Benzinga | Nov 6, 2020 10:07AM EST

IAC Shares Rally On Vimeo Funding, Possible Spinout

IAC/InterActive Corp (NASDAQ:IAC) shares are trading higher after reporting third-quarter earnings and announcing a possible spinoff of its Vimeo business.

Q3 Earnings: Third-quarter revenue was up 12% year-over-year.

The company reported revenue up 9% to $389.9 million for its ANGI Homeservices (NASDAQ:ANGI) business. Dotdash revenue grew 26% year-over-year to $50.8 million, marking the 14th consecutive quarter of double-digit revenue growth.

Search revenue was $145.2 million for the third quarter.

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Vimeo Performance: In the third quarter, Vimeo revenue grew 44% year-over-year to $75.1 million.

Subscribers grew 21% year-over-year to 1.46 million. The average revenue per subscriber grew 22% in the quarter.

The company reported its first quarter of positive adjusted EBITDA.

IAC also announced it's considering a spinoff of the Vimeo brand, which provides turnkey tools for video production. Key customers of Vimeo were listed as Starbucks, GoDaddy, Amazon and Siemens. Enterprise revenue, representing large customers, doubled year-over-year and represented around a quarter of Vimeo's quarter revenue.

Vimeo is used by over 200 million users globally including over 3,500 enterprise customers and 1.5 million paying subscribers.

Vimeo also announced a $150 million funding from Thrive Capital and GIC. The funding valued the company at $2.75 billion.

IAC Price Action: Shares of IAC are up 4% to $135.12 on Friday at publication time.