“Whether out of fear, data, or opportunity, companies are clearly cutting spend well ahead of the consumer,” he wrote in IAC’s second-quarter shareholder letter. And more recently, consumer spending seems to have started to follow suit, he added. For fans of IAC’s rebuild, which now includes the fold-in of its recent acquisition of media conglomerate Meredith Corp., second-quarter results showed mostly disappointing progress.

IAC said digital ads via Dotdash Meredith, which comprised about 17% of the company’s overall revenue in the second quarter, fell 7% year over year in the period, hurt by macro headwinds impacting retail, consumer packaged goods and food advertisers’ budgets in particular. The decline in online ads for that business peaked at 18% on year in June; the company’s shareholder letter showed declines easing some in July, after the quarter ended. Weighing on Dotdash Meredith’s quarterly results overall, IAC also cited softening consumer demand and integration issues like site migrations and sales force consolidation.

A bigger sign of consumer spending starting to fall off was in IAC’s home services business

Angi.

IAC said Angi service requests were down 10% in the second quarter and continued to decline in July. Fewer users are ultimately converting to monetizable transactions, according to the company.

Meanwhile, Care.com’s revenue growth continues to slow at just 10% on-year in the second quarter, down from 17% the prior period. That business, which allows consumers to book caregivers on demand, was a standout performer earlier in the pandemic, growing more than 50% year over year in the third quarter of last year. IAC noted Care.com’s 30% growth in subscribers through April fell to just 18% in June.

Based on previous results elsewhere this earnings season, IAC’s latest offered little in the way of surprise. But it was also not without hope: Angi posted better-than-expected top- and bottom-line results overall, as a slowing economic backdrop had service providers finally shelling out for ads to drive customer leads again. Outperformance in Angi’s ad business shows how IAC has built in a natural hedge to keep its business afloat even in the worst of times.

Angi’s progress should bring validation to IAC’s overall remodeling plans, even as its most recent bet on digital advertising isn’t looking so savvy right now. After a pandemic and a fairly arduous rebranding effort, Mr. Levin said he finally sees light at the end of the tunnel for Angi, adding with a hint of black humor, “We’re reasonably confident that it’s not another train approaching head-on.”

As further reassurance, IAC has been investing in itself, buying back $59 million worth of stock in the second quarter—its first IAC share repurchases since 2018. With $1.2 billion in cash and no debt on its balance sheet, Mr. Levin said Tuesday that IAC will also be looking for “long-term value opportunities in companies we love.”

It isn’t as though Wall Street had high expectations: Down about 40% this year, IAC’s shares have given back all of their pandemic gains and then some. After peaking at more than $23 billion in February, IAC’s market value has since fallen roughly 70% to just over $7 billion.

That could set up a potential value play for a patient investor: Wall Street is forecasting Dotdash Meredith will generate more than $2 billion in revenue this year. But IAC’s value as of late July suggests the market is only ascribing around $600 million to that business, according to a sum-of-the-parts analysis by J.P. Morgan analyst Cory Carpenter, which compared the value of IAC’s businesses before and after the Meredith acquisition.

No one ever expects a renovation project to proceed perfectly as planned. At least the foundation on this one isn’t broken.

Write to Laura Forman at laura.forman@wsj.com