IAC · People Incorporated

IAC's Q1 2026 results reflect a strategic pivot from a diversified holding company to a streamlined entity named People Incorporated, trading as PPLI, centered on People Inc. and its MGM stake. Total revenue fell 12% YoY to $422.9M primarily due to the Care.com divestiture treated as discontinued operations and a 76% plunge in Search revenue to $17.1M amid Google algorithm changes and policy shifts, with Search ceasing operations post-April 30, 2026. People Inc., the core asset, showed resilience with Digital revenue up 8% to $253M, fueled by 15% Performance marketing growth, 26% Licensing/other, and 1% Advertising, despite a 17% Core Sessions drop from Google AI Overviews. Digital operating income rose 56% to $27.8M and Adjusted EBITDA 20% to $49.9M (20% margin), highlighting expense leverage and 45% incremental margins. Overall Adjusted EBITDA dropped 93% to $2.7M due to $10M Q1 severance and Corporate losses from higher stock-based compensation. Free Cash Flow turned positive at $2M from -$31.4M YoY, aided by operational improvements. Capital allocation included $111M IAC share repurchases (2.9M shares) and $37M for 1M additional MGM shares, bringing ownership to 66.8M shares valued at $2.6B. The restructuring targets $40M annual opex savings via workforce reductions and integrations, plus $20-25M lower SBC, with $14M severance expected. Leadership transitions see COO/CFO Halpin and Legal chief Handler exit in August 2026 as advisors through March 2027, with Vogel as CEO and Quinn as CFO post-Q2. Barry Diller remains Chairman. Care.com sale yielded $296M net proceeds, bolstering $1.1B cash position. Investors should note non-filed status of Exhibits 99.1/99.2 under Reg FD.