People Inc.'s web visits fell 25%. Why did digital revenue rise?

People Inc. recorded 25% fewer visits to its network of websites in Q3, yet digital revenue rose 2%. A growing licensing business is helping the publisher earn money without bringing readers directly to its own sites.

That shift matters for People Incorporated, the Nasdaq-listed parent formerly known as IAC. Its publishing brands include PEOPLE, Allrecipes and Investopedia. Falling advertising and print revenue are putting more weight on other ways to make money from those brands.

The licensing gain was bigger than the advertising loss

Digital advertising revenue fell to $161.9 million from $175.3 million. Meanwhile, licensing and other revenue rose to $52.7 million from $35.4 million.

Research by Ticker Byline shows that the $17.3 million increase in licensing and other revenue more than offset the $13.5 million advertising decline. A smaller increase in performance marketing helped bring total digital revenue to $288.5 million, up $5.4 million.

The licensing category includes brand agreements, Apple News+, content syndication and AI-related partnerships. It is broader than payments for training AI models. The company pointed to improved performance from Apple News+ and syndication partners, alongside its Meta partnership.

People Inc. attributes the worsening traffic decline to changes in search and content discovery, including AI-oriented search features. Total visits across its network fell to 1.794 billion from 2.377 billion. Visits to its core group of sites fell 26%.

Revenue held up better than adjusted profit

Digital adjusted EBITDA, a profit measure before interest, tax, depreciation, amortization and selected other costs, slipped 2% to $72 million. Higher marketing spending, compensation and software costs weighed on adjusted digital profit. GAAP digital operating income rose 27%, helped by lower amortization and last year's severance expense.

Print revenue fell 16%. Including print and other publishing costs, People Inc.'s adjusted EBITDA declined 7% to $70.4 million.

The parent now expects annual digital revenue growth in the mid-single digits, versus its earlier mid-to-high-single-digit expectation. Its overall annual adjusted EBITDA forecast narrowed to $263 million to $283 million from $255 million to $290 million, leaving the midpoint almost unchanged.

Staff cuts and a separate MGM loss

People Inc. carried out staffing reductions on October 29 and expects $15 million to $20 million of severance expense in Q4. The parent is also consolidating corporate functions with the publishing business.

People Incorporated's much larger GAAP net loss of $687.5 million was heavily affected by a $1.12 billion unrealized loss on its MGM Resorts investment. That reflects the changing value of shares it holds, separate from the publisher's operating result.

Operating cash from continuing businesses improved to $105.6 million for the first nine months, versus almost zero a year earlier. The earlier period included $47.4 million of office-lease payments, which helps explain the improvement.

The People Incorporated company profile follows the publishing shift, cash, debt and forecasts, alongside completed asset sales and the withdrawn MGM takeover proposal.