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Table of Contents As filed with the Securities and Exchange Commission on May 7, 2021 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2021 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________to__________ Commission File No. 001-39356 IAC/INTERACTIVECORP (Exact name of registrant as specified in its charter) Delaware 84-3727412 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 555 West 18th Street, New York, New York 10011 (Address of registrant's principal executive offices) (212) 314-7300 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of exchange on which registered Common stock, par value $0.001 IAC The Nasdaq Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐ 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 ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of April 30, 2021, the following shares of the registrant's common stock were outstanding: Common Stock 83,347,548 Class B common stock 5,789,499 Total 89,137,047 TABLE OF CONTENTS Page Number PART I Item 1. Consolidated and Combined Financial Statements 3 Consolidated Balance Sheet 3 Consolidated and Combined Statement of Operations 4 Consolidated and Combined Statement of Comprehensive Operations 5 Consolidated Statement of Shareholders' Equity 6 Combined Statement of Parent's Equity 7 Consolidated and Combined Statement of Cash Flows 8 Note 1—The Company and Summary of Significant Accounting Policies 9 Note 2—Income Taxes 14 Note 3—Business Combination 15 Note 4—Financial Instruments and Fair Value Measurements 16 Note 5—Long-term Debt 22 Note 6—Accumulated Other Comprehensive Income (Loss) 23 Note 7—Earnings (Loss) Per Share 24 Note 8—Segment Information 25 Note 9—Financial Statement Details 30 Note 10—Contingencies 32 Note 11—Related Party Transactions 33 Note 12—Subsequent Events 34 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3. Quantitative and Qualitative Disclosures about Market Risk 57 Item 4. Controls and Procedures 58 PART II Item 1. Legal Proceedings 59 Item 1A. Risk Factors 61 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 64 Item 6. Exhibits 65 Signatures 66 Table of Contents PART I FINANCIAL INFORMATION Item 1. Consolidated and Combined Financial Statements IAC/INTERACTIVECORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) March 31, 2021 December 31, 2020 (In thousands, except par value amounts) ASSETS Cash and cash equivalents $ 3,915,548 $ 3,476,188 Marketable debt securities — 224,979 Accounts receivable, net 293,350 270,453 Other current assets 175,937 147,630 Total current assets 4,384,835 4,119,250 Building, capitalized software, leasehold improvements and equipment, net 279,501 278,251 Goodwill 1,853,513 1,879,438 Intangible assets, net 387,781 405,840 Investment in MGM Resorts International 2,242,698 1,860,158 Long-term investments 306,198 297,643 Other non-current assets 281,753 294,860 TOTAL ASSETS $ 9,736,279 $ 9,135,440 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Accounts payable, trade $ 93,377 $ 92,173 Deferred revenue 297,580 275,093 Accrued expenses and other current liabilities 385,987 383,562 Total current liabilities 776,944 750,828 Long-term debt, net 705,987 712,277 Income taxes payable 6,590 6,444 Deferred income taxes 76,758 52,593 Other long-term liabilities 221,139 230,378 Redeemable noncontrolling interests 702,841 231,992 Commitments and contingencies SHAREHOLDERS' EQUITY: Common Stock, $0.001 par value; authorized 1,600,000 shares; 83,342 and 82,976 shares issued and outstanding, respectively 83 83 Class B common stock, $0.001 par value; authorized 400,000 shares; 5,789 shares issued and outstanding 6 6 Additional paid-in-capital 5,660,730 5,909,614 Retained earnings 1,023,170 694,042 Accumulated other comprehensive income (loss) 4,149 (6,170) Total IAC shareholders' equity 6,688,138 6,597,575 Noncontrolling interests 557,882 553,353 Total shareholders' equity 7,246,020 7,150,928 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,736,279 $ 9,135,440 The accompanying Notes to Consolidated and Combined Financial Statements are an integral part of these statements. 3 Table of Contents IAC/INTERACTIVECORP AND SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended March 31, 2021 2020 (In thousands, except per share data) Revenue $ 875,988 $ 684,124 Operating costs and expenses: Cost of revenue (exclusive of depreciation shown separately below) 245,681 179,327 Selling and marketing expense 344,266 308,207 General and administrative expense 177,431 173,741 Product development expense 82,410 61,963 Depreciation 19,301 15,492 Amortization of intangibles 18,726 45,759 Goodwill impairment — 211,973 Total operating costs and expenses 887,815 996,462 Operating loss (11,827) (312,338) Interest expense (6,680) (2,217) Unrealized gain on investment in MGM Resorts International 382,540 — Other income (expense), net 13,650 (57,448) Earnings (loss) before income taxes 377,683 (372,003) Income tax (provision) benefit (48,782) 41,432 Net earnings (loss) 328,901 (330,571) Net loss attributable to noncontrolling interests 227 2,372 Net earnings (loss) attributable to IAC shareholders $ 329,128 $ (328,199) Per share information attributable to IAC Common Stock and Class B common stock shareholders: Basic earnings (loss) per share $ 3.70 $ (3.86) Diluted earnings (loss) per share $ 3.46 $ (3.86) Stock-based compensation expense by function: Cost of revenue $ 32 $ 18 Selling and marketing expense 1,538 1,276 General and administrative expense 18,068 33,646 Product development expense 3,064 2,241 Total stock-based compensation expense $ 22,702 $ 37,181 The accompanying Notes to Consolidated and Combined Financial Statements are an integral part of these statements. 4 Table of Contents IAC/INTERACTIVECORP AND SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENT OF COMPREHENSIVE OPERATIONS (Unaudited) Three Months Ended March 31, 2021 2020 (In thousands) Net earnings (loss) $ 328,901 $ (330,571) Other comprehensive income (loss), net of income taxes: Change in foreign currency translation adjustment 11,017 (6,630) Change in unrealized gains and losses on available-for-sale marketable debt securities (2) (12) Total other comprehensive income (loss), net of income taxes 11,015 (6,642) Comprehensive income (loss), net of income taxes 339,916 (337,213) Components of comprehensive (income) loss attributable to noncontrolling interests: Net loss attributable to noncontrolling interests 227 2,372 Change in foreign currency translation adjustment attributable to noncontrolling interests (691) 979 Comprehensive (income) loss attributable to noncontrolling interests (464) 3,351 Comprehensive income (loss) attributable to IAC shareholders $ 339,452 $ (333,862) The accompanying Notes to Consolidated and Combined Financial Statements are an integral part of these statements. 5 Table of Contents IAC/INTERACTIVECORP AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY Three months ended March 31, 2021 (Unaudited) IAC Shareholders' Equity Class B common Common Stock, stock, $0.001 par Accumulated Redeemable $0.001 par value value Additional Other Total IAC Total Noncontrolling Paid-in- Retained Comprehensive Shareholders' Noncontrolling Shareholders' Interests $ Shares $ Shares Capital Earnings (Loss) Income Equity Interests Equity (In thousands) Balance as of December 31, 2020 $ 231,992 $ 83 82,976 $ 6 5,789 $ 5,909,614 $ 694,042 $ (6,170) $ 6,597,575 $ 553,353 $ 7,150,928 Net (loss) earnings (673) — — — — — 329,128 — 329,128 446 329,574 Other comprehensive income, net of income taxes 580 — — — — — — 10,324 10,324 111 10,435 Stock-based compensation expense — — — — — 20,668 — — 20,668 2,542 23,210 Issuance of common stock pursuant

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