for credit losses, software license and maintenance costs and acquisition-related contingent consideration fair value adjustments (described below). The customer service function at Angi and Care.com includes personnel who provide support to its 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, if applicable, are recognized during each reporting period in “General and administrative expense” in the statement of operations. Long-term debt (for additional information see “Note 6—Long-term Debt” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data”): •Dotdash Meredith Term Loan A - due December 1, 2026. At December 31, 2024 and 2023, the outstanding balance of Dotdash Meredith Term Loan A was $297.5 million and $315.0 million, respectively, and bore interest at an adjusted term secured overnight financing rate (“Adjusted Term SOFR”) plus 2.25%, or 6.94% and 7.69%, respectively. Dotdash Meredith Term Loan A has quarterly principal payments. •Dotdash Meredith Term Loan B-1 (replaced Dotdash Meredith Term Loan B) - due December 1, 2028. On November 26, 2024, Dotdash Meredith entered into Amendment No. 1 to the Dotdash Meredith Credit Agreement (the “Amended Dotdash Meredith Credit Agreement”), which governs both the existing Dotdash Meredith Term Loan A and the Dotdash Meredith Revolving Facility, and replaced $1.18 billion of then outstanding Dotdash Meredith Term Loan B principal with an equal amount of the Dotdash Meredith Term Loan B-1 (together with Dotdash Meredith Term Loan A, these loans are collectively referred to as “Dotdash Meredith Term Loans”). At December 31, 2024, the outstanding balance of Dotdash Meredith Term Loan B-1 was $1.18 billion and bore interest at Adjusted Term SOFR, subject to a minimum of 0.50%, plus 3.50%, or 8.05%. At December 31, 2023, the outstanding balance of Dotdash Meredith Term Loan B was $1.23 billion and bore interest at Adjusted Term SOFR, subject to a minimum of 0.50%, plus 4.00%, or 9.44%. Dotdash Meredith Term Loan B-1 has quarterly principal payments. 45 •Dotdash Meredith Revolving Facility - Dotdash Meredith's $150 million revolving credit facility expires on December 1, 2026. At December 31, 2024 and 2023, there were no outstanding borrowings under the Dotdash Meredith Revolving Facility. •ANGI Group Senior Notes - on August 20, 2020, ANGI Group, LLC (“ANGI Group”), a direct wholly-owned subsidiary of Angi, issued $500.0 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 required non-GAAP reconciliations. MANAGEMENT OVERVIEW For a more complete description of the Company's operating businesses, see “Description of IAC Businesses” included in “Item 1—Business.” 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). Sources of Revenue Dotdash Meredith Dotdash Meredith revenue consists of digital and print revenue. Digital revenue consists principally of advertising, performance marketing and licensing and other revenue. Print revenue consists principally of subscription, advertising, project and other, newsstand and performance marketing revenue. Digital Advertising revenue is generated primarily through digital advertisements sold by Dotdash Meredith's sales team directly to advertisers or through advertising agencies and programmatic advertising networks. Performance marketing revenue includes commissions generated through affiliate commerce, affinity marketing channels and performance marketing. Affiliate commerce commission revenue is generated when Dotdash Meredith's branded content refers consumers to commerce partner websites resulting in a purchase or transaction. Affinity marketing programs market and place magazine subscriptions online 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 and similar agreements. Print Subscription revenue relates to the sale of Dotdash Meredith's magazines, including digital editions. Most of Dotdash Meredith's subscription sales are prepaid at the time of order and may be canceled at any time for a refund of the pro rata portion of the initial subscription. Advertising revenue relates to the sale of advertising in magazines directly to advertisers or through advertising agencies. Revenue is recognized on the magazine issue’s on-sale date, which is the date the magazine is published. Project and other revenue include other revenue streams that are primarily project based and may relate to any one or combination of the following activities: audience targeted advertising, custom publishing, content strategy and development, email marketing, social media, database marketing and search engine optimization. Newsstand revenue is related to single copy magazines or bundles of single copy magazines sold to wholesalers for resale on newsstands. Publications sold to magazine wholesalers are sold with the right to receive credit from Dotdash Meredith for magazines returned to the wholesaler by retailers. Performance marketing revenue principally consists of affinity marketing revenue through which Dotdash Meredith places magazine subscriptions for third-party publishers. 46 Angi Ads and Leads revenue includes consumer connection revenue, which comprises fees paid by professionals for consumer matches (regardless of whether the professional ultimately provides the requested service), revenue from professionals under contract for advertising, membership subscription revenue from professionals and consumers and revenue from other services. Consumer connection revenue varies based upon several factors including the service requested, product experience offered, and geographic location of service. Services revenue primarily reflects domestic revenue from pre-priced offerings by which the consumer requests services through an Angi platform and Angi engages a professional to perform the service. International revenue primarily comprises consumer connection revenue for consumer matches and membership subscription revenue from professionals. From January 1, 2020 through December 31, 2022, Services recorded revenue on a gross basis. Effective January 1, 2023, Angi modified the Services terms and conditions so that the professional, rather than Angi, has the contractual relationship with the consumer to deliver the service and Angi's performance obligation to the consumer is to connect them with the professional. This change in contractual terms requires revenue to be reported as the net amount of what is received from the consumer after deducting the amounts owed to the professional providing the service effective for all arrangements entered into after December 31, 2022. There is no impact to operating loss or Adjusted EBITDA from this change in revenue recognition. For the year ended December 31, 2022, if Services revenue were recorded on a net basis, revenue would have been reduced by $242.6 million. Care.com Care.com consists of consumer and enterprise revenue. Consumer revenue is primarily generated through subscription fees from families and caregivers, both domestically and internationally, for Care.com's suite of products and services. Consumer also includes revenue generated through Care.com's comprehensive household payroll and tax support services (HomePay), as well as through contracts with businesses that advertise through Care.com's platform. Enterprise revenue is primarily generated through annual contracts with businesses (employers or re-sellers) that provide access to Care.com’s suite of products and services as an employee benefit. Fees from enterprise contracts include subscription revenue and backup care (including child, senior and pet) for employees. Search The Search segment consists of Ask Media Group and the Desktop business. Ask Media Group and Desktop revenue consist principally of advertising revenue, which is generated primarily through the display of paid listings in response to search queries. The majority of the paid listings displayed are supplied to us by Google Inc. (“Google”) pursuant to our services agreement with Google, dated as of October 26, 2015 and as subsequently amended (the “Services Agreement”), described in more detail in “Note 2—Summary of Significant Accounting Policies” to the financial statements included in “Item 8—Financial Statements and Supplementary Data.” Emerging & Other Included within Emerging & Other is Vivian Health and, prior to their sales on each of February 15, 2024 and November 1, 2023, respectively, Mosaic Group and Roofing. Vivian Health revenue consists of subscription and usage revenue, which is generated through recruiting agencies and other employers that seek access to qualified healthcare professionals. Mosaic Group revenue primarily consisted of fees paid by subscribers for downloadable mobile applications distributed through the Apple App Store and Google Play Store and fees received directly from consumers, as well as display advertisements. Roofing revenue primarily consisted of revenue from the roof replacement business offering by which the consumer purchased services directly from the Roofing business and Roofing then engaged a professional to perform the service. Revenue for the remaining businesses within Emerging & Other is generated primarily through subscriptions, media production and distribution and advertising. Services Agreement with Google On January 20, 2025, the Company entered into a further amendment to its Services Agreement (the “Amendment”), with the amended terms to be effective on April 1, 2025. Following the execution of the Amendment, the expiration date of the Services Agreement was extended from March 31, 2025 to March 31, 2026, with an automatic renewal for an additional one-year period absent a notice of non-renewal from either party on or before December 31, 2025. 47 Google has made changes to the policies under the Services Agreement and has also made industry-wide changes that 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 negatively impacted revenue and been costly to address (and could in the future), which have had and could have an adverse effect on our business, financial condition and results of operations. Further, changes to certain of the economic terms of the Services Agreement will become effective April 1, 2025 and the Company expects this could negatively impact Search revenue. See “Note 2—Summary of Significant Accounting Policies” to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information on the Services Agreement with Google. Dotdash Meredith Restructuring and Other Charges 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, which 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, 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, which was announced in the first quarter of 2022. These actions resulted in $80.2 million of restructuring charges incurred for the year ended December 31, 2022. For the year ended December 31, 2022, restructuring charges included impairment charges of $21.3 million related to the consolidation of certain leased spaces following the Meredith acquisition, consisting of impairments of $14.3 million and $7.0 million of an ROU asset and related leasehold improvements, furniture and equipment, respectively, which are included in “General and administrative expense” and “Depreciation,” respectively, in the statement of operations. Other Charges During the first quarter of 2023, due to the continued decline in the commercial real estate market, Dotdash Meredith recorded impairment charges of $70.0 million related to certain unoccupied leased office space consisting of impairments of $44.7 million and $25.3 million of an ROU asset and related leasehold improvements, furniture and equipment, respectively, which are included in “General and administrative expense” and “Depreciation,” respectively, in the statement of operations. See “Note 2—Summary of Significant Accounting Policies” and “Note 17—Dotdash Meredith Restructuring Charges, Transaction-Related Expenses and Change-in-Control Payments” to the financial statements included in “Item 8. Financial Statements and Supplementary Data” for additional information on impairment and restructuring charges, respectively. Distribution, Marketing and Advertiser Relationships We pay traffic acquisition costs, which consist of 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 fees paid to Apple and Google related to the distribution of apps and the facilitation of in-app purchases. We also pay to market and distribute our services on third-party distribution channels, such as Google and other search engines and social media websites such as Facebook. We also incur certain costs at Dotdash Meredith Print, including subscription acquisition costs, which represent commission payments to third-party agents to sell magazine subscriptions, and fulfillment and distribution costs, which represents costs to distribute magazines to subscribers and newsstands. In addition, some of our businesses manage affiliate programs, pursuant to which we pay commissions and fees to third parties based on revenue earned. These distribution channels might also offer their own services and products, as well as those of other third parties, which compete with those we offer. We market and offer our services and products to consumers through branded websites, allowing consumers to transact directly with us in a convenient manner. We have made, and expect to continue to make, substantial investments in online and offline advertising to build our brands and drive traffic to our websites and consumers and advertisers to our businesses. 48 Results of Operations for the Years Ended December 31, 2024, 2023 and 2022 The following discussion should be read in conjunction with “Item 8—Financial Statements and Supplementary Data.” Revenue [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Dotdash Meredith"],["Digital","$","1,004,417","","","$","892,426","","","$","931,482","","","$","111,991","","","13","%","","$","(39,056)","","","(4)%"],["Print","794,045","","","823,456","","","1,026,128","","","(29,411)","","","(4)","%","","(202,672)","","","(20)%"],["Intersegment eliminations","(21,233)","","","(20,989)","","","(22,911)","","","(244)","","","(1)","%","","1,922","","","8%"],["Total Dotdash Meredith","1,777,229","","","1,694,893","","","1,934,699","","","82,336","","","5","%","","(239,806)","","","(12)%"],["Angi"],["Domestic"],["Ads and Leads","962,601","","","1,124,908","","","1,282,061","","","(162,307)","","","(14)","%","","(157,153)","","","(12)%"],["Services","93,521","","","118,033","","","381,256","","","(24,512)","","","(21)","%","","(263,223)","","","(69)%"],["Total Domestic","1,056,122","","","1,242,941","","","1,663,317","","","(186,819)","","","(15)","%","","(420,376)","","","(25)%"],["International","128,990","","","115,807","","","101,038","","","13,183","","","11","%","","14,769","","","15%"],["Total Angi","1,185,112","","","1,358,748","","","1,764,355","","","(173,636)","","","(13)","%","","(405,607)","","","(23)%"],["Care.com","369,620","","","375,039","","","362,570","","","(5,419)","","","(1)","%","","12,469","","","3%"],["Search","387,699","","","629,038","","","731,431","","","(241,339)","","","(38)","%","","(102,393)","","","(14)%"],["Emerging & Other","89,028","","","320,018","","","460,895","","","(230,990)","","","(72)","%","","(140,877)","","","(31)%"],["Intersegment eliminations","(1,455)","","","(12,501)","","","(18,670)","","","11,046","","","88","%","","6,169","","","33%"],["Total","$","3,807,233","","","$","4,365,235","","","$","5,235,280","","","$","(558,002)","","","(13)","%","","$","(870,045)","","","(17)%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","Change","","% Change","","Change","","% Change"],["Operating metrics:"],["Dotdash Meredith"],["Digital"],["Total Sessions (in millions)","10,664","","","10,813","","","11,947","","","(149)","","","(1)","%","","(1,134)","","","(9)","%"],["Core Sessions (in millions)","9,062","","","8,370","","","8,186","","","692","","","8","%","","184","","","2","%"],["Angi"],["Service Requests (in thousands)","17,184","","","23,255","","","29,459","","","(6,071)","","","(26)","%","","(6,204)","","","(21)","%"],["Monetized Transactions (in thousands)","24,381","","","27,111","","","28,938","","","(2,730)","","","(10)","%","","(1,827)","","","(6)","%"],["Transacting Pros (in thousands)","168","","","196","","","220","","","(28)","","","(14)","%","","(24)","","","(11)","%"]] [[/GREPCENT_TABLE]] For the year ended December 31, 2024 compared to the year ended December 31, 2023 •Dotdash Meredith revenue increased 5% to $1.8 billion due to an increase of $112.0 million, or 13%, from Digital, partially offset by a decrease of $29.4 million, or 4%, from Print. 49 ◦The Digital increase was due primarily to increases of $82.9 million, or 15%, in Advertising Revenue, $16.2 million, or 16%, in Licensing and Other Revenue and $12.8 million, or 6%, in Performance Marketing Revenue. The increase in Advertising Revenue was driven primarily by an increase in premium advertising sold through the Dotdash Meredith sales team in the Technology, Home/Consumer Packaged Goods and Pharmaceuticals categories, as well as higher programmatic revenue as a result of an increase in programmatic rates and an 8% increase in Core Sessions. The increase in Licensing and Other Revenue was due primarily to the addition of the OpenAI partnership, which began in May 2024, and improved performance of content syndication partners including Apple News+, partially offset by a decrease in brand licensing revenue due to lower royalties. The increase in Performance Marketing Revenue was due primarily to an increase in affiliate commerce commission revenue, partially offset by a decrease in Performance Marketing revenue in the Finance and Food and Beverage categories. ◦The Print decrease was due primarily to decreases of $28.3 million, or 14%, in advertising revenue, $15.2 million, or 13%, in newsstand revenue and $10.3 million, or 23%, in performance marketing revenue, partially offset by an increase of $26.7 million, or 21%, in project and other revenue. The decreases in advertising revenue, newsstand revenue and performance marketing 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 of audience from print to digital platforms. The increase in project and other revenue was due primarily to higher revenue from a legacy agency business due to political advertising spend on third-party publisher platforms. •Angi revenue decreased 13% to $1.2 billion driven by decreases of $162.3 million, or 14%, from Ads and Leads and $24.5 million, or 21%, from Services, partially offset by an increase of $13.2 million, or 11% from International. ◦The Ads and Leads decrease was due primarily to decreases of $174.5 million, or 22%, in consumer connection revenue and $9.2 million, or 18%, in membership subscription revenue, partially offset by an increase of $21.5 million, or 7%, in advertising revenue. The decrease in consumer connection revenue was driven by ongoing user-experience enhancements as well as lower sales and marketing spend, resulting in both lower Service Requests and lower acquisition of new professionals. The decrease in membership subscription revenue was due primarily to a decrease in professionals in the Angi network. The increase in advertising revenue was primarily due to an increase in advertising sold through Angi's sales force. ◦The Services decrease was due primarily to fewer 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 contracts entered into prior to January 1, 2023 and recognized as gross revenue in the first quarter of 2023. Effective January 1, 2023, Angi modified the Services terms and conditions resulting in net revenue reporting. ◦The International increase was driven by a larger professional network and higher revenue per professional. •Care.com revenue decreased 1% to $369.6 million due primarily to a decrease of $19.2 million, or 9%, in consumer revenue, partially offset by an increase of $13.8 million, or 8%, in enterprise revenue. The decrease in consumer revenue was driven by lower subscriptions on the Care.com platform. The increase in enterprise revenue was primarily due to an increase in backup care usage. •Search revenue decreased 38% to $387.7 million due primarily to a decrease of $230.2 million, or 42%, from Ask Media Group resulting from a reduction in marketing from affiliate partners that drove fewer visitors to our ad supported search and content websites. •Emerging & Other revenue decreased 72% to $89.0 million due primarily to a decrease of $137.8 million in revenue ($17.8 million in 2024 compared to $155.7 million in 2023) from Mosaic Group, the assets of which were sold on February 15, 2024, the inclusion of $90.6 million in revenue from Roofing in the prior year period, which was sold on November 1, 2023 and a decrease of $8.0 million in revenue from IAC Films, partially offset by an increase of $6.0 million in revenue from The Daily Beast. For the year ended December 31, 2023 compared to the year ended December 31, 2022 •Dotdash Meredith revenue decreased 12% to $1.7 billion due primarily to decreases of $202.7 million, or 20%, from Print and $39.1 million, or 4%, from Digital. 50 ◦The decrease from Print was due to the planned reduction in circulation of certain publications and the discontinuation of others in the first quarter of 2022. ◦The decrease from Digital was due primarily to decreases of $60.9 million and $10.8 million, or 10% each, in Advertising Revenue and Licensing and Other Revenue, respectively, partially offset by an increase of $32.6 million, or 16% in Performance Marketing Revenue. The decrease in Advertising Revenue resulted primarily from lower programmatic revenue as a result of a 9% decline in Total Sessions and declines in premium advertising sold through the Dotdash Meredith sales team. Despite the increase in Core Sessions, Total Sessions was impacted by traffic declines in the first quarter of 2023 due to COVID-19 supported traffic levels in early 2022 and traffic declines in the second and third quarters of 2023 driven primarily by the Entertainment category and certain partner sites. The decrease in Licensing and Other Revenue was due primarily to lower royalties earned from retail partners. The increase in Performance Marketing Revenue was due primarily to an increase in affiliate commerce commission revenue, partially offset by a decrease in Performance Marketing revenue in the Finance and Health categories. •Angi revenue decreased 23% to $1.4 billion driven by decreases of $263.2 million, or 69%, from Services and $157.2 million, or 12%, from Ads and Leads, partially offset by an increase of $14.8 million, or 15%, from International. ◦The Services decrease was due primarily to the change to net revenue reporting described above under “Sources of Revenue - Angi” and a decrease of $92.4 million due primarily to the continued shift away from complex and less profitable offerings, and lower Service Requests as a result of certain efforts described in Ads and Leads below. ◦The Ads and Leads decrease was due primarily to decreases of $173.6 million, or 18%, in consumer connection revenue and $8.1 million, or 13%, in membership subscription revenue, partially offset by an increase of $25.3 million, or 10%, in advertising revenue. The decrease in consumer connection revenue was due primarily to declines in Monetized Transactions as a result of an effort to rationalize sales to professionals that are unprofitable as well as efforts to increase lead quality, including changes to certain demand channels, to enhance the user experience for both homeowners and professionals. The decrease in membership subscription revenue was due primarily to a decline in professionals in the Angi network. The increase in advertising revenue was due primarily to continued growth in sales and improved retention. ◦The International increase was driven by a larger professional network and higher revenue per professional. •Care.com revenue increased 3% to $375.0 million due to an increase of $19.7 million, or 14%, in enterprise revenue, partially offset by a decrease of $7.2 million, or 3%, in consumer revenue. The increase in enterprise revenue was primarily due to an increase in backup care usage. The decrease in consumer revenue was primarily due to lower subscriptions on the Care.com platform. •Search revenue decreased 14% to $629.0 million due to decreases of $81.1 million, or 13%, from Ask Media Group and $21.3 million, or 21%, from Desktop. The decrease from Ask Media Group was due to a reduction in marketing by affiliate partners driving fewer visitors to ad supported search and content websites. The decrease from Desktop was due primarily to certain Google policy changes and the subsequent discontinuation of new products effective March 2021. •Emerging & Other revenue decreased 31% to $320.0 million due primarily to the inclusion of Bluecrew in the prior year period, which was sold on November 9, 2022, a decrease at Roofing due to a decline in projects and a strategic shift in operations to select markets prior to its sale on November 1, 2023, and decreases in revenue at Mosaic Group and IAC Films, partially offset by growth of 40% at Vivian Health. 51 Cost of revenue (exclusive of depreciation shown separately below) [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Cost of revenue (exclusive of depreciation shown separately below)","$","1,059,990","","","$","1,343,254","","","$","1,933,705","","","$","(283,264)","","","(21)","%","","$","(590,451)","","","(31)","%"],["As a percentage of revenue","28%","","31%","","37%"]] [[/GREPCENT_TABLE]] For the year ended December 31, 2024 compared to the year ended December 31, 2023 Cost of revenue in 2024 decreased from 2023 due primarily to decreases of $168.5 million from Search, $102.6 million from Emerging & Other and $5.0 million from Angi, partially offset by an increase of $5.2 million from Dotdash Meredith. •The Search decrease was due primarily to a decrease in traffic acquisition costs of $166.1 million following a decrease in revenue and the proportion of revenue earned from affiliate partners who direct traffic to our websites. •The Emerging & Other decrease was due primarily to the inclusion in the prior year period of $61.5 million in expense from Roofing, which was sold on November 1, 2023, and a decrease in expense of $34.4 million from Mosaic Group, the assets of which were sold on February 15, 2024. •The Angi decrease was due primarily to a decrease of $9.3 million from Services, partially offset by an increase of $3.3 million from Ads and Leads. ◦The Services decrease was due primarily to decreases in payments to third-party professionals of $7.9 million primarily reflecting the residual impact from contracts entered into prior to January 1, 2023 and recognized as gross revenue in the first quarter of 2023 and credit card processing fees of $1.2 million. ◦The Ads and Leads increase was due primarily to higher hosting fees of $6.2 million attributable, in part, to the migration of data to a third-party computing platform, partially offset by a decrease in credit card processing fees of $2.9 million. •The Dotdash Meredith increase was due primarily to an increase of $31.7 million from Digital, partially offset by a decrease of $26.1 million from Print. ◦The Digital increase was due primarily to increases of $19.7 million in compensation expense, $7.5 million in traffic acquisition costs and $2.7 million in content costs. The increase in compensation expense was due primarily to an increase in headcount. The increase in traffic acquisition costs was due primarily to a new contractual relationship to increase programmatic rates. The increase in content costs was due primarily to an investment in video production. ◦The Print decrease was due primarily to a decrease of $48.3 million in production and distribution costs (postage, printing, paper and content) resulting from a planned reduction in the number of printed copies of certain publications and decreases in paper costs and freight surcharges, partially offset by increases of $17.9 million in third-party costs in connection with certain project-related revenue, including audience targeted advertising and $3.0 million in compensation expense due, in part, to $2.1 million in severance expense incurred in the fourth quarter of 2024 primarily related to headcount reductions intended to better align resources with strategic initiatives. For the year ended December 31, 2023 compared to the year ended December 31, 2022 52 Cost of revenue in 2023 decreased from 2022 due primarily to decreases of $274.8 million from Angi, $178.8 million from Dotdash Meredith, $110.4 million from Emerging & Other and $29.2 million from Search. •The Angi decrease was due to a decrease of $274.8 million from Services due primarily to a $248.8 million decrease in payments to third-party professional service providers due primarily to the change to net revenue reporting effective January 1, 2023, described above. Additionally, payments to third-party professional service providers decreased as a result of the shift away from complex and less profitable offerings. •The Dotdash Meredith decrease was due primarily to decreases of $112.2 million from Print and $67.0 million from Digital. ◦The decrease from Print was due primarily to decreases of $69.5 million in production and distribution costs (postage, paper, printing and content) due to the discontinuation of several publications in the first quarter of 2022 and the planned reduction in circulation of others. Print was further impacted by decreases of $24.2 million in compensation expense due to the voluntary retirement program in the first quarter of 2022 and the reduction in force described above under “Dotdash Meredith Restructuring and Other Charges” and $13.4 million in third-party advertising campaign fulfillment costs due to lower project-related revenue. ◦The decrease from Digital was due primarily to decreases of $35.9 million in traffic acquisition costs, $14.0 million in compensation expense and $13.9 million in content creation costs. The decreases in traffic acquisition costs and content creation costs were due primarily to lower revenue. The decrease in compensation expense was due primarily to lower headcount due to the aforementioned voluntary retirement program in the first quarter of 2022 and the reduction in force. •The Emerging & Other decrease was due primarily to the inclusion in the prior year period of $51.0 million in expense from Bluecrew, which was sold on November 9, 2022, a decrease in expense of $39.2 million from Roofing due primarily to a decline roofing materials and third-party contractor costs prior to its sale on November 1, 2023, and decreases of $11.6 million in production costs and third-party participation payments at IAC Films due primarily to Everything, Everywhere All at Once and $6.9 million in traffic acquisition costs at Mosaic Group. •The Search decrease was due primarily to a decrease in traffic acquisition costs of $28.0 million due primarily to a decrease in the proportion of revenue earned from affiliate partners who direct traffic to our websites. Selling and marketing expense [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Selling and marketing expense","$","1,338,732","","","$","1,576,229","","","$","1,914,878","","","$","(237,497)","","","(15)","%","","$","(338,649)","","","(18)%"],["As a percentage of revenue","35%","","36%","","37%"]] [[/GREPCENT_TABLE]] For the year ended December 31, 2024 compared to the year ended December 31, 2023 Selling and marketing expense in 2024 decreased from 2023 due primarily to decreases of $163.6 million from Angi, $70.0 million from Emerging & Other and $46.5 million from Search, partially offset by an increase of $41.0 million from Dotdash Meredith. •The Angi decrease was due primarily to a decrease of $169.0 million from Ads and Leads due primarily to decreases of $129.9 million in advertising expense and $34.1 million in compensation expense. The decrease in advertising expense was due primarily to improved marketing efficiencies, including optimizations to matching and online bidding that resulted in fewer Service Requests but increased Monetized Transactions per Service Request, and a decrease in offline media spend. The decrease in compensation expense was due primarily to a reduction in headcount. •The Emerging & Other decrease was due primarily to a decrease in expense of $50.2 million from Mosaic Group, the assets of which were sold on February 15, 2024, and the inclusion in the prior year period of $17.7 million in expense from Roofing, which was sold on November 1, 2023. 53 •The Search decrease was due primarily to decreases of $41.4 million in online marketing spend and $4.4 million in compensation expense. The decrease in online marketing was primarily due to the discontinuation of certain products and lower traffic volume. The decrease in compensation expense was due primarily to reductions in headcount. •The Dotdash Meredith increase was due primarily to increases of $29.9 million from Digital and $10.9 million from Print. ◦The Digital increase was due primarily to increases of $15.1 million in online marketing spend and $9.5 million in compensation expense. The increase in online marketing spend was due primarily to an increase in paid affiliate commerce. The increase in compensation expense was due primarily to increases in salary, commissions and employee benefits. ◦The Print increase was due primarily to increases of $8.6 million in subscription acquisition costs and $7.0 million in compensation expense. The increase in subscription acquisition costs resulted from an increase in the use of agents to source subscribers. The increase in compensation expense was due primarily to increases of $3.5 million in severance expense incurred in the fourth quarter of 2024 primarily related to headcount reductions intended to better align resources with strategic initiatives and $3.1 million in sales commissions resulting primarily from an increase in sales from a legacy agency business due to political advertising sold on third-party publisher platforms. For the year ended December 31, 2023 compared to the year ended December 31, 2022 Selling and marketing expense in 2023 decreased from 2022 due primarily to decreases of $125.1 million from Angi, $124.7 million from Dotdash Meredith, $59.7 million from Emerging & Other and $33.6 million from Search. •The Angi decrease was due primarily to decreases of $81.8 million from Ads and Leads, $34.8 million from Services and $5.8 million from International. ◦The Ads and Leads decrease was due primarily to a decrease of $82.0 million in advertising expense, following a decrease of $107.5 million in online marketing spend due to increased efficiency, partially offset by an increase of $25.3 million in television spend primarily due to efforts to build awareness of the Angi brand. ◦The Services decrease was due primarily to decreases of $20.4 million in consulting fees and outsourced personnel costs, $19.1 million in compensation expense and $7.1 million in advertising expense, partially offset by an increase of $14.9 million in service guarantee expense. The decreases in consulting fees and outsourced personnel costs were due to $12.7 million less phone-based sales wages primarily resulting from increased reliance on more profitable digital conversion channels and $6.1 million less due to streamlined fulfillment operations, partially offset by fewer complex services. The decrease in compensation expense was due primarily to lower headcount. The decrease in advertising expense was due primarily to a decrease of $4.7 million in professional marketing spend. The increase in service guarantee expense is due to the aforementioned change in contractual terms and conditions resulting in the change to net revenue reporting 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 International decrease was due primarily to a decrease of $10.2 million in advertising expense due primarily to decreases of $6.3 million and $4.2 million in online marketing spend and television spend, respectively, partially offset by an increase of $3.4 million in compensation expense due to higher headcount. •The Dotdash Meredith decrease was due primarily to a decrease of $121.7 million from Print due primarily to decreases of $78.9 million in subscription acquisition costs and $28.7 million in compensation expense. The decrease in subscription acquisition costs was driven by lower commission payments made to third-party agents that sell magazine subscriptions due to the planned reduction in the circulation of certain publications and the discontinuation of several publications in the first quarter of 2022. The decrease in compensation expense was due primarily to the voluntary retirement program in the first quarter of 2022 and the reduction in force described above under “Dotdash Meredith Restructuring and Other Charges.” 54 •The Emerging & Other decrease was due primarily to decreases of $21.9 million and $4.5 million in online marketing spend and television spend, respectively, at Mosaic Group, a decrease in expense of $15.4 million from Roofing due primarily to a decrease in compensation expense due to a reduction in headcount and a strategic shift in operations to select markets prior to its sale on November 1, 2023, the inclusion in the prior year period of $13.4 million in expense from Bluecrew, which was sold on November 9, 2022, and a decrease of $2.4 million in offline marketing spend at IAC Films. •The Search decrease was due primarily to a decrease of $32.6 million in online marketing spend. General and administrative expense [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["General and administrative expense","$","817,658","","","$","891,958","","","$","991,983","","","$","(74,300)","","","(8)","%","","$","(100,025)","","","(10)%"],["As a percentage of revenue","21%","","20%","","19%"]] [[/GREPCENT_TABLE]] For the year ended December 31, 2024 compared to the year ended December 31, 2023 General and administrative expense in 2024 decreased from 2023 due primarily to decreases of $42.6 million from Dotdash Meredith, $39.4 million from Angi and $24.9 million from Emerging & Other, partially offset by an increase of $30.3 million from Care.com. •The Dotdash Meredith decrease was due primarily to the inclusion in 2023 of an impairment charge of $44.7 million of an ROU asset related to unoccupied lease space at Other (unallocated corporate costs), as described above under “Dotdash Meredith Restructuring and Other Charges.” •The Angi decrease was due primarily to decreases of $31.7 million from Ads and Leads and $13.2 million from Services, partially offset by an increase of $3.0 million from International. ◦The Ads and Leads decrease was due primarily to decreases of $22.9 million in the provision for credit losses, $7.5 million in software license and maintenance costs and $3.8 million in third-party wages, partially offset by an increase in lease expense of $3.2 million. The decrease in the provision for credit losses was primarily due to lower revenue and improved collection rates. The decreases in software license and maintenance costs and third-party wages were due primarily to reduced costs related to customer support services. The increase in lease expense was primarily due to impairment charges of $6.8 million recognized in 2024 of ROU assets, partially offset by a gain on lease termination of $2.0 million in the second half of 2024 both related to Angi reducing its real estate footprint. ◦The Services decrease was due primarily to decreases of $9.2 million in compensation expense and $3.3 million in third-party wages. The decrease in compensation expense was due primarily to a reduction in headcount. The decrease in third-party wages was due primarily to reduced costs related to customer support services. ◦The International increase was due primarily to increases of $3.0 million in the provision for credit losses, $1.8 million in non-payroll taxes and $1.6 million in professional fees, partially offset by a decrease of $2.2 million in compensation expense. The increase in the provision for credit losses was due primarily to reduced collection rates and higher revenue. The increase in non-payroll taxes was primarily due to digital services tax. The increase in professional fees was due to an increase of $1.4 million in consulting costs. The decrease in compensation expense was due primarily to a reduction in headcount. •The Emerging & Other decrease was due primarily to the inclusion in the prior year period of $14.5 million of expense from Roofing, which was sold on November 1, 2023, a decrease in expense of $8.2 million from Mosaic Group, the assets of which were sold on February 15, 2024, and decreases of $4.4 million in compensation expense at Newco (IAC's former incubator company), due primarily to a reduction in headcount, and $3.0 million in consulting costs at IAC Films, partially offset by an increase of $8.1 million in legal fees. 55 •The Care.com increase was due primarily to an increase of $18.7 million related to the resolution of certain legal matters and an increase in compensation expense due, in part, to an increase in headcount. For the year ended December 31, 2023 compared to the year ended December 31, 2022 General and administrative expense in 2023 decreased from 2022 due primarily to decreases of $87.8 million from Angi, $21.0 million from Emerging & Other and $5.4 million from Dotdash Meredith, partially offset by increases of $12.5 million from Corporate and $3.0 million from Care.com. •The Angi decrease was due primarily to decreases of $69.9 million from Ads and Leads and $22.7 million from Services. ◦The Ads and Leads decrease was due primarily to decreases of $24.5 million in the provision of credit losses, $20.6 million in legal expense, $15.7 million in compensation expense and $6.0 million in outsourced personnel costs. The decrease in the provision for credit losses was due primarily to lower revenue and improved collection rates. The decrease in legal expense was due, in part, to a $10.9 million benefit in 2023 related to insurance coverage for previously incurred legal fees. The decreases in compensation expense and outsourced personnel costs were due primarily to lower headcount and a reduction in third-party providers, respectively. ◦The Services decrease was due primarily to decreases of $11.3 million in compensation expense, $9.5 million in legal expense and $4.8 million in the provision for credit losses. The decrease in compensation expense was due primarily to lower headcount. The decrease in the provision for credit losses was due primarily to lower revenue and improved collection rates. •The Emerging & Other decrease was due primarily to a decrease in expense of $12.5 million from Roofing due, in part, to a decrease in compensation expense resulting from a reduction in headcount prior to its sale on November 1, 2023, and the inclusion in the prior year period of $6.8 million in expense from Bluecrew, which was sold on November 9, 2022. •The Dotdash Meredith decrease was due primarily to the inclusion in 2022 of $28.1 million in restructuring costs related to activities described above under “Dotdash Meredith Restructuring and Other Charges” and the inclusion of $6.8 million in 2022 of transaction-related costs related to the 2021 acquisition of Meredith, a decrease in expense in 2023 of $8.0 million due to the reversal of certain pre-acquisition indemnification liabilities related to the 2021 Meredith acquisition and a decrease of $4.8 million in legal fees, partially offset by the inclusion in the first quarter of 2023 of $44.7 million related to an impairment charge of an ROU asset related to unoccupied lease space. •The Corporate increase was due primarily to an increase of $13.0 million in compensation expense. •The Care.com increase was due primarily to the inclusion in the prior year period of a $3.2 million gain related to the termination of a lease and $2.3 million in impairment charges related to ROU assets in 2023, partially offset by a decrease of $1.6 million in non-payroll related taxes primarily related to a sales tax refund received in 2023. Product development expense [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Product development expense","$","323,687","","","$","334,491","","","$","318,028","","","$","(10,804)","","","(3)%","","$","16,463","","","5%"],["As a percentage of revenue","9%","","8%","","6%"]] [[/GREPCENT_TABLE]] 56 For the year ended December 31, 2024 compared to the year ended December 31, 2023 Product development expense in 2024 decreased from 2023 due primarily to decreases of $12.1 million from Emerging & Other, $3.7 million from Care.com and $2.3 million from Search, partially offset by an increase of $8.4 million from Dotdash Meredith. •The Emerging & Other decrease was due primarily to decreases of $8.8 million in expense from Mosaic Group, the assets of which were sold on February 15, 2024, and $2.6 million in compensation expense at Vivian Health due primarily to a reduction in headcount. •The Care.com decrease was due primarily to a decrease of $5.1 million in outsourced personnel costs resulting from the completion of certain projects in 2023, partially offset by an increase of $1.6 million in consulting costs resulting from investment in a specific project in 2024. •The Search decrease was due primarily to a decrease in outsourced personnel costs of $1.9 million. •The Dotdash Meredith increase was due primarily to an increase of $9.1 million from Digital due primarily to an increase of $14.2 million in compensation expense, partially offset by decreases of $3.5 million in outsourced personnel costs and $2.4 million in software license and maintenance costs. The increase in compensation expense is due to an increase in headcount, which was partially offset by a reduction in outsourced personnel costs due to a reduction in the use of third-party contractors. The decrease in software license and maintenance costs was due primarily to a reduction in software contract renewals. For the year ended December 31, 2023 compared to the year ended December 31, 2022 Product development expense in 2023 increased from 2022 due primarily to an increase of $22.8 million from Angi, partially offset by decreases of $5.8 million from Emerging & Other and $2.0 million from Care.com. •The Angi increase was due primarily to an increase of $20.0 million from Ads and Leads due primarily to an increase of $21.8 million in compensation expense resulting from a decrease in capitalized projects in 2023 as compared to 2022. •The Emerging & Other decrease was due primarily to the inclusion in the prior year period of $8.8 million of expense at Bluecrew, which was sold on November 9, 2022 and decreases of $2.2 million and $1.2 million in compensation expense at Mosaic Group and Newco (IAC's former incubator company), respectively, due to reductions in headcount, partially offset by an increase of $4.7 million in compensation expense at Vivian Health. The increase in compensation expense at Vivian Health was due primarily to a $7.1 million increase in payroll-related expenses due to higher headcount, partially offset by a $2.4 million charge related to the sale of equity interests held by certain members of its management and the settlement of certain employee stock-based awards in conjunction with an equity raise in the second quarter of 2022. •The Care.com decrease was due primarily to a decrease of $2.7 million in outsourced personnel costs resulting from the completion of certain projects in 2022, partially offset by an increase of $1.2 million in software license and maintenance costs resulting from improvements to Care.com's online platform. Depreciation [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Depreciation","$","126,890","","","$","175,096","","","$","130,986","","","$","(48,206)","","","(28)","%","","$","44,110","","","34%"],["As a percentage of revenue","3%","","4%","","3%"]] [[/GREPCENT_TABLE]] 57 For the year ended December 31, 2024 compared to the year ended December 31, 2023 Depreciation in 2024 decreased from 2023 due primarily to decreases of $44.0 million at Dotdash Meredith and $7.6 million at Angi. The decrease at Dotdash Meredith was due primarily to the inclusion of an impairment charge of $25.3 million recognized in 2023 related to leasehold improvements and furniture and equipment resulting from unoccupied leased space, a $4.2 million write-off of certain leasehold improvements and furniture and equipment during 2023 and a decrease in expense related to the acceleration of depreciation on certain assets in 2023. The decrease at Angi was due primarily to the reduction in depreciation of capitalized software as a result of certain assets being fully depreciated, partially offset by the impairment of certain leasehold improvements and furniture and equipment in connection with the reduction of Angi's real estate footprint in 2024. For the year ended December 31, 2023 compared to the year ended December 31, 2022 Depreciation in 2023 increased from 2022 due primarily to increases of $28.9 million at Dotdash Meredith and $16.1 million at Angi. The increase at Dotdash Meredith was due primarily to an impairment of leasehold improvements and furniture and equipment of $25.3 million in the first quarter of 2023 related to unoccupied leased space and a $4.2 million write-off of certain leasehold improvements and furniture and equipment during the second quarter of 2023, partially offset by the inclusion of a $7.0 million impairment recorded in the third quarter of 2022 of leasehold improvements and furniture and equipment related to the consolidation of certain leased spaces, as described above under “Dotdash Meredith Restructuring and Other Charges.” The increase at Angi was due primarily to an increase in capitalized software projects placed in service and investments in capitalized software. Amortization of Intangibles [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Amortization of intangibles","$","144,506","","","$","295,970","","","$","307,718","","","$","(151,464)","","","(51)","%","","$","(11,748)","","","(4)%"],["As a percentage of revenue","4%","","7%","","6%"]] [[/GREPCENT_TABLE]] For the year ended December 31, 2024 compared to the year ended December 31, 2023 Amortization of intangibles in 2024 decreased from 2023 due primarily to decreases of $143.3 million at Dotdash Meredith and $5.4 million at Angi. The decrease at Dotdash Meredith was due primarily to the inclusion in 2023 of indefinite-lived intangible asset impairments totaling $87.5 million at the Dotdash Meredith Digital segment and certain intangible assets becoming fully amortized, partially offset by an increase of $8.3 million in expense as a result of a change in classification of certain Dotdash Meredith Digital trade name indefinite-lived intangible assets to definite-lived intangible assets, effective January 1, 2024. The decrease at Angi was due primarily to all definite-lived intangible assets becoming fully amortized, partially offset by an indefinite-lived intangible asset impairment of $2.6 million at the Angi Services segment in the fourth quarter of 2024. For the year ended December 31, 2023 compared to the year ended December 31, 2022 Amortization of intangibles in 2023 decreased from 2022 due primarily to decreases of $6.3 million at Care.com and $5.8 million at Angi, partially offset by an increase of $2.0 million at Dotdash Meredith. The decreases at both Care.com and Angi were due primarily to certain intangible assets becoming fully amortized. The increase at Dotdash Meredith was due primarily to $79.9 million and $7.6 million indefinite-lived intangible asset impairments at the Dotdash Meredith Digital segment in the fourth and third quarters of 2023, respectively, partially offset by higher expense in 2022 resulting from fair value adjustments recorded during the measurement period to identifiable intangible assets in connection with the completion of purchase accounting related to the 2021 acquisition of Meredith. See “Note 2—Summary of Significant Accounting Policies” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for further discussion of the Company’s assessment of impairment of indefinite-lived intangible assets. Goodwill Impairment 58 [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Goodwill Impairment","$","\u2014","","","$","9,000","","","$","112,753","","","$","(9,000)","","","NM","","$","(103,753)","","","(92)%"],["As a percentage of revenue","\u2014%","","0%","","2%"]] [[/GREPCENT_TABLE]] ________________________ NM = Not meaningful. For the years ended December 31, 2024, 2023 and 2022 There were no goodwill impairments recorded in 2024. The Company recorded a goodwill impairment in 2023 of $9.0 million at Mosaic Group as a result of the projected reduction in future revenue and profits from the business and lower trading multiples of a selected peer group of companies. The Company recorded goodwill impairments in 2022 of $86.7 million and $26.0 million at Mosaic Group and Roofing, respectively. The goodwill impairment at Mosaic Group was a result of the projected reduction in future revenue and profits from the business and lower trading multiples of a selected peer group of companies. The goodwill impairment at Roofing was due to the business exiting certain markets and the projected reduction in future profits. See “Note 2—Summary of Significant Accounting Policies” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for further discussion of the Company’s assessment of impairment of goodwill. 59 Operating income (loss) [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Dotdash Meredith"],["Digital","$","146,838","","","$","(16,656)","","","$","(66,629)","","","$","163,494","","","NM","","$","49,973","","","75","%"],["Print","24,588","","","(3,500)","","","(54,448)","","","28,088","","","NM","","50,948","","","94","%"],["Other","(64,552)","","","(130,582)","","","(67,014)","","","66,030","","","51","%","","(63,568)","","","(95)","%"],["Total Dotdash Meredith","106,874","","","(150,738)","","","(188,091)","","","257,612","","","NM","","37,353","","","20","%"],["Angi"],["Domestic"],["Ads and Leads","94,428","","","50,043","","","85,593","","","44,385","","","89","%","","(35,550)","","","(42)","%"],["Services","(19,440)","","","(23,450)","","","(95,166)","","","4,010","","","17","%","","71,716","","","75","%"],["Other","(64,845)","","","(61,377)","","","(61,794)","","","(3,468)","","","(6)","%","","417","","","1","%"],["Total Domestic","10,143","","","(34,784)","","","(71,367)","","","44,927","","","NM","","36,583","","","51","%"],["International","11,742","","","8,286","","","(4,253)","","","3,456","","","42","%","","12,539","","","NM"],["Total Angi","21,885","","","(26,498)","","","(75,620)","","","48,383","","","NM","","49,122","","","65","%"],["Care.com","33,744","","","45,204","","","31,189","","","(11,460)","","","(25)","%","","14,015","","","45","%"],["Search","17,406","","","44,198","","","83,398","","","(26,792)","","","(61)","%","","(39,200)","","","(47)","%"],["Emerging & Other","(37,695)","","","(26,441)","","","(188,028)","","","(11,254)","","","(43)","%","","161,587","","","86","%"],["Corporate","(146,444)","","","(146,488)","","","(137,619)","","","44","","","\u2014","%","","(8,869)","","","(6)","%"],["Total","$","(4,230)","","","$","(260,763)","","","$","(474,771)","","","$","256,533","","","98","%","","$","214,008","","","45","%"],["As a percentage of revenue","\u2014%","","(6)%","","(9)%"]] [[/GREPCENT_TABLE]] For the year ended December 31, 2024 compared to the year ended December 31, 2023 Operating loss decreased $256.5 million, or 98%, due primarily to a decrease of $151.5 million in amortization of intangibles, described above, an increase of $43.2 million in Adjusted EBITDA, described below, decreases of $48.2 million in depreciation and $9.0 million in goodwill impairment, both described above, and a decrease of $4.7 million in stock-based compensation expense. The decrease in stock-based compensation expense was due primarily to a reduction in headcount at Angi and an increase in awards being forfeited in the current year, partially offset by new awards granted in 2024. At December 31, 2024, there was $206.8 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, including Angi, which is expected to be recognized over a weighted average period of approximately 3.6 years. Included in the aforementioned unrecognized compensation costs at December 31, 2024 is $81.0 million of unrecognized compensation costs related to Mr. Levin's restricted stock award that was forfeited in January 2025 in connection with his Employment Transition Agreement. Excluding Mr. Levin's restricted stock award, there was $125.8 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 2.1 years. The amount of unrecognized compensation cost, net of estimated forfeitures, at December 31, 2024 related to Angi is $36.5 million. See “Note 10—Stock-Based Compensation” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for further discussion of Mr. Levin's restricted stock award. For the year ended December 31, 2023 compared to the year ended December 31, 2022 60 Operating loss decreased $214.0 million, or 45%, due primarily to an increase of $136.9 million in Adjusted EBITDA, described below, decreases of $103.8 million in goodwill impairments, $11.7 million in amortization of intangibles and $6.3 million in stock-based compensation expense, partially offset by an increase of $44.1 million in depreciation and income of $0.6 million in 2022 related to an acquisition-related contingent consideration fair value adjustment. For the decreases in goodwill impairments and amortization of intangibles and for the increase in depreciation refer to the discussions above. The decrease in stock-based compensation expense was due primarily to lower expense at Angi's Services segment due to a reduction in headcount as a result of the shift away from complex and less profitable offerings. Adjusted EBITDA [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Dotdash Meredith"],["Digital","$","289,393","","","$","242,969","","","$","186,696","","","$","46,424","","","19","%","","$","56,273","","","30","%"],["Print","53,793","","","64,226","","","31,135","","","(10,433)","","","(16)","%","","33,091","","","106","%"],["Other","(47,766)","","","(84,438)","","","(65,682)","","","36,672","","","43","%","","(18,756)","","","(29)","%"],["Total Dotdash Meredith","295,420","","","222,757","","","152,149","","","72,663","","","33","%","","70,608","","","46","%"],["Angi"],["Domestic"],["Ads and Leads","180,334","","","147,357","","","168,952","","","32,977","","","22","%","","(21,595)","","","(13)","%"],["Services","4,469","","","8,123","","","(52,126)","","","(3,654)","","","(45)","%","","60,249","","","NM"],["Other","(55,441)","","","(50,076)","","","(49,866)","","","(5,365)","","","(11)","%","","(210)","","","\u2014","%"],["Total Domestic","129,362","","","105,404","","","66,960","","","23,958","","","23","%","","38,444","","","57","%"],["International","15,953","","","13,074","","","(481)","","","2,879","","","22","%","","13,555","","","NM"],["Total Angi","145,315","","","118,478","","","66,479","","","26,837","","","23","%","","51,999","","","78","%"],["Care.com","45,181","","","56,205","","","46,899","","","(11,024)","","","(20)","%","","9,306","","","20","%"],["Search","17,510","","","44,283","","","83,486","","","(26,773)","","","(60)","%","","(39,203)","","","(47)","%"],["Emerging & Other","(35,995)","","","(14,366)","","","(69,942)","","","(21,629)","","","(151)","%","","55,576","","","79","%"],["Corporate","(87,742)","","","(90,873)","","","(79,521)","","","3,131","","","3","%","","(11,352)","","","(14)","%"],["Total","$","379,689","","","$","336,484","","","$","199,550","","","$","43,205","","","13","%","","$","136,934","","","69","%"],["As a percentage of revenue","10%","","8%","","4%"]] [[/GREPCENT_TABLE]] See “Principles of Financial Reporting” for the definition of Adjusted EBITDA and required non-GAAP reconciliations. For the year ended December 31, 2024 compared to the year ended December 31, 2023 •Dotdash Meredith Adjusted EBITDA increased 33% to $295.4 million due to an increase in Adjusted EBITDA of $46.4 million from Digital and a decrease in Adjusted EBITDA losses of $36.7 million from Other (unallocated corporate costs), partially offset by a decrease in Adjusted EBITDA of $10.4 million from Print. ◦The Digital Adjusted EBITDA increase was due primarily to higher revenue, partially offset by higher compensation expense and online marketing spend. The increase in compensation expense is due, in part, to $4.0 million in severance expense in the fourth quarter of 2024 primarily related to headcount reductions intended to better align resources with strategic initiatives. ◦The Other (unallocated corporate costs) Adjusted EBITDA loss 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 and the inclusion in the first quarter of 2024 of a $2.3 million gain recognized on the sale of an aircraft, partially offset by an increase in compensation expense and a decrease in expense in 2023 of $8.0 million due to the reversal of certain pre-acquisition indemnification liabilities related to the 2021 Meredith acquisition. The increase in compensation expense is due, in part, to $2.5 million in severance expense in the fourth quarter of 2024 primarily related to headcount reductions intended to better align resources with strategic initiatives. 61 ◦The Print Adjusted EBITDA decrease was due primarily to revenue declines and $6.4 million in severance expense in the fourth quarter of 2024 primarily related to headcount reductions intended to better align resources with strategic initiatives. •Angi Adjusted EBITDA increased 23% to $145.3 million due to an increase in Adjusted EBITDA of $33.0 million from Ads and Leads, partially offset by an increase in Adjusted EBITDA losses of $5.4 million from Other (corporate unallocated costs). ◦    The Ads and Leads Adjusted EBITDA increase was due primarily to lower selling and marketing expense due to improved marketing efficiency and lower general administrative expense due primarily to decreases in the provision for credit losses, software license and maintenance costs and third-party wages, partially offset by impairment charges of $6.8 million recognized in 2024 of ROU assets related to Angi reducing its real estate footprint. ◦    The Other (corporate unallocated costs) Adjusted EBITDA losses increase was due primarily to an increase in compensation expense. •Care.com Adjusted EBITDA decreased 20% to $45.2 million due primarily to an increase of $18.7 million related to the resolution of certain legal matters. •Search Adjusted EBITDA decreased 60% to $17.5 million due primarily to lower revenue, partially offset by lower traffic acquisition costs and selling and marketing expense. •Emerging & Other Adjusted EBITDA losses increased 151% to $36.0 million due primarily to $16.5 million in severance expense and transaction-related costs related to the sale of assets of Mosaic Group on February 15, 2024 and an increase of $8.1 million in legal fees, partially off by reduced losses at Newco (IAC's former incubator company), The Daily Beast and Vivian Health, and the inclusion in the prior year period of $2.9 million of losses from Roofing, which was sold on November 1, 2023. •Corporate Adjusted EBITDA loss decreased 3% to $87.7 million due primarily to a $10.0 million benefit in 2024 related to a favorable settlement of a legal matter, partially offset by $3.3 million of transaction-related costs related to the proposed Distribution. For the year ended December 31, 2023 compared to the year ended December 31, 2022 •Dotdash Meredith Adjusted EBITDA increased $70.6 million to $222.8 million due to increases in Adjusted EBITDA of $56.3 million and $33.1 million from Digital and Print, respectively, partially offset by an increase in Adjusted EBITDA losses of $18.8 million from Other (unallocated corporate costs). ◦The Digital Adjusted EBITDA increase was due primarily to decreases in traffic acquisition costs, compensation expense and the inclusion in 2022 of $33.3 million of restructuring charges and transaction-related expenses, including a $14.3 million impairment of an ROU asset related to the consolidation of certain leased spaces following the Meredith acquisition. ◦The Print Adjusted EBITDA increase was due primarily to the inclusion in 2022 of $34.8 million of restructuring charges and transaction-related expenses. ◦The Other (unallocated corporate costs) Adjusted EBITDA loss increase was due primarily to an impairment charge of $44.7 million of an ROU asset related to unoccupied lease space recognized in the first quarter of 2023, partially offset by the inclusion in 2022 of $12.3 million of restructuring charges and transaction-related expenses and a decrease in expense in 2023 of $8.0 million due to the reversal of certain pre-acquisition indemnification liabilities related to the 2021 Meredith acquisition. See “Note 2—Summary of Significant Accounting Policies” and “Note 17—Dotdash Meredith Restructuring Charges, Transaction-Related Expenses and Change-In-Control Payments” to the financial statements included in “Item 8. Financial Statements and Supplementary Data” for additional information on impairment and restructuring charges, respectively. 62 •Angi Adjusted EBITDA increased $52.0 million to $118.5 million due primarily to increases in Adjusted EBITDA of $60.2 million and $13.6 million from Services and International, respectively, partially offset by a decrease in Adjusted EBITDA of $21.6 million from Ads and Leads. ◦The Services Adjusted EBITDA 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 a shift away from complex and less profitable offerings. ◦The International Adjusted EBITDA increase was due primarily to an increase in revenue and lower selling and marketing expense due to more efficient marketing spend. ◦The Ads and Leads Adjusted EBITDA decrease was due primarily to lower revenue, partially offset by lower general and administrative expense due to a decrease in the provision for credit losses, a decrease in legal expense due, in part, to a $10.9 million benefit in 2023 related to insurance coverage for previously incurred legal fees, and a decrease in compensation expense and lower selling and marketing expense due to improved marketing efficiency. •Care.com Adjusted EBITDA increased $9.3 million to $56.2 million due primarily to higher revenue and lower product development expense resulting from lower outsourced personnel costs and software license and maintenance expense, partially offset by an increase in general administrative expense due primarily to the inclusion in the prior year period of a $3.2 million gain related to the termination of a lease and $2.3 million in impairment charges related to ROU assets in 2023, partially offset by a decrease of $1.6 million in non-payroll related taxes related to a sales tax refund received in 2023. •Search Adjusted EBITDA decreased 47% to $44.3 million due primarily to lower revenue resulting from a reduction in marketing by affiliate partners driving fewer visitors to ad supported search and content websites and the wind-down of the B2C business. •Emerging & Other Adjusted EBITDA loss decreased $55.6 million to a loss of $14.4 million due primarily to the sale of Bluecrew, which had Adjusted EBITDA losses of $23.1 million in the prior year period, reduced losses of $18.5 million at Roofing due primarily to a strategic shift of operations to select markets prior to its sale on November 1, 2023, higher profits at Mosaic Group, the inclusion in the second quarter of 2022 of a $9.8 million charge at Vivian Health related to the sale of equity interests held by certain members of its management and the settlement of certain employee stock-based awards in conjunction with an equity raise in the second quarter of 2022 and lower losses at Newco (IAC's former incubator company). •Corporate Adjusted EBITDA loss increased $11.4 million to $90.9 million due primarily to increased compensation expense. Interest expense [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Interest expense","$","155,888","","","$","157,632","","","$","110,165","","","$","(1,744)","","","(1)","%","","$","47,467","","","43%"]] [[/GREPCENT_TABLE]] For the year ended December 31, 2024 compared to the year ended December 31, 2023 Interest expense in 2024 decreased from 2023 due primarily to a decrease in the amount of debt outstanding under the Dotdash Meredith Term Loans. For the year ended December 31, 2023 compared to the year ended December 31, 2022 Interest expense in 2023 increased from 2022 due primarily to an increase in average interest rates on the Dotdash Meredith Term Loans. Unrealized (loss) gain on investment in MGM Resorts International (“MGM”) 63 [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Unrealized (loss) gain on investment in MGM Resorts International","$","(649,178)","","","$","721,668","","","$","(723,515)","","","$","(1,370,846)","","","NM","","$","1,445,183","","","NM"]] [[/GREPCENT_TABLE]] In the fourth quarter of 2023, MGM's ongoing share repurchase program passively increased the Company's ownership interest in MGM and the Company determined that the equity method of accounting applied and elected to account for its investment in MGM pursuant to the fair value option. Prior to the fourth quarter of 2023, the Company's investment in MGM was accounted for as an equity security with a readily determinable fair value, with changes in fair value recognized through income each period. Since the Company has always marked its investment in MGM to fair value through income each period, the election of the fair value option resulted in no change to the accounting for its investment in MGM. The unrealized pre-tax (losses) and gains from the Company's investment in MGM were due to changes in the stock price of MGM's common stock as reported on the New York Stock Exchange. Based on the number of MGM common shares outstanding at December 31, 2024, the Company owns approximately 22.0% of MGM. Other income (expense), net [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022"],["","(Dollars in thousands)"],["Interest income","$","86,495","","","$","71,114","","","$","24,916"],["Unrealized increase (decrease) in the estimated fair value of a warrant","20,393","","","2,832","","","(62,495)"],["Net realized gain (loss) on sales of businesses and investments and (downward) upward adjustments to the carrying value of equity securities without readily determinable fair values(a)(b)(c)","10,373","","","(19,201)","","","59,299"],["Net periodic pension benefit credit (costs), other than the service cost component(d)","5,656","","","139","","","(206,422)"],["Unrealized gain (loss) related to marketable equity securities","121","","","(145)","","","(20,342)"],["Dotdash Meredith Credit Agreement amendment fees(e)","(3,453)","","","\u2014","","","\u2014"],["Foreign exchange (losses) gains, net","(2,588)","","","1,528","","","(8,503)"],["Other","(100)","","","7,595","","","(4,238)"],["Other income (expense), net","$","116,897","","","$","63,862","","","$","(217,785)"],["$ Change","$","53,035","","","$","281,647"],["% Change","83","%","","NM"]] [[/GREPCENT_TABLE]] _____________________ (a)    Includes downward and upward adjustments to the carrying value of equity securities without readily determinable fair values. For the years ended December 31, 2024, 2023 and 2022, the Company recorded net downward adjustments of $32.3 million, $20.2 million and $89.1 million, respectively. (b)    Includes a pre-tax gain of $29.2 million on the sale of assets of Mosaic Group, which was included within Emerging & Other, and was accounted for as a sale of a business, in the year ended December 31, 2024. (c) Includes a gain of approximately $132.2 million on the sale of Bluecrew in the year ended December 31, 2022. On November 9, 2022, the Company completed the sale of Bluecrew, which was included within Emerging & Other, to EmployBridge, a provider of light industrial staffing solutions, for cash and stock with the Company becoming a minority shareholder in the combined company. (d)    Includes pre-tax actuarial gains (losses) of $6.0 million, $1.7 million and $(213.4) million for the years ended December 31, 2024, 2023 and 2022, respectively, related to the pension plans in the U.S and U.K. See “Note 11—Pension and Post-Retirement Benefit Plans” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information. (e)     Relates to third-party fees in connection with the Amended Dotdash Meredith Credit Agreement entered into on November 26, 2024. See “Note 6—Long-term debt” for additional information. 64 Income tax benefit (provision) [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Income tax benefit (provision)","$","159,069","","","$","(108,818)","","","$","331,087","","","$","267,887","","","NM","","$","(439,905)","","","NM"],["Effective income tax rate","23%","","30%","","22%"]] [[/GREPCENT_TABLE]] For further details of income tax matters, see “Note 12—Income Taxes” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data.” In 2024, the effective income tax rate is higher than the statutory rate of 21% due primarily to the valuation allowance release for foreign net operating losses (as described below), state taxes, research credits and the realization of capital losses, partially offset by the nondeductible portion of goodwill in the sale of Mosaic Group and nondeductible compensation expense. Following the purchase of the remaining noncontrolling interests of a foreign subsidiary, we reorganized the related business operations, which resulted in the release of a valuation allowance for foreign net operating losses in the amount of $31.1 million as a discrete item in the third quarter, because we are now forecasting the utilization of the net operating losses within the foreseeable future. In 2023, the effective income tax rate is higher than the statutory rate of 21% due primarily to state taxes and nondeductible compensation expense, partially offset by research credits. In 2022, the effective income tax rate is higher than the statutory rate of 21% due primarily to state taxes and research credits, partially offset by the non-deductible portion of the Mosaic Group goodwill impairment charge. Net (earnings) loss attributable to noncontrolling interests [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022","","2024 Change","","2023 Change"],["","","","","","","","$ Change","","% Change","","$ Change","","% Change"],["","(Dollars in thousands)"],["Net (earnings) loss attributable to noncontrolling interests","$","(6,567)","","","$","7,625","","","$","22,285","","","$","(14,192)","","","NM","","$","(14,660)","","","(66)%"]] [[/GREPCENT_TABLE]] Net (earnings) loss attributable to noncontrolling interests in 2024, 2023 and 2022 primarily represents the publicly-held interest in Angi's earnings and losses. Net loss attributable to noncontrolling interests in 2022 also included noncontrolling interest in a subsidiary that primarily held investments in equity securities. The subsidiary recorded net unrealized losses in 2022. 65 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 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, 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. 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. Depreciation is a non-cash expense relating to our buildings, capitalized software, equipment 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, customer lists and user base, and professional 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 upon the financial performance and/or operating targets of the acquired company at fair 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. 66 The following tables reconcile operating income (loss) to Adjusted EBITDA for the Company's reportable segments and net (loss) earnings attributable to IAC shareholders: [[GREPCENT_TABLE]] [["","Year Ended December 31, 2024"],["","Operating Income (Loss)","","Stock-Based Compensation Expense","","Depreciation","","Amortization of Intangibles","","","","","","Adjusted EBITDA"],["","(In thousands)"],["Dotdash Meredith"],["Digital","$","146,838","","","$","10,097","","","$","15,916","","","$","116,542","","","","","","","$","289,393"],["Print","24,588","","","2,045","","","7,285","","","19,875","","","","","","","53,793"],["Other(a)","(64,552)","","","13,683","","","3,103","","","\u2014","","","","","","","(47,766)"],["Total Dotdash Meredith","106,874","","","25,825","","","26,304","","","136,417","","","","","","","295,420"],["Angi"],["Ads and Leads","94,428","","","20,415","","","65,491","","","\u2014","","","","","","","180,334"],["Services","(19,440)","","","3,835","","","17,474","","","2,600","","","","","","","4,469"],["Other(a)","(64,845)","","","9,404","","","\u2014","","","\u2014","","","","","","","(55,441)"],["International","11,742","","","1,124","","","3,087","","","\u2014","","","","","","","15,953"],["Total Angi","21,885","","","34,778","","","86,052","","","2,600","","","","","","","145,315"],["Care.com","33,744","","","\u2014","","","5,957","","","5,480","","","","","","","45,181"],["Search","17,406","","","\u2014","","","104","","","\u2014","","","","","","","17,510"],["Emerging & Other","(37,695)","","","1,626","","","65","","","9","","","","","","","(35,995)"],["Corporate(b)","(146,444)","","","50,294","","","8,408","","","\u2014","","","","","","","(87,742)"],["Total","(4,230)","","","$","112,523","","","$","126,890","","","$","144,506","","","","","","","$","379,689"],["Interest expense","(155,888)"],["Unrealized loss on investment in MGM Resorts International","(649,178)"],["Other income, net","116,897"],["Loss before income taxes","(692,399)"],["Income tax benefit","159,069"],["Net loss","(533,330)"],["Net earnings attributable to noncontrolling interests","(6,567)"],["Net loss attributable to IAC shareholders","$","(539,897)"]] [[/GREPCENT_TABLE]] _____________________ (a)    Other comprises unallocated corporate expenses. (b)     Includes stock-based compensation expense for stock-based awards granted to employees of Corporate, Care.com, Search and all Emerging & Other businesses other than Vivian Health for the years ended December 31, 2024, 2023 and 2022. The years ended December 31, 2023 and 2022 also exclude stock-based compensation granted to employees of Roofing within Emerging & Other, which was sold on November 1, 2023. 67 [[GREPCENT_TABLE]] [["","Year Ended December 31, 2023"],["","Operating (Loss) Income","","Stock-Based Compensation Expense","","Depreciation","","Amortization of Intangibles","","","","Goodwill Impairment","","Adjusted EBITDA"],["","(In thousands)"],["Dotdash Meredith"],["Digital","$","(16,656)","","","$","8,159","","","$","24,772","","","$","226,694","","","","","$","\u2014","","","$","242,969"],["Print","(3,500)","","","1,381","","","13,302","","","53,043","","","","","\u2014","","","64,226"],["Other(a)(c)","(130,582)","","","13,961","","","32,183","","","\u2014","","","","","\u2014","","","(84,438)"],["Total Dotdash Meredith","(150,738)","","","23,501","","","70,257","","","279,737","","","","","\u2014","","","222,757"],["Angi"],["Ads and Leads","50,043","","","23,145","","","66,211","","","7,958","","","","","\u2014","","","147,357"],["Services","(23,450)","","","7,586","","","23,987","","","\u2014","","","","","\u2014","","","8,123"],["Other(a)","(61,377)","","","11,301","","","\u2014","","","\u2014","","","","","\u2014","","","(50,076)"],["International","8,286","","","1,382","","","3,406","","","\u2014","","","","","\u2014","","","13,074"],["Total Angi","(26,498)","","","43,414","","","93,604","","","7,958","","","","","\u2014","","","118,478"],["Care.com","45,204","","","\u2014","","","3,238","","","7,763","","","","","\u2014","","","56,205"],["Search","44,198","","","\u2014","","","85","","","\u2014","","","","","\u2014","","","44,283"],["Emerging & Other","(26,441)","","","1,805","","","758","","","512","","","","","9,000","","","(14,366)"],["Corporate(b)","(146,488)","","","48,461","","","7,154","","","\u2014","","","","","\u2014","","","(90,873)"],["Total","(260,763)","","","$","117,181","","","$","175,096","","","$","295,970","","","","","$","9,000","","","$","336,484"],["Interest expense","(157,632)"],["Unrealized gain on investment in MGM Resorts International","721,668"],["Other income, net","63,862"],["Earnings before income taxes","367,135"],["Income tax provision","(108,818)"],["Net earnings","258,317"],["Net loss attributable to noncontrolling interests","7,625"],["Net earnings attributable to IAC shareholders","$","265,942"]] [[/GREPCENT_TABLE]] _____________________ (c)    Operating loss includes impairment charges of $70.0 million related to unoccupied leased office space and write-offs of certain leasehold improvements and furniture and equipment of $4.2 million, of which $29.6 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 $44.7 million. See “Note 2—Summary of Significant Accounting Policies” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information on the impairment charges. 68 [[GREPCENT_TABLE]] [["","Year Ended December 31, 2022"],["","Operating (Loss) Income","","Stock-Based Compensation Expense","","Depreciation","","Amortization of Intangibles","","Acquisition-related Contingent Consideration Fair Value Adjustments","","Goodwill Impairment","","Adjusted EBITDA"],["","(In thousands)"],["Dotdash Meredith"],["Digital(d)","$","(66,629)","","","$","20,596","","","$","27,569","","","$","205,772","","","$","(612)","","","$","\u2014","","","$","186,696"],["Print(e)","(54,448)","","","1,023","","","12,620","","","71,940","","","\u2014","","","\u2014","","","31,135"],["Other(a)(f)","(67,014)","","","136","","","1,196","","","\u2014","","","\u2014","","","\u2014","","","(65,682)"],["Total Dotdash Meredith","(188,091)","","","21,755","","","41,385","","","277,712","","","(612)","","","\u2014","","","152,149"],["Angi"],["Ads and Leads","85,593","","","19,972","","","52,737","","","10,650","","","\u2014","","","\u2014","","","168,952"],["Services","(95,166)","","","18,012","","","21,904","","","3,124","","","\u2014","","","\u2014","","","(52,126)"],["Other(a)","(61,794)","","","11,928","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","(49,866)"],["International","(4,253)","","","890","","","2,882","","","\u2014","","","\u2014","","","\u2014","","","(481)"],["Total Angi","(75,620)","","","50,802","","","77,523","","","13,774","","","\u2014","","","\u2014","","","66,479"],["Care.com","31,189","","","\u2014","","","1,609","","","14,101","","","\u2014","","","\u2014","","","46,899"],["Search","83,398","","","\u2014","","","88","","","\u2014","","","\u2014","","","\u2014","","","83,486"],["Emerging & Other","(188,028)","","","2,373","","","829","","","2,131","","","\u2014","","","112,753","","","(69,942)"],["Corporate(b)","(137,619)","","","48,546","","","9,552","","","\u2014","","","\u2014","","","\u2014","","","(79,521)"],["Total","(474,771)","","","$","123,476","","","$","130,986","","","$","307,718","","","$","(612)","","","$","112,753","","","$","199,550"],["Interest expense","(110,165)"],["Unrealized loss on investment in MGM Resorts International","(723,515)"],["Other expense, net","(217,785)"],["Loss from continuing operations before income taxes","(1,526,236)"],["Income tax benefit","331,087"],["Net loss from continuing operations","(1,195,149)"],["Earnings from discontinued operations, net of tax","2,694"],["Net loss","(1,192,455)"],["Net loss attributable to noncontrolling interests","22,285"],["Net loss attributable to IAC shareholders","$","(1,170,170)"]] [[/GREPCENT_TABLE]] _____________________ (d)    Operating loss includes $39.2 million of restructuring charges, of which a $7.0 million impairment charge is presented in “Depreciation” in the statement of operations and, therefore, is excluded from Adjusted EBITDA. Restructuring charges included in Adjusted EBITDA are $32.2 million. Operating loss also includes transaction-related expenses in connection with the 2021 acquisition of Meredith of $1.1 million. See “Note 2—Summary of Significant Accounting Policies” and “Note 17—Dotdash Meredith Restructuring Charges, Transaction-Related Expenses and Change-in-Control Payments” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information on impairment and restructuring charges, respectively. (e)    Operating loss includes $33.4 million of restructuring charges and $1.4 million of transaction-related expenses in connection with the 2021 acquisition of Meredith. See “Note 17—Dotdash Meredith Restructuring Charges, Transaction-Related Expenses and Change-in-Control Payments” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information. (f)    Operating loss includes restructuring charges of $7.6 million and transaction-related expenses in connection with the 2021 acquisition of Meredith of $4.7 million. See “Note 17—Dotdash Meredith Restructuring Charges, Transaction-Related Expenses and Change-in-Control Payments” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information. 69 FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES Financial Position [[GREPCENT_TABLE]] [["","December 31,"],["","2024","","2023"],["","(In thousands)"],["Angi cash and cash equivalents:"],["United States","$","411,298","","","$","354,341"],["All other countries","5,136","","","9,703"],["Total Angi cash and cash equivalents","416,434","","","364,044"],["Dotdash Meredith cash and cash equivalents:"],["United States","230,436","","","243,801"],["All other countries","19,491","","","17,779"],["Total Dotdash Meredith cash and cash equivalents","249,927","","","261,580"],["IAC (excluding Angi and Dotdash Meredith) cash and cash equivalents and marketable securities:"],["United States","1,093,675","","","642,613"],["All other countries","38,134","","","29,208"],["Total cash and cash equivalents","1,131,809","","","671,821"],["Marketable securities (United States)","\u2014","","","148,998"],["Total IAC (excluding Angi and Dotdash Meredith) cash and cash equivalents and marketable securities","1,131,809","","","820,819"],["Total cash and cash equivalents and marketable securities","$","1,798,170","","","$","1,446,443"],["Dotdash Meredith Debt:"],["Dotdash Meredith Term Loan A","$","297,500","","","$","315,000"],["Dotdash Meredith Term Loan B-1","1,182,500","","","\u2014"],["Dotdash Meredith Term Loan B","\u2014","","","1,225,000"],["Total Dotdash Meredith long-term debt","1,480,000","","","1,540,000"],["Less: current portion of Dotdash Meredith long-term debt","35,000","","","30,000"],["Less: original issue discount","3,512","","","4,470"],["Less: unamortized debt issuance costs","6,481","","","8,423"],["Total Dotdash Meredith long-term debt, net","1,435,007","","","1,497,107"],["ANGI Group Debt:"],["ANGI Group Senior Notes","500,000","","","500,000"],["Less: unamortized debt issuance costs","3,160","","","3,953"],["Total ANGI Group long-term debt, net","496,840","","","496,047"],["Total long-term debt, net","$","1,931,847","","","$","1,993,154"]] [[/GREPCENT_TABLE]] The Company's international cash can be repatriated without significant tax consequences. During the year ended December 31, 2024, international cash repatriated to the U.S. was not material. For a detailed description of long-term debt and interest rate swaps, see “Note 2—Summary of Significant Accounting Policies” and “Note 6—Long-term Debt” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data.” 70 Cash Flow Information In summary, IAC's cash flows are as follows: [[GREPCENT_TABLE]] [["","Year Ended December 31,"],["","2024","","2023","","2022"],["","(In thousands)"],["Net cash provided by (used in):"],["Operating activities attributable to continuing operations","$","354,518","","","$","189,528","","","$","(82,791)"],["Investing activities attributable to continuing operations","$","276,825","","","$","(87,467)","","","$","(494,808)"],["Financing activities attributable to continuing operations","$","(129,099)","","","$","(223,013)","","","$","(112,651)"]] [[/GREPCENT_TABLE]] 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 losses (gains) on the investment in MGM, deferred income taxes, amortization of intangibles, pension and post-retirement benefit (credit) cost, depreciation, stock-based compensation expense, provision for credit losses, goodwill impairment, non-cash lease expense (including ROU asset impairments), unrealized (increase) decrease in the estimated fair value of a warrant and net (gains) losses on sales of businesses and investments in equity securities (including downward and upward adjustments). 2024 Adjustments to net earnings consist primarily of an unrealized loss on the investment in MGM of $649.2 million, amortization of intangibles of $144.5 million, depreciation of $126.9 million, stock-based compensation expense of $112.5 million, provision of credit losses of $61.9 million and non-cash lease expense of $54.1 million, partially offset by deferred income taxes of $181.0 million, an unrealized increase in the estimated fair value of a warrant of $20.4 million, net gains on sales of businesses and investments in equity securities (including downward and upward adjustments) of $10.5 million, including $29.2 million gain on the sale of assets of Mosaic Group in February 2024, and pension and post-retirement benefit credit of $5.5 million. The decrease from changes in working capital include a decrease in operating lease liabilities of $69.8 million, an increase in accounts receivable of $51.8 million and decreases in deferred revenue of $12.5 million and accounts payable and other liabilities of $9.3 million, partially offset by a decrease in other assets of $103.9 million. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in accounts receivable is due primarily to an increase at Angi due primarily to timing of cash receipts and an increase at Dotdash Meredith in revenue in the fourth quarter of 2024 relative to 2023, partially offset by a decrease at Mosaic Group due to cash receipts prior to the sale of its assets and a decrease in revenue at Search in the fourth quarter of 2024 relative to 2023. The decrease in deferred revenue is due primarily to lower annual memberships at Angi, primarily at Ads and Leads, and a decrease at Care.com primarily due to the timing of the utilization of services provided through Care for Business and lower subscriptions on the Care.com platform. The decrease in accounts payable and other liabilities is due primarily to timing of payments and a decrease at Search in accrued traffic acquisition costs and related payables, partially offset by an increase in accrued employee compensation, due primarily to an increase in accrued severance related to headcount reductions at Dotdash Meredith and an increase in accrued bonuses, an increase in accrued professional fees at Corporate and Angi due, in part, to the Distribution and an increase in an accrual at Care.com related to the resolution of certain legal matters. The decrease in other assets is due primarily to a decrease in prepaid hosting services at Corporate, Dotdash Meredith and Angi, receipt of pre-acquisition income tax refunds at Dotdash Meredith, the liquidation of the domestic funded pension plan at Dotdash Meredith in connection with the termination of the plan, lower capitalized sales commissions at Angi due, in part, to a reduction in headcount and payment received at Angi related to insurance coverage for previously incurred legal fees. Net cash provided in investing activities includes maturities of marketable debt securities of $375.0 million, net proceeds from the sales of businesses and investments of $177.2 million, including $155 million from the sale of assets of Mosaic Group, net proceeds from the sales of assets of $12.8 million principally from the sale of an aircraft at Dotdash Meredith and collections of notes receivable of $11.8 million. partially offset by $221.8 million for the purchases of marketable debt securities, capital expenditures of $65.5 million, primarily related to investments of $49.5 million in capitalized software at Angi to support its products and services, and the purchase of a retirement investment fund of $16.0 million at Dotdash Meredith in connection with the termination of the domestic funded pension plan and transfer of the remaining assets to the IAC Inc. Retirement Savings Plan. 71 Net cash used in financing activities includes payments on the Dotdash Meredith Term Loans of $68.0 million, including a $30.0 million principal prepayment and $8.0 million of additional principal payments made to certain Dotdash Meredith Term Loan B lenders; the $8.0 million in additional principal payments were offset by additional borrowings from new and existing lenders under Dotdash Meredith Term Loan B-1 of $8.0 million. Net cash used in financing activities also includes $28.6 million for the repurchase of 12.6 million shares of Angi Class A common stock, on a settlement date basis, at an average price of $2.27 per share, the purchase of the remaining noncontrolling interests of a foreign subsidiary at Angi of $16.0 million, withholding taxes paid on behalf of IAC employees, excluding Angi, for stock-based awards that were net settled of $15.0 million and withholding taxes paid on behalf of Angi employees for stock-based awards that were net settled of $7.6 million. 2023 Adjustments to net earnings consist primarily of amortization of intangibles of $296.0 million, depreciation of $175.1 million, stock-based compensation expense of $117.2 million, non-cash lease expense of $101.7 million, deferred income taxes of $88.8 million, provision of credit losses of $87.7 million, net losses on investments in equity securities (including downward and upward adjustments) and sales of businesses of $19.3 million and goodwill impairment of $9.0 million, partially offset by an unrealized gain on the investment in MGM of $721.7 million and an unrealized increase in the estimated fair value of a warrant of $2.8 million. The decrease from changes in working capital include a decrease in accounts payable and other liabilities of $120.3 million, a decrease in operating lease liabilities of $74.3 million and an increase in accounts receivable of $37.3 million. The decrease in accounts payable and other liabilities is due, in part, to a decrease in accrued traffic acquisition costs and related payables at Search and Dotdash Meredith, a decrease in accrued advertising at Angi and Search and a decrease in accrued employee compensation, due primarily to restructuring related severance payments at Dotdash Meredith. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The increase in accounts receivable is due primarily to timing of cash receipts at Angi and an increase in revenue relative to the fourth quarter of 2022 at Dotdash Meredith Digital, partially offset by a decrease in revenue relative to the fourth quarter of 2022 at Search. Net cash used in investing activities includes $455.4 million for the purchase of marketable debt securities, capital expenditures of $141.4 million, primarily related to payment of approximately $80 million for the acquisition of the formerly leased land under IAC's New York City headquarters building as well as investments of $45.2 million in capitalized software at Angi to support its products and services, and $103.6 million for the purchase of additional preferred shares of Turo, partially offset by maturities of marketable debt securities of $550.0 million, net proceeds from the sales of assets of $29.8 million, including $28.2 million related to the sale of a building at Dotdash Meredith, net proceeds from the sales of businesses and investments of $11.9 million and net collections of notes receivable of $11.3 million. Net cash used in financing activities includes the repurchase of 3.2 million shares of IAC common stock, on a settlement date basis, for $165.6 million at an average price of $51.00 per share, principal payments on the Dotdash Meredith Term Loans of $30.0 million, the repurchase of 4.4 million shares of Angi Class A common stock, on a settlement date basis, for $10.9 million at an average price of $2.50 per share, withholding taxes paid on behalf of IAC employees, excluding Angi, for stock-based awards that were net settled of $10.6 million and withholding taxes paid on behalf of Angi employees for stock-based awards that were net settled of $6.0 million. 72 2022 Adjustments to net loss attributable to continuing operations consist primarily of an unrealized loss on the investment in MGM of $723.5 million, amortization of intangibles of $307.7 million, pension and post-retirement benefit cost of $210.0 million, depreciation of $131.0 million, stock-based compensation expense of $123.5 million, provision of credit losses of $116.6 million, goodwill impairment of $112.8 million, non-cash lease expense (including ROU asset impairments) of $70.9 million and an unrealized decrease in the estimated fair value of a warrant of $62.5 million, partially offset by deferred income taxes of $337.8 million and net gains on sales of businesses and investments in equity securities (including downward and upward adjustments) of $39.0 million. The decrease from changes in working capital include a decrease in accounts payable and other liabilities of $247.9 million, an increase in accounts receivable of $66.7 million, a decrease in operating lease liabilities of $63.8 million and a decrease in deferred revenue of $11.0 million. The decrease in accounts payable and other liabilities is due primarily to (i) a decrease in accrued employee compensation due, in part, to change-in-control payments, partially offset by an increase in restructuring charges, at Dotdash Meredith, (ii) a decrease in accrued traffic acquisition costs and related payables at Search, (iii) a decrease in accounts payable at Dotdash Meredith due primarily to timing of payments and lower spend due to the discontinuation of certain print publications, (iv) a payment of pre-acquisition income tax indemnification liabilities at Dotdash Meredith and (v) a decrease in customer deposit liabilities at Dotdash Meredith due, in part, to the discontinuation of certain print publications. The increase in accounts receivable is due primarily to revenue growth at Angi, primarily attributable to Services, and an increase in revenue related to various production deals at IAC Films, partially offset by a decrease in revenue at Search and a decrease at Dotdash Meredith primarily due to the discontinuation of certain publications, reduced circulation of other publications and continued secular declines at Print and decreases in performance marketing and advertising revenue at Digital. The decrease in operating lease liabilities is due to cash payments on leases net of interest accretion. The decrease in deferred revenue is due primarily to timing of the utilization of services provided through Care for Business at Care.com, lower annual memberships at Angi, primarily at Ads and Leads, and a decrease in Digital licensing contracts at Dotdash Meredith. Net cash used in investing activities attributable to continuing operations includes $244.3 million for the purchase of 5.7 million additional shares of MGM, $233.9 million for the purchase of marketable debt securities and capital expenditures of $139.8 million primarily related to investments in capitalized software at Angi, Care.com and Dotdash Meredith, partially offset by net proceeds from the sale of certain businesses and investments of $90.8 million and collections of notes receivable of $19.5 million. Net cash used in financing activities attributable to continuing operations includes the repurchase of 1.1 million shares of IAC common stock, on a settlement date basis, for $85.3 million at an average price of $77.44 per share, principal payments on the Dotdash Meredith Terms of $30.0 million, withholding taxes paid on behalf of IAC employees, excluding Angi, for stock-based awards that were net settled of $18.1 million, withholding taxes paid on behalf of Angi employees for stock-based awards that were net settled of $8.8 million and the repurchase of 1.0 million shares of Angi Class A common stock, on a settlement date basis, for $8.1 million at an average price of $7.80 per share, partially offset by proceeds from the issuance of Vivian Health preferred shares, net of fees of $34.7 million. Liquidity and Capital Resources Financing Arrangements On November 26, 2024, the Company entered into the Amended Dotdash Meredith Credit Agreement, which governs both the existing Dotdash Meredith Term Loan A and the Dotdash Meredith Revolving Facility. Prior to the effectiveness of the Amended Dotdash Meredith Credit Agreement, Dotdash Meredith Term Loan B bore an interest rate of Adjusted Term SOFR plus 4.00%, plus a varying adjustment of 0.10%, 0.15% or 0.25% based upon the duration of the borrowing period. The Amended Dotdash Meredith Credit Agreement reset the interest rate on Dotdash Meredith Term Loan B-1 to Adjusted Term SOFR plus 3.50% and removed the varying adjustment. At December 31, 2024, Dotdash Meredith Term Loan B-1 bore interest at Adjusted Term SOFR, subject to a minimum of 0.50%, plus 3.50%, or 8.05%. Immediately prior to the effectiveness of the Amended Dotdash Meredith Credit Agreement, the Company prepaid $30 million in aggregate principal of Dotdash Meredith Term Loan B. For a detailed description of long-term debt, see “Note 6—Long-term Debt” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data.” 73 Investment in MGM At December 31, 2024, the Company owns 64.7 million common shares of MGM. Based on the number of MGM common shares outstanding at December 31, 2024, the Company owns 22.0% of MGM. Investment in Turo The Company net settled its Turo warrant on July 23, 2024 (the warrant expiration date) for 4.5 million shares of Series E-2 preferred stock, bringing IAC's ownership percentage in Turo to approximately 32% at December 31, 2024. Share Repurchase Authorizations and Activity At February 7, 2025, IAC had 3.7 million shares remaining in its share repurchase authorization. There were no repurchases of IAC common stock in 2024. During the year ended December 31, 2024, Angi repurchased 12.5 million shares of its Class A common stock, on a trade date basis, at an average price of $2.27 per share, or $28.4 million in aggregate. During the fourth quarter of 2023, Angi announced its intent to repurchase the 14.0 million shares remaining in its stock repurchase authorization from March 2020 (the “2020 Share Authorization”). On August 2, 2024, the board of directors of Angi approved a new stock repurchase authorization of 25 million shares (the “2024 Share Authorization”). As of August 19, 2024, Angi had no shares remaining under the 2020 Authorization. As of February 7, 2025, Angi had 23.1 million shares remaining in its 2024 Share Authorization. IAC and Angi may repurchase shares pursuant to their repurchase authorizations over an indefinite period of time in 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. Contractual Obligations The Company enters into various contractual arrangements as a part of its continued operations. Material contractual obligations as of December 31, 2024 are described in the accompanying notes to the financial statements within “Item 8—Financial Statements and Supplementary Data”; these include operating leases as described in “Note 5—Leases,” principal and interest payments on long-term debt as described in “Note 6—Long-Term Debt” and pension and post-retirement benefits as described in “Note 11—Pension and Post-Retirement Benefit Plans.” On January 28, 2025, the Company entered into an agreement to terminate its lease for unoccupied office space that otherwise would have expired in 2032 for total payments of $43.1 million, of which $21.6 million was paid in January 2025 and the remaining balance will be paid in April 2025. The gain on the lease termination of $36.2 million will be recognized in the first quarter of 2025. The termination of this lease reduces future fixed lease payments by $101.7 million. The Company has material purchase obligations, which represent legally binding agreements to purchase goods and services that specify all significant terms. Future payments under these agreements at December 31, 2024 are as follows: [[GREPCENT_TABLE]] [["","Amount of Commitment Expiration Per Period"],["","Less Than 1 Year","","1-3 Years","","3-5 Years","","More Than 5 Years","","Total Amounts Committed"],["","(In thousands)"],["Purchase obligations","$","74,667","","","$","20,032","","","$","\u2014","","","$","\u2014","","","$","94,699"]] [[/GREPCENT_TABLE]] Purchase obligations include future payments of (i) $32.6 million related to cloud computing arrangements, (ii) $12.6 million related to email marketing services, (iii) $12.0 million related to advertisement placement services in 2025, (iv) $8.8 million related to research tools and (v) $6.4 million related to office productivity and email tools. 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 2025 capital expenditures are expected to be higher than its 2024 capital expenditures of $65.5 million by approximately 20% to 30%, due primarily to an increase in capitalized software at Angi and Dotdash Meredith. 74 Liquidity Assessment On a consolidated basis, the Company generated positive cash flows from operating activities of $354.5 million for the year ended December 31, 2024; excluding the positive cash flows from operating activities of $162.3 million and $155.9 million generated by Dotdash Meredith and Angi, respectively, the Company generated positive cash flows from operating activities of $36.3 million. At December 31, 2024, the Company's consolidated cash and cash equivalents were $1.8 billion, of which $416.4 million and $249.9 million was held by Angi and Dotdash Meredith, respectively. The Company's consolidated debt consists of $1.5 billion, which is the liability of Dotdash Meredith, Inc., and $500.0 million, which is the liability of ANGI Group, a subsidiary of Angi. The Amended 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 Amended Dotdash Meredith Credit Agreement. Dotdash Meredith did not exceed this ratio for the test period ended December 31, 2024. The Amended Dotdash Meredith Credit Agreement also permits 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 Amended 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. During the year ended December 31, 2024, the Company contributed $125 million to Dotdash Meredith, following which Dotdash Meredith distributed $230 million back to the Company, including $105 million in January 2024 related to the Company's contribution in December 2023. The contributions ceased in September 2024, which Dotdash Meredith distributed back to the Company in October 2024 and, therefore, there are no contributions or distributions outstanding as of December 31, 2024. See “Note 6—Long-Term Debt” to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information. Angi 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 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. The Company believes Angi'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 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 could further limit the Company's ability to raise additional financing. 75 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The following disclosure is provided to supplement the descriptions of IAC's accounting policies contained in “Note 2—Summary of Significant Accounting Policies” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” in regard to significant areas of judgment. Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). These estimates, judgments and assumptions affect the amounts and disclosures reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Because of the size of the financial statement elements to which they relate, some of our accounting policies and estimates have a more significant impact on our financial statements than others. What follows is a discussion of some of our more significant accounting policies and estimates. Business Combinations Acquisitions, which are generally referred to in GAAP as business combinations, are an important part of the Company's growth strategy. The purchase price of an acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill. Management makes two critical determinations at the time of an acquisition: (1) the reporting unit(s) that will benefit from the acquisition and to which goodwill will be assigned and (2) the allocation of the purchase price of the acquired business to the assets acquired and the liabilities assumed based upon their fair values. The reporting unit determination is important beyond the initial allocation of purchase price because future impairment assessments of goodwill, as described below, are performed at the reporting unit level. Historically, when the Company’s acquisitions have been complementary to existing reporting units, the goodwill is allocated to an existing reporting unit. Acquisitions within Emerging & Other usually result in the creation of a new reporting unit because it is a standalone business with unique product offerings, management or target markets. There have been no acquisitions made since the 2021 acquisition of Meredith, for which the allocation of purchase price to the assets acquired and liabilities assumed, the determination of the reporting units and the allocation of goodwill to the reporting units were finalized during the fourth quarter of 2022. The allocation of purchase price to the assets acquired and liabilities assumed is based upon their fair values and is complex because of the judgments involved in determining these values. The determination of purchase price and the fair value of monetary assets acquired and liabilities assumed is typically the least complex aspect of the Company’s accounting for business combinations due to management’s experience and/or the inherently lower level of judgment required. Due to the higher degree of complexity associated with the valuation of acquired intangible assets, the Company usually obtains the assistance of outside valuation experts in the allocation of purchase price to the identifiable intangible assets acquired, which can be both definite-lived, such as advertiser relationships, technology, licensee relationships, trade names, content, customer lists and user base, and professional relationships, or indefinite lived, such as trade names and trademarks. While outside valuation experts may be used, management has the ultimate responsibility for the valuation methods, models and inputs used and the resulting purchase price allocation. The excess purchase price over the value of net tangible and identifiable intangible assets acquired is recorded as goodwill and is assigned to the reporting unit(s) expected to benefit from the business combination as of the acquisition date. Recoverability of Goodwill and Indefinite-Lived Intangible Assets The carrying value of goodwill is $2.9 billion and $3.0 billion at December 31, 2024 and 2023, respectively. Indefinite-lived intangible assets, which consist of the Company's acquired trade names and trademarks, have a carrying value of $513.1 million and $544.2 million at December 31, 2024 and 2023, respectively. Goodwill and indefinite-lived intangible assets are assessed annually for impairment as of October 1 or more frequently if an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit or the fair value of an indefinite-lived intangible asset has declined below its carrying value. In performing its annual goodwill impairment assessment, the Company has the option under GAAP to qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying value; if the conclusion of the qualitative assessment is that there are no indicators of impairment, the Company does not perform a quantitative test, which would require a valuation of the reporting unit, as of October 1. GAAP provides a not all-inclusive set of examples of macroeconomic, industry, market and company specific factors for entities to consider in performing the qualitative assessment described above; management considers the factors it deems relevant in making its more-likely-than-not assessments. While the Company has the option under GAAP to qualitatively assess whether it is more likely than not that the fair values of its indefinite-lived intangible assets are less than their carrying values, the Company's policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1, in part, because the level of effort required to perform the quantitative and qualitative assessments is essentially equivalent. 76 If the conclusion of our qualitative assessment is that there are indicators of impairment and a quantitative test is required, the annual or interim quantitative test of the recovery of goodwill involves a comparison of the estimated fair value of the Company's reporting unit that is being tested to its carrying value. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired. If the carrying value of a reporting unit exceeds its estimated fair value, a goodwill impairment equal to the excess is recorded. The Company’s annual assessment of the recovery of goodwill begins with management’s reassessment of its operating segments and reporting units. A reporting unit is an operating segment or one level below an operating segment, which is referred to as a component. This reassessment of reporting units is also made each time the Company changes its operating segments to the extent that this also results in a change in reporting units. If the goodwill of a reporting unit is allocated to newly formed reporting units, the allocation is usually made to each reporting unit based upon their relative fair values. For the Company's annual goodwill test as of October 1, 2024, qualitative assessments of the goodwill of the Dotdash Meredith Digital, Angi International and Vivian Health reporting units were performed because the Company concluded it was more likely than not that the fair value of these reporting units was in excess of their respective carrying values. The primary factors that the Company considered in its qualitative assessment for each of these reporting units are described below: •The Company considered the strong forecasted operating performance, in addition to actual operating results in the current year of the Dotdash Meredith Digital reporting unit and, based on the Company's latest valuation prepared as of October 1, 2023, the excess of its estimated fair value of the reporting unit compared to its carrying value. The Company also considered the valuations of Dotdash Meredith as of December 31, 2023 and June 30, 2024 that were prepared in connection with the issuance and/or settlement of equity awards that are denominated in its equity. These valuations were prepared time proximate to, however, not as of, October 1, 2024. •The Company prepared a valuation of the Angi International and Vivian Health reporting units primarily in connection with the issuance and/or settlement of equity awards that are denominated in the equity of these businesses as of June 30, 2024. These valuations were prepared time proximate to, however, not as of, October 1, 2024. The fair value of these businesses were in excess of their October 1, 2024 carrying values. For the Company's annual goodwill test at October 1, 2024, the Company quantitatively tested the Angi Ads and Leads, Angi Services, and Care.com reporting units. The Company's quantitative tests resulted in no impairments. The Company's remaining reporting units, Dotdash Meredith Print, Search, The Daily Beast and IAC Films, have no goodwill as of October 1, 2024. Given the decline in Angi's and the Company's stock prices after October 1, 2024, the Company subsequently quantitatively tested all reporting units with goodwill as of December 31, 2024 and no impairments were noted. During the third quarter of 2023 and second quarter of 2022, the Company reassessed the fair value of the Mosaic Group reporting unit (included within Emerging & Other) and recorded goodwill impairments of $9.0 million and $86.7 million, respectively, as a result of the projected reduction in future revenue and profits from the business and lower trading multiples of a selected peer group of companies. In the fourth quarter of 2022, prior to its sale in 2023, a quantitative assessment was performed on the Roofing reporting unit; this test resulted in a full impairment of $26.0 million due to Roofing exiting certain markets and a projected reduction in future profits from the business, which reduced its fair value. There is no goodwill for which the most recent estimate of the excess of fair value over carrying value is less than 20%. 77 The fair value of the Company's reporting units is determined using both an income approach based on discounted cash flows (“DCF”) and a market approach when it tests goodwill for impairment, either on an interim basis or annual basis as of October 1 each year. The Company uses the same approach in determining the fair value of its businesses in connection with its non-public subsidiary denominated stock-based compensation plans, which can be a significant factor in the decision to apply the qualitative assessment rather than a quantitative test. Determining fair value using a DCF analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the DCF analyses are based on the Company's most recent forecast and budget and, for years beyond the budget, the Company's estimates, which are based, in part, on forecasted growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows of the respective reporting units. Assumptions used in the DCF analyses, including the discount rate, are assessed based on each reporting unit's current results and forecasted future performance, as well as macroeconomic and industry specific factors. The discount rates used in the quantitative tests as of December 31, 2024 for determining the fair values of the Dotdash Meredith Digital, Angi Ads and Leads, Angi Services, Angi International, Care.com and Vivian Health reporting units were 14.5%, 13%, 14%, 15%, 14.5% and 23%, respectively. The discount rates used in the quantitative tests as of October 1, 2024 for determining the fair values of the Angi Ads and Leads, Angi Services and Care.com reporting units were 12.5%, 13.5% and 14%, respectively. The discount rates used in the quantitative tests as of October 1, 2023 for determining the fair value of the Company's Dotdash Meredith Digital, Care.com and Mosaic Group reporting unit were 15.5%,16% and 16%, respectively. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined, which is applied to financial metrics to estimate the fair value of a reporting unit. To determine a peer group of companies for our respective reporting units, we considered companies relevant in terms of consumer use, monetization model, margin and growth characteristics, and brand strength operating in their respective sectors. The Company determines the fair value of indefinite-lived intangible assets using an avoided royalty DCF valuation analysis. Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company's trade names and trademarks. The future cash flows are based on the Company's most recent forecast and budget and, for years beyond the budget, the Company's estimates, which are based, in part, on forecasted growth rates. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. The discount rates used in the Company's annual indefinite-lived impairment assessment ranged from 12.5% to 14.5% in 2024 and 15% to 17% in 2023, and the royalty rates used ranged from 2% to 8% in both 2024 and 2023. The October 1, 2023 annual quantitative assessment of indefinite-lived intangible assets identified an impairment of $79.9 million related to certain other indefinite-lived trade name intangible assets in the Dotdash Meredith Digital segment. The discount rate used to value these trade names was 15.5% and the royalty rate was 6%. 78 In the fourth quarter of 2024, the Company identified an impairment charge of $2.6 million related to a certain indefinite-lived trade name at Angi Services. The discount rate used to value this trade name was 14.0% and the royalty rate was 2.5%. During the first quarter of 2024, the Company determined that a projected reduction in future revenue related to certain indefinite-lived trade name intangible assets with a carrying value of $20.7 million in the Dotdash Meredith Digital segment resulted in a change in classification to definite-lived intangible assets to be amortized over their respective useful lives. There was no impairment recorded in connection with the change in classification. During the third quarter of 2023, the Company determined that a projected reduction in future revenue related to a certain indefinite-lived trade name intangible asset in the Dotdash Meredith Digital segment was an indicator of possible impairment. Following the identification of the indicator, the Company updated its calculation of the fair value of the indefinite-lived intangible asset and recorded an impairment of $7.6 million. The discount rate used to value the trade name was 16% and the royalty rate was 8%. A quantitative assessment of this indefinite-lived trade name intangible asset was prepared as of October 1, 2023; this test resulted in no additional impairment as its carrying value approximates its fair value. If the carrying value of an indefinite-lived intangible asset exceeds its estimated fair value, an impairment equal to the excess is recorded. There is one indefinite-lived intangible asset at Angi Services with a value of approximately $16.2 million for which the most recent estimate of the excess of fair value over carrying value is less than 20%. The impairment of indefinite-lived intangible assets are included in “Amortization of intangibles” in the accompanying statement of operations. Recoverability of Long-Lived Assets We review the carrying value of all long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value. The carrying value of these long-lived assets is $857.0 million and $1.1 billion at December 31, 2024 and 2023, respectively. During the first quarter of 2023, due to the continued decline in the commercial real estate market, Dotdash Meredith recorded impairment charges of $70.0 million related to certain unoccupied leased office space consisting of impairments of $44.7 million and $25.3 million of an ROU asset and related leasehold improvements, furniture and equipment, respectively. During the third quarter of 2022, Dotdash Meredith recorded impairment charges of $21.3 million related to the consolidation of certain leased spaces following the Meredith acquisition consisting of impairments of $14.3 million and $7.0 million of an ROU asset and related leasehold improvements, furniture and equipment, respectively. See “Note 17—Dotdash Meredith Restructuring Charges, Transaction-Related Expenses and Change-in-Control Payments” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for additional information. The impairment charges related to ROU assets are included in “General and administrative expense” and 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 DCF 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. Income Taxes The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized. At December 31, 2024 and 2023, the balance of the Company's net deferred tax assets (liabilities) is $16.1 million and $(162.9) million, respectively. 79 The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustainable upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. De-recognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. This measurement step is inherently difficult and requires subjective estimations of such amounts to determine the probability of various possible outcomes. At December 31, 2024 and 2023, the Company has unrecognized tax benefits, including interest and penalties, of $23.8 million and $19.6 million, respectively. We consider many factors when evaluating and estimating our tax positions and unrecognized tax benefits, which may require periodic adjustment and which may not accurately anticipate actual outcomes. Although management currently believes changes to 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 ultimate amount of deferred income tax assets realized and the amounts paid for deferred income tax liabilities and unrecognized tax benefits may vary from our estimates due to future changes in income tax law, state income tax apportionment or the outcome of any review of our tax returns by the various tax authorities, as well as actual operating results of the Company that vary significantly from anticipated results. Stock-Based Compensation Stock-based compensation at the Company is inherently complex. Our desire is to attract, retain, incentivize and reward our management team and employees at each of our subsidiaries, including those employed by companies we acquire, by allowing them to benefit directly from the value they help to create. We accomplish these objectives, in part, by issuing equity awards denominated in the equity of our non-publicly traded subsidiaries as well as in IAC and Angi. We further refine this approach by tailoring certain equity awards to the applicable circumstances. For example, we have in the past issued certain equity awards for which vesting is linked to the achievement of a performance target such as revenue or profits; these awards are referred to as performance-based awards. In other cases, we link the vesting of equity awards to the achievement of a value target for a subsidiary or IAC or Angi's stock price, as applicable; these awards are referred to as market-based awards. The nature and variety of these types of equity-based awards creates complexity in our determination of stock-based compensation expense. In addition, acquisitions are an important part of the Company's growth strategy. These transactions may result in the modification of equity awards, which may create additional complexity and additional stock-based compensation expense. In addition, our spin-offs and internal reorganizations can also lead to modifications of equity awards and may result in additional complexity and stock-based compensation expense. Finally, the means by which we settle our equity-based awards also introduces complexity into our financial reporting. We provide a path to liquidity by settling the non-public subsidiary denominated awards in IAC or Angi shares, as applicable. In addition, certain former Angi subsidiary denominated awards and Angi stock appreciation rights can be settled in IAC or Angi awards at the Company’s election. These features increase the complexity of our earnings per share calculations. Stock-based compensation expense reflected in our statement of operations includes expense related to equity awards issued by certain of our subsidiaries and awards granted to the Company's Corporate employees and the employees of Angi. The awards granted to the Company's Corporate employees and the employees of Angi have principally been in the form of restricted stock units (“RSUs”), performance-based RSUs, market-based RSUs and restricted stock. For RSUs, the value of the instrument is measured at the grant date as the fair value of the underlying common stock and expensed as stock-based compensation expense over the vesting term. For performance-based RSUs, the value of the instrument is measured at the grant date as the fair value of the underlying common stock and expensed as stock-based compensation over the vesting term when the performance targets are considered probable of being achieved. For market-based RSUs, a lattice model is used to estimate the value of the awards. For IAC restricted stock, a lattice model was used to estimate the fair value of the award which was based on the satisfaction of IAC's stock price targets. See “Note 10—Stock-Based Compensation” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data” for a discussion of the forfeiture of the IAC restricted stock award on January 13, 2025. 80 The principal form of equity awards to the employees and management of its non-publicly traded subsidiaries is stock settled stock appreciation rights that are denominated in the equity of the relevant subsidiary of the Company or Angi, in the case of its International business, which are settleable in shares of the Company or Angi as applicable. The value of the stock settled stock appreciation rights is tied to the value of the common stock of these subsidiaries. Accordingly, these interests only have value to the extent the relevant business appreciates in value above the initial value utilized to determine the exercise price and these interests can have substantial value in the event of significant appreciation. The grant date value of these stock settled stock appreciation rights is measured at grant date, using a Black-Scholes option pricing model and, for those with a market condition, a lattice model, at fair value and is expensed over the vesting term. The Company estimates the fair value of stock options upon issuance or modification using a Black-Scholes option pricing model and, for those with a market condition, a lattice model. No stock options were issued by the Company in the years ended December 31, 2024, 2023 and 2022, respectively. Investments in Equity Securities The Company's equity securities, other than those of its consolidated subsidiaries and those accounted for under the equity method, are accounted for at fair value under the measurement alternative in accordance with ASC Subtopic 321, Investments - Equity Securities, with any changes to fair value recognized in “Other income (expense), net” in the statement of operations each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar securities of the same issuer; fair value is generally determined based on a market approach as of the transaction date. A security will be considered identical or similar if it has identical or similar rights to the equity securities held by the Company. The Company reviews its investments in equity securities without readily determinable fair values for impairment each reporting period when there are qualitative factors or events that indicate possible impairment. Factors the Company considers in making this determination include negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of its investments in equity securities, which require judgment and the use of estimates. When the Company's assessment indicates that the fair value of the investment is below its carrying value, the Company writes down the investment to its fair value and records the corresponding charge in “Other income (expense), net” in the statement of operations. The carrying value of the Company’s equity securities without readily determinable fair values is $438.5 million and $404.8 million at December 31, 2024 and 2023, respectively, which is included in “Long-term investments” in the balance sheet. The Company has no investments in marketable equity securities, following the change in classification of its investment in MGM to an equity method investment in the fourth quarter of 2023, described below. Prior to the fourth quarter of 2023, the Company had two investments in marketable equity securities, other than its investment in MGM, including one investment that was fully impaired in the first quarter of 2023 due to the investee declaring bankruptcy and another investment that was sold in the third quarter of 2023. The Company recorded net unrealized pre-tax losses of $0.3 million and $20.3 million for these investments during the years ended December 31, 2023 and 2022, respectively. The realized and unrealized pre-tax gain and losses related to these investments are included in “Other income (expense), net” in the statement of operations. At December 31, 2024, the Company owns 64.7 million common shares of MGM, which represents 22.0% of MGM's common shares outstanding. In the fourth quarter of 2023, MGM's ongoing share repurchase program passively increased the Company's ownership interest in MGM and 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 resulted in no change to the accounting for its investment in MGM. 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. The cumulative unrealized net pre-tax gain through December 31, 2024 is $978.8 million. For the years ended December 31, 2024, 2023 and 2022, the Company recognized unrealized pre-tax (losses) gains of $(649.2) million, $721.7 million and $(723.5) million, respectively from its investment in MGM. 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 February 7, 2025, the fair value of the Company's investment in MGM was $2.2 billion. 81 Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see “Note 2—Summary of Significant Accounting Policies” in the accompanying notes to the financial statements included in “Item 8—Financial Statements and Supplementary Data.” 82