IAC's profit beats estimates on strong dating business growth

Reuters News
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Posted: Jul 28, 2015 4:28 PM

(Reuters) - Media mogul Barry Diller's IAC/InterActiveCorp <IACI.O> reported a better-than-expected quarterly profit as more users signed up for its dating services and the paid version of its mobile app Tinder outperformed the company's expectations.

Shares of IAC, whose portfolio also includes dating website Match.com as well as Investopedia and Dictionary.com, rose nearly 2 percent in trading after the bell on Tuesday.

The company's search business is its largest, but the dating business Match Group is seen as the crown jewel of the conglomerate and has been driving strong results for the past few quarters.

In a widely expected move, IAC said last month it plans to float about 20 percent of the business, which also houses OkCupid, OurTime and Princeton Review, by the end of this year.

Match Group earlier this month agreed to buy dating website PlentyOfFish to push deeper into the lucrative mobile-based dating business, which attracts users with its photo-sharing, instant messaging and geolocation services.

IAC on Tuesday said the paid version of Tinder, launched in March, was garnering good user response.

"Monetization continues to perform at or above our expectations on key metrics," Match Group Chairman Greg Blatt said in a statement.

IAC said the number of paid subscribers for its dating services grew 18 percent to 4.1 million in the second quarter ended June 30.

Revenue at Match Group, which contributes about a third of total revenue, rose 19 percent. Excluding the effect of foreign exchange, revenue rose 25 percent.

The company's search and applications business, which houses brands such as Investopedia, About.com and Dictionary.com, fell 11 percent. The business accounts for half of total revenue.

That dragged down total revenue growth to 2 percent. Still total revenue of $771.1 million beat analysts' average estimate of $776 million, according to Thomson Reuters I/B/E/S.

IAC's net income was $59.3 million, or 68 cents per share, compared with a net loss of $18 million, or 22 cents per share.

On an adjusted basis, IAC earned 85 cents per share, easily beating estimates of 59 cents.

IAC's shares have risen more than 32 percent this year through Tuesday's close of $80.60 on the Nasdaq.

(Reporting by Sai Sachin R and Subrat Patnaik in Bengaluru; Editing by Savio D'Souza)