UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  February 7, 2018

IAC/INTERACTIVECORP

(Exact name of registrant as specified in charter)

Registrant’s telephone number, including area code:        (212) 314-7300

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02                                           Results of Operations and Financial Condition.

Item 7.01                                           Regulation FD Disclosure.

On February 7, 2018, the Registrant announced that it had released its results for the quarter ended December 31, 2017.  The full text of the related press release, which is posted on the “Investor Relations” section of the Registrant’s website at http://www.iac.com/Investors and appears in Exhibit 99.1 hereto, is incorporated herein by reference.

Exhibit 99.1 is being furnished under both Item 2.02 “Results of Operations and Financial Condition” and Item 7.01 “Regulation FD Disclosure.”

Item 9.01                                           Financial Statements and Exhibits.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  February 7, 2018

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Exhibit 99.1

IAC REPORTS Q4 2017

NEW YORK— February 7, 2018—IAC (NASDAQ: IAC) released its fourth quarter 2017 results today and separately posted a letter to shareholders from IAC’s CEO Joey Levin on the Investor Relations section of its website at www.iac.com/Investors.

IAC SUMMARY RESULTS

($ in millions except per share amounts)

See reconciliations of GAAP to non-GAAP measures beginning on page 12.

Q4 2017 HIGHLIGHTS

·                  Operating income and Adjusted EBITDA reflect transaction-related items in connection with the Angie’s List transaction.  Excluding these items, IAC operating income was $141.5 million (up 25% year-over-year) and Adjusted EBITDA was $213.3 million (up 30% year-over-year).

·                  ANGI Homeservices revenue increased 80% to $223.2 million.  Excluding the transaction-related items, operating income was $13.3 million and Adjusted EBITDA was $38.3 million, which represents a 17% Adjusted EBITDA margin.

·                  Match Group revenue growth accelerated to 28% driven by 24% growth in average subscribers to over 7.0 million.  Tinder average subscribers exceeded 3.1 million in Q4 2017, increasing 544,000 sequentially.  Operating income increased 13% to $127.7 million and Adjusted EBITDA increased 20% to $153.2 million.

·                  Vimeo subscribers increased 14% year-over-year to 873,000 and gross bookings (excluding the Livestream acquisition completed on October 18, 2017) increased 25% year-over-year.

·                  Applications delivered operating income of $28.9 million and Adjusted EBITDA of $30.2 million.

·                  Publishing revenue increased 44% to $116.9 million driven in part by Premium Brands revenue growth accelerating to 29%.  Operating income and Adjusted EBITDA were $18.6 million and $20.5 million, respectively.

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DISCUSSION OF FINANCIAL AND OPERATING RESULTS

(a) Q4 2017 operating loss of $33.9 million at ANGI Homeservices includes $25.1 million in stock-based compensation expense and $22.0 million of costs and deferred revenue write-offs in connection with the Combination; excluding the transaction-related items, operating income was $13.3 million and Adjusted EBITDA was $38.3 million.

Match Group

·                  Operating income was $127.7 million, up 13% year-over-year reflecting:

·                  20% Adjusted EBITDA growth driven by higher revenue, partially offset by higher in-app purchase fees, an increase in selling and marketing expense and employee costs (due primarily to increased headcount at Tinder)

·                  $3.9 million higher stock-based compensation expense and a $7.3 million increase in contingent consideration adjustments in Q4 2017

Please refer to the Match Group Q4 2017 earnings release and the related investor presentation referenced therein for further detail.

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ANGI Homeservices

·                  Revenue increased 80% to $223.2 million driven by 32% Marketplace growth (36% increase in service requests and a 26% increase in paying service professionals to 181,000) and a full quarter contribution from Angie’s List following the completion of the combination of HomeAdvisor and Angie’s List to create ANGI Homeservices on September 29, 2017.

·                  Operating loss was $33.9 million compared to operating income of $6.2 million in Q4 2016 reflecting:

·                  An increase in stock-based compensation expense of $26.7 million (which included $25.1 million in connection with the Angie’s List transaction) and amortization of intangibles of $15.5 million (driven primarily by the Angie’s List transaction)

·                  Adjusted EBITDA growth of 36% to $16.2 million driven by higher revenue, partially offset by $14.4 million of severance, retention, transaction and integration-related costs and $7.6 million deferred revenue write-offs in connection with the Angie’s List transaction as well as higher selling and marketing expense (including 62% growth in TV marketing)

Please refer to the ANGI Homeservices Q4 2017 earnings release for further detail.

Video

·                  Revenue increased 40% to $92.9 million driven by strong growth at Vimeo and by the sale of The Legacy of a Whitetail Deer Hunter and the release of Lady Bird at IAC Films, partially offset by declines at Electus.

·                  Operating loss increased to $10.4 million driven by higher Adjusted EBITDA losses due primarily to Electus declines and higher losses from Vimeo (driven by investment in product development and marketing as well as $2.1 million of deferred revenue write-offs related to the Livestream acquisition).

Applications

·                  Revenue decreased 12% to $138.8 million due to a 27% decrease in Partnerships and an 8% decrease in Consumer.  Partnerships declines continued as expected and Consumer declines were primarily driven by lower revenue per query at the B2C desktop applications business.

·                  Operating income of $28.9 million decreased 15% driven primarily by a 20% decrease in Adjusted EBITDA to $30.2 million due to lower revenue, partially offset by lower marketing.

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Publishing

·                  Revenue increased 44% to $116.9 million due to:

·                  29% higher Premium Brands revenue driven by 39% growth at Dotdash and 57% growth at Investopedia (both accelerating from 20% growth in Q3 2017), as well as growth at Dictionary

·                  54% higher Ask & Other revenue

·                  Operating income improved $28.3 million to $18.6 million (from a loss of $9.7 million in Q4 2016) due to:

·                  Adjusted EBITDA of $20.5 million compared to a $0.9 million loss in the prior year due to higher revenue and lower operating costs as a percentage of revenue resulting from restructurings in 2016, including $8.7 million in restructuring costs in Q4 2016

·                  A decrease of $5.5 million in amortization of intangibles due to a trade name that is now fully amortized

Corporate

Operating loss increased $8.9 million due primarily to a $5.6 million increase in Adjusted EBITDA losses (driven in part by higher compensation costs) and an increase in stock-based compensation expense of $4.4 million.

Income Taxes

In the fourth quarter of 2017, the Company recorded a tax provision of $31.8 and $6.4 million for GAAP and Adjusted Net Income, respectively.  The provision was primarily due to the one-time transition tax on foreign earnings of $62.7 million.  The Company will not be required to pay the transition tax because of its net operating loss position.  The Company does not expect to be a US federal cash income tax payer until 2021, which is in line with previous estimates.

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LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2017, IAC had 82.6 million common and Class B common shares outstanding and had 8.6 million shares remaining in its stock repurchase authorization.  IAC may purchase shares over an indefinite period on the open market and in privately negotiated transactions, depending on those factors IAC management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.

As of December 31, 2017:

·                  On a consolidated basis, the Company had $1.6 billion in cash and cash equivalents, of which IAC held $1.1 billion, Match Group held $272.6 million and ANGI Homeservices held $221.5 million.

·                  On a consolidated basis, the Company had $2.1 billion in long-term debt, of which IAC owed $552.4 million, Match Group owed $1.3 billion and ANGI Homeservices owed $275.0 million (including a current portion of $13.8 million).

·                  IAC has a $300 million revolving credit facility and Match Group has a $500 million revolving credit facility.  Both credit facilities were undrawn as of December 31, 2017 and currently remain undrawn.

As of December 31, 2017, IAC’s economic and voting interest in:

·                  Match Group were 81.2% and 97.6%, respectively.  IAC held 222.8 million shares.

·                  ANGI Homeservices were 86.9% and 98.5%, respectively.  IAC held 415.2 million shares.

CONFERENCE CALL

IAC executives will participate in the ANGI Homeservices quarterly conference call to answer questions regarding IAC on Thursday, February 8, 2018, at 8:30 a.m. Eastern Time.  This call will include the disclosure of certain information, including forward-looking information, which may be material to an investor’s understanding of IAC’s business.  The live audiocast will be open to the public at www.iac.com/Investors or ir.angihomeservices.com.

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OPERATING METRICS

See notes on following page

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OPERATING METRICS — continued

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DILUTIVE SECURITIES

IAC has various dilutive securities.  The table below details these securities as well as potential dilution at various stock prices (shares in millions; rounding differences may occur).

The dilutive securities calculation in the above table is different from GAAP dilution, which is calculated based on the treasury method, and is based on the following assumptions:

RSUs and non-publicly traded subsidiary denominated equity awards — These awards are settled on a net basis, with IAC making a cash payment on behalf of the holder equal to the amount of required tax withholdings; therefore, the dilutive effect is presented as the net number of shares expected to be issued upon vesting or exercise, in each case assuming a withholding tax rate of 50%.  In addition, the estimated income tax benefit from the tax deduction received upon the vesting or exercise of these awards is used to repurchase IAC shares.

Options — The cash generated from the exercise of all options (both vested and unvested awards), consisting of (a) the option exercise price and (b) the estimated income tax benefit from the tax deduction received upon the exercise of IAC options, is used to repurchase IAC shares.

Exchangeable Senior Notes — No dilution is reflected in the table above for the 0.875% Exchangeable Senior Notes issued on October 2, 2017, which are exchangeable into IAC common shares at an initial conversion price of approximately $152.18 per share, because any dilution is offset by the assumed exercise of the bond hedge, which was purchased upon issuance of the Exchangeable Senior Notes.

ANGI Homeservices and Match Group Equity Awards and the Treatment of the Related Dilutive Effect

Certain ANGI Homeservices and Match Group equity awards can be settled either in IAC common shares or the common shares of these subsidiaries at IAC’s election.  For purposes of the dilution calculation above, these awards are assumed to be settled in shares of ANGI Homeservices and Match Group common stock; therefore, no dilution from these awards is included.

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GAAP FINANCIAL STATEMENTS

IAC CONSOLIDATED STATEMENT OF OPERATIONS

($ in thousands except per share amounts)

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IAC CONSOLIDATED BALANCE SHEET

($ in thousands)

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IAC CONSOLIDATED STATEMENT OF CASH FLOWS

($ in thousands)

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IAC RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

IAC RECONCILIATION OF OPERATING CASH FLOW TO FREE CASH FLOW

($ in millions; rounding differences may occur)