Welcome to the IAC and Angi fourth quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Christopher Halpin, Executive Vice President, CFO and COO of IAC. Please go ahead. Thank you. Thank you. Good morning, everyone. Christopher Halpin here. Welcome to the IAC and Angi Inc. fourth quarter earnings call. Joining me today is Joey Levin, CEO of IAC and CEO and Chairman of Angi Inc. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter, which is currently available on the investor relations section of IAC's website. We will not be reading the shareholder letter on this call. In addition, Angi has published an earnings deck this quarter, which is currently available on the investor relations section of both IAC and Angi's respective websites. I will shortly turn the call over to Joey to make a few brief introductory remarks and then walk through that Angi earnings deck. We will then open it up to Q&A. Before we get to that, I'd like to remind you that during this presentation we may discuss our outlook and future performance. These forward-looking statements typically may be preceded by words such as we expect, we believe, we anticipate, or similar statements. These forward-looking views are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in IAC's and Angi Inc.'s fourth quarter releases and our respective filings with the SEC. We'll also discuss certain non-GAAP measures, which as a reminder, include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during the call. I'll also refer you to our releases, the IAC shareholder letter, the Angi deck, and again to the investor relations section of our respective websites for all our comparable GAAP measures and full reconciliations for our material non-GAAP measures. Let's jump right into it. I will turn it over to Joey, who will walk through the Angi earnings deck. Thank you, Chris. An d also congratulations, Chris, on the new responsibility. Hopefully everyone saw Chris added the new responsibility of Chief Operating Officer to Chief Financial Officer, and he's been a incredible addition to the team since he's been here, and we're excited about the new responsibilities. We changed up the format a little bit here to walk through this Angi deck, so hopefully everyone has access to the deck in front of them and I'll take you through page by page. What we wanted to accomplish here is give you a sense of how things are going there and where the focus is, since I've moved over to Angi a few or added, I should say, Angi a few months ago, to my responsibility. I'm gonna start with page three here. Past the title page and past the safe harbor statement. We're on page three, which is I think the most important slide we have. What you see here is the importance of One Angi. This gets to our history, how we got here, and what we offer our customers, and our customers are both the consumers and the service professionals. We've been in this business now over 20 years. Starting with Angie's List, which was a directory which gave you, the consumer, all the information of service professionals in a category and the ratings and reviews and a trusted source for that information. We also had HomeAdvisor, which matched homeowners with service professionals based on exactly what the homeowner wanted to get done and exactly what the service professional was capable of doing. Then we added Handy, which allowed a homeowner to book and pay for a job online and let the platform do the rest of the work. That is the collection of work that or the collection of things that a homeowner could do in the life cycle of trying to get a job done for their home. Now that's all available on one platform. That's also all available in one brand called Angi and one product called Angi. Same is true on the service professional side. Service professionals we've learned want to engage with our platform and with homeowners in different ways. Some just want a presence online that we help them manage, where they can manage their ratings and reviews, and to pay a fixed price per year and just get a steady flow of customers from that, and they don't want the variability. That's what was historically the Angie's List product, and now that's a fixed annual contract product. There's also the pros who say, "I only wanna pay for a very specific kind of job and a very specific kind of customer." That was historically the HomeAdvisor product, and they can do that variable, no commitment product now with Angi. Then there's the folks who maybe aren't great at selling or who aren't really interested in selling, they just wanna do jobs and that's the historical Handy product now also available at Angi, where they can get fully paid for fully scoped jobs. We schedule it, we book it, they just show up and get the job done. No one else offers that full suite of products. The ability for a homeowner to do all those things in one place and a service professional to buy all those products in one place is a very unique and special offering, and that's what One Angi does, and that's what One Angi is going to do going forward. If I turn to the next page, you can see that that collection of things also makes us the biggest in the category by a pretty wide margin. It's not just on revenue where we're the biggest, which is shown on this page. It's also in brand awareness. Even with the new brand, our brand is much better recognized than any other pure play brand in the category. That's a real asset that we have. That scale in revenue is also really important to the customer experience. Liquidity is the most important thing in this category. When I say liquidity, I mean the ability for a homeowner to find a pro who's likely to be able to get the job done, and I mean for a pro to find homeowners who can fill their book of business. That liquidity is essential to engagement on the platform, and that the scale of revenue is evidence of that. It's also really important for innovation. To have this much revenue allows us, and this much scale with homeowners and service professionals allows us to innovate and experiment with new products. You saw us do a lot of that in 2022. Not all that experimentation works, not all that innovation works, but we are constantly innovating here, and having such a large surface area for innovation is also a real asset. If I go to page five, I just wanna show you how we are organized now. We're doing this both to show clarity on how the business works, clarity on where we're investing, and also indicative of how we manage the business. You can see here that Ads and Leads is... I'm gonna focus on two segments Ads and Leads and services. you can see here Ads and Leads is vast majority of the revenue and more than all of the profits. That's a great business with great potential, which we'll get into. And the second piece is to focus on Services. This, while shown here on a net basis, which is comparable to the Ads and Leads business. It's a smaller portion of the business, but it is a very, very important part of the business, a very important part of the customer experience, and a very important part of our future. We invested a tremendous amount in that business over the course of 2022 and prior to 2022. We are now past that peak investment. We are still going to invest a little bit in that product and deliver what we think is a very compelling customer experience. The fundamental difference between Ads and Leads and Services is on the Ads and Leads side, the service professionals pay us to find customers, and on the Services side, we pay the service professionals. We find the customers, we collect the money from the customers, and then we pay the service professionals to get the job done. Again, some pros want the Ads and Leads product, some want the Services product. We want all of them to be able to work on our platform. Within Ads and Leads, as I mentioned previously, some service professionals pay us on a variable basis, meaning with no commitment per lead, and some pay us on a fixed basis with an annual commitment. Again, each of those products works for some professionals and not for others, but are essential to the overall mix. If I go through the rest quickly, you see roofing was a substantial investment in 2022. We really lost an embarrassing amount of money in roofing last year. That will not continue. We've got that business profitable now, and we expect that to be profitable going forward. Corporate is our overhead. That will be an expense area for the indefinite future. Not quite as much as we spent in 2022, but there is corporate overhead to this business. International, I'll touch on only briefly to say that that continues to provide real option value for us. Sort of too small to matter today, but we do have a leader in each of the countries that we're in. We've been consistently moving that onto a common platform and getting efficiency out of that business. That gets us to total Angi earnings. I'll flip to the next slide now, slide six, to focus on Ads and Leads for a moment. Ads and Leads is a profitable business and we think continues to have real upside. You can see 2021, the business was declining. That was a result of most significantly the rebrand, where we lost a lot of free traffic, and free audience and lost some marketing efficiency. We lapped that. We got back to growth over the course of 2022 and expect to be able to continue to grow. There was also a big impact in that business in the pandemic, where we had a significant demand glut. If you're selling Ads and Leads, meaning you're offering to help service professionals find new customers, in a time when there's a reduction in service professionals because some stopped doing business through the pandemic, and you have a growth in homeowners looking for work to get done, selling advertising is not the best place to be. We're now also past that. The supply-demand has come more into balance. Again, you can see that through the revenue. On the profit on the right side of the page of adjusted EBITDA, we're digging our way out from the declines in free traffic, and you can see that growth trajectory and profit on this business looks very nice. Again, we expect that to continue as we drive marketing and other efficiencies through this business. Switching to Services, which is now page seven. We really experienced the opposite in the demand glut in this business in that we could absorb that incremental homeowner demand and with price and find service professionals to go get the job done. We also grew this business through tremendous investment and significant exposure on the site. You see 2021 was really exceptional growth, and that continued in 2022. There's a few changes that we're making to this business that will change this growth trajectory. We're moving out of the complex services. In our Services business, we had sort of lower average order value services, which will continue and is a nice profitable business. We had the more complex services which we've had trouble generating profit in, and it's hard to touch a lot of consumers in the more complex services business. We've moved out of that business. You can see on the right side profit, we started to pull back on some investments towards the end of 2022, and now most of that will come out in 2023. Q4 was an anomaly with some one-time expenses, you can see that the losses in this area have been faring over the course of the second half of the year. I'm now going to page eight, where the question that we asked ourselves internally, and we've certainly gotten externally, is why do the Services business at all? Is this a good business? Is this important to the future? Again, the answer on Services is yes, absolutely essential to the future. Here's why. Starting on the left side of the page. 100% of Services now, this is not true in 2022, going forward, 100% of sServices will be priced online. That is what a homeowner wants. When homeowners begin their search, when they begin to explore whether they wanna get a job done, the first question on their mind is how much will it cost? With our the services that we are now focused on and the categories we are now focused on, 100% of those can be priced online. Second thing is repeat rate, and this is a theme for the remaining items on the page. All these metrics are ones where we've been trying to move them for years and years on the Ads and Leads business, and when we deliver the right experience and services, we know we can deliver them in aggregate. On repeat rate, we see a 2x repeat rate in Services. That is a phenomenal thing to be able to drive if we can drive more customers into this experience. That means that they are getting a good experience because they're coming back more often. You can see that same thing on the next item, which is the Net Promoter Score, greater than 50. You don't see Net Promoter Scores greater than 50 in this category. We're able to deliver this. When we get a Services job done, we are able to deliver that kind of Net Promoter Score. Again, that shows up back in the repeat rate, sorry. The last is mobile transition. Very important for us in driving repeat rate, in driving customer satisfaction, in owning the customer experience, in bringing the customer back and not having to buy the customer repeatedly. Driving mobile install is very important, and we are seeing a 5x increase in that mobile transition when we deliver services. The next question you get to is, okay, but can you deliver all these wonderful things profitably? The answer to that question is yes, if you look at the right side of the page. In terms of the value per job, starting with the value per job of $230 in Q4, you, after the variable cost, you can see we have a positive contribution margin. As we exit complex services and the mix shift changes, that value per job will come down. Actually the contribution margin, because of the relative profitability, the contribution margin will come up over the course of 2023. The other thing that's just important to mention here and relevant to our focus on Services here and focusing on the less complex services, the lower average order value, is we are touching here millions of customers with this product. In the more complex services, we were touching thousands or tens of thousands of customers. We can touch millions of customers with this product, scaling that is really important in delivering this customer experience broadly on Angi. Going to page nine. We have multiple growth levers in the business, we're trying to frame sort of how we think about upside and how we think about growth from here. If you focus on the left side, the changes we made to the brand, we've talked about a lot, had a big impact on the business. We believe that it is possible to get a lot of that back. We tried to frame the size of that. On SEO, we could grow 75% from here if we get back to our pre-rebrand levels of SEO presence. May not be able to get all that back, may be able to get more than all that back, but just in framing it, that's a big upside. In SEM profit, we can close to double from here if we get back to where we were. I do believe that one's more in our grasp to accomplish and is just executing on some fundamentals, which we'll get into. Brand awareness. Obviously, the new brand is new. It is a variation on the old brand, so it takes some benefit from the historic brand, but we can get back to that, and beyond that brand awareness which we previously had, and that flows through in efficiency, really through all the channels. The other thing that really excites me as I dug in deeper at Angi is the right side of the page. I'll actually go from the bottom up. There's the reality that a lot of service professionals have to try out our platform, and it doesn't work for everybody. That's been true forever and will be true forever. The service professionals that it does work for, which is about one in four, reach the one-year milestone. Those service professionals that it does work for stay for a very long time. They stay for an average four and a half years, and they now comprise 60% of the service professionals on our platform. Those are folks who know how our system works, know how to make it successful for them, and can grow their business and have grown their business on our platform. We are very focused on that group of customers and making that group happier. Would we like to get more than one in four through the end of the funnel, through the one year? Yes, of course. I think that we can grow that business by growing the service professionals for whom the product we know works. Going to page 10. We still have real opportunities for efficiency throughout the organization. That's going to impact some of our key metrics, you can see how it has already impacted some of our key metrics. I'm starting with the upper left here. We've been reducing headcount in our sales. Headcount in Q4 was down 21% year-over-year. If you look at the chart below that, transacting SPs was down 12% year-over-year. While we are declining transacting service professionals, we are spending less to get them. We are having a smaller sales force to be able to get service professionals onto the platform. That means we're focused on getting the right service professionals onto the platform. Service professionals for whom the product is more likely to work, who can spend money, who can deliver a great customer experience. You can see that spending money in revenue per transacting SP, which is up meaningfully year-over-year. If we shift to the right side of the page, I think we have similar opportunities for efficiency on advertising expenses. You can see here, our advertising expenses as a percent of our total Ads and Leads revenue. In 2021, that went high to 45%. That was the year we did the rebrand, which means we got the least efficiency out of our ad dollars. That improved a little bit in 2022, down to 44%, but we think we have real room for improvement to get to the levels that we've seen previously in this business. Now going to page 11 on cost savings. It's not just in sales and just in advertising where we think we have opportunities for efficiency. We've also cut costs throughout. What you can see on this page is our product development expenses and capital expenditures. We've cut that down meaningfully over the course of the second half of 2022, and you'll see real savings on the cost side in over the course of 2023. That brings us to page 12, which is our outlook from here, which maybe I'll take a breath and turn to Chris and then jump back in. Thanks, Joey. As you will have seen in the shareholder letter, we have resumed providing annual profitability guidance. On page 12, you can see our outlook for Angi. Adjusted EBITDA of $60 million-$100 million. I'd note at the high end of that range, that's more than twice 2022 adjusted EBITDA. We also Given the reductions that we've driven in efficiency to drive free cash flow and CapEx, our CapEx guidance for 2023 is $40 million-$60 million, which again, is pretty much down 50% year-over-year. As we discussed, and I'm sure we'll discuss more, Services is switching to net revenue reporting because of changes in the terms and conditions in those agreements with customers. To help you in forecasting the business, we wanted to give first quarter guidance on revenue of $370 million-$400 million. At the midpoint of that range with Services net, that is basically flat year-over-year. We would point you to the grids and metrics section of our earnings release, wherein you'll see good pro forma data that lays out 2021 and 2022 quarterly revenues and financials for Angi on a net revenue basis if services had been present book net historically. With that, I will turn it back to Joey. Thank you. Let's go right to questions. Mark? Operator. Operator, all right. Let's go to the queue. Yes, sir. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Today's first question comes from Jason Helfstein with Oppenheimer. Please. Thanks. Hey, guys. Good morning. Joey. Hey, Jason. Everybody likes a sequel. Hey, everybody likes a sequel because consumers know what they're getting, and the studios usually can predict the returns of sequels better than the original. I'm not sure what the sequel is now with Angi, kind of reboot number three, maybe four. Just given this, A, how are you thinking about the long-term opportunity? It seems like we maybe need to think about a smaller TAM. Since, you know, you're kind of reducing the focus on the big services. Just maybe help us think how you're thinking about the long-term revenue and margin opportunity of the, you know, of the new, of the rebooted Angi. Thanks. Yeah. I could challenge a few things in there. I don't really think this is a reboot of Angi. Let me engage on the TAM first and then come back to the other part. The TAM for Angi is the same that it's been and has been the same for quite some time. Some people say the U.S. market is $400 billion or $600 billion, but let's just stick with $400 billion as the home services market, and that includes the simple services and all the way to the more complex services. We're still servicing the more complex services. We're just not doing that through our Services product. We're doing that through our Ads and Leads product. That's a really actually phenomenal channel for our Ads and Leads product because those leads are very valuable to contractors. We can make real money on that and continue to and have a great customer experience where a homeowner comes to our platform, looks for a service professional who can deliver in those complex services, and we help find them a service professional who can deliver in those more complex services. We're paid on that either on a lead basis or on a fixed annual contract basis from the service professional. That's a great place for us to be. Again, there's a revenue recognition difference, which is if you stick with the $400 billion, pick what percentage you think is spent on marketing. Some say between 10%-20% is spent on marketing. Call that $40 billion-$80 billion. That's still the area that we're playing in. It's just booked now as $40 billion-$80 billion instead of the $400 billion. We are still in that. We're still in that with a product that services that customer. We are just not in that example, you know, doing the kitchen or the remodel ourselves or being in the middle of that transaction. Where we're in the middle of the transaction is when it's the smaller, less complex jobs. In terms of reboot and where we're going with Angi overall, we there is no question we overspent in 2022. There's no question we tried a lot of things, some of which did not work. We shouldn't take from that a lesson to not try new things. We should take from that a lesson when you're trying new things to be more diligent and efficient on capital. Really importantly, I said this in the shareholder letter, and I've been saying it a lot internally and will say it till I'm blue in the face, you can't, when you're doing this innovation, new things, lose sight of the basics. We did lose sight of some of the basics around SEO, SEM, fundamental cost management and things like that just 'cause we were in this growth mindset and that growth orientation got away from some of the efficiency orientation. I think you can and should accomplish a balance of both, and that's what we're trying to accomplish now. 2023 is an adjustment certainly relative to that 2022. Okay. Just a quick follow-up. Yeah, go ahead, Jason. If you're not gonna build. I mean, the whole reason you were trying to get into the services where you are the general contractor is because you basically, I think, thought you could get a better take rate, right? Because when you provide Ads and Leads, at the end of the day, you know, there's a diminishment, right? Because the, the service provider has to compete to close that with other service providers, and so you don't get the full cut. I mean, do you agree with that thesis? Just, if the bulk of the business is gonna be under Ads and Leads, we just have to think about kind of a lower conversion rate of that 10%-20% of advertising, you know, over time. Thanks. No, it's not. It's not that. What put us into the Services business was trying to drive the customer experience, trying to be able to get greater coverage in more categories or give the homeowner more options. What that means is, for example, where advertising doesn't work because there's a supply-demand imbalance, you can't go to the service professional and say, "Well, come on our platform, and we'll give you all the leads for free, or even better, we'll pay you to take the leads to make sure the customers get a better experience." What you can do in services is you can price those things to make it attractive to service professionals to service the customer on your platform. What we're trying to get to is more homeowners who come onto our platform have a solution that works for them. We have to do that in an economically feasible way, and doing that in the complex services wasn't working out economically for us. In these other areas, it does, and so we can service more customers with a solution. The other thing is that homeowners, many homeowners, in particular younger homeowners, want to do less work or I should say, are comfortable with the platform doing more work. That means that they trust the platform to give a fair price, they trust the platform to find a reasonable service professional, and they allow us to do that work on their behalf. Yes, that does lead to more take rate in that example. Really what's driving that is having a compelling customer experience, which I think we can deliver. Long-term revenue growth and margins. Okay. On the long-term revenue growth and margins, we think this should be a double-digit revenue grower. Again, 2023 is gonna be choppy because we're removing some empty calories and changing a bunch of things in the business. Kinda after 2023, I think double-digit revenue growth i s absolutely achievable at, with expanding margins. There's a lot of leverage to expand margin. We talked about cost savings and efficiency, much of which we've already realized. We do think that we can grow margins just by incremental revenue on a fixed cost base from here, and that's what we expect in the business. Thank you. Next question? Thank you. Our next question comes from Cory Carpenter with JPMorgan. Please go ahead. Thank you. Wanted to stick with Angi. Had two questions there. First, just hoping you could expand a bit on your expectations around revenue trends, maybe beyond 1Q this year, but not long term. In the nonprofit, you mentioned earlier that roofing has turned profitable, so hoping you could talk about where else you're expecting leverage to come from in 2023 across the different segments. Thank you. Yeah, sure, Cory. Thank you. So we provided guidance of $370 million-$400 million in Q1 net revenue with services in net in the earnings deck. Midpoint, as we said, would be flat year-over-year. I think it's fair to assume similar trends for the rest of the year, with services on a net basis. That's with growth in Ads and Leads, and then some declines in aggregate Services revenue, as we lap, having closed down a number of the complex money-losing services as the year went on. What that results in is we do expect gross profit to grow mid-single digits across the overall Angi business this year, really due to even if total revenue's flat, favorable mix between Ads and Leads and services. As Joey said, we expect to return to consistent net revenue growth in 2024. On the EBITDA side, we do anticipate continued scale in margins and growth and profitability. Part of that is driven by cost savings and marketing efficiencies, and really, you know, the fixed cost leverage that exists in Ads and Leads, which is such a high, you know, gross margin business. Also, and you referenced this, you can see in the segment reporting that our new segment reporting, the magnitude of the EBITDA losses in both services and roofing in 2022 for different reasons, that we've documented well throughout last year. We expect both of those to improve. Joey referenced in his presentation, the continued contribution margin scale per job in Services that will drive profitability. Also roofing, we feel like we've optimized that business and are executing on the post-storm volumes and just have it in a good, steady state as well. Variety of factors will drive growth in adjusted EBITDA, also reduction in CapEx will drive free cash flow. I think that covers it well. Thank you. Next question, sir. Our next question today comes from John Blackledge with Cowen. Please go ahead. Oh, great. Thanks. Maybe pivoting over to Dotdash Meredith, two questions. First one, just thoughts on the 2023 revenue and EBITDA trajectory. Second question, could you discuss kind of the recent traffic trends across some of the key brands I think you highlighted in the letter, and then kind of how traffic should trend as we get through 2023? Thank you. Sure. Thanks, John. I'll start and Joey jump in on. I'll blend those two questions probably together as I answer. Obviously we're, you know, disappointed with the declines in the fourth quarter in digital revenue at Dotdash Meredith. I would say in the later portions of the quarter, particularly December, it is very exogenous of broader market. We feel good about where we are through the integration, that our platform is executing well as opposed to the trends in the summer and early fall. To get to revenue stability, which is our goal, you know, we need stability both in traffic, aggregate traffic, as well as ad pricing. Aggregate traffic volumes across the portfolio is still down circa 5%-6%, mainly driven by real weakness in a number of the historical Dotdash sites that just had large booms during the pandemic and Omicron, Investopedia, The Spruce, others. We feel good about where the migrated Meredith sites are, as we detailed in the chart in the shareholder letter. As the year progresses, we expect traffic to get to stability at some point, and you know, in flat at some point in the second quarter and then grow in the back end. That is due to continued momentum on the migrated Meredith sites, easier comps as we move further past the pandemic, and just general operational improvements. The ad market we describe right now is sort of stable weakness. If you go back to May, June last year, that's when the market first fell out of bed after Walmart earnings and Target earnings. It firmed up in the back to school area, but it really froze in November and December on both the premium/direct and the programmatic side. There was really minimal spend through the end of the year. Since the beginning of the year, market's definitely firmer, than it was, you know, at the end of 2022. It's still below the high levels of spend last year, we're dealing with some particularly difficult comps in January, February last year in categories like health, with the vaccines, finance, where that was booming. Where we are right now is we'd say we're down. CPMs, we feel relatively good about our CPMs versus the market, but we're down, but it's not second derivative negative in the same way it was at the end of 2022. Our expectation is that, you know, the first quarter will remain weak, due both to ad market weakness and tough comps. That'll also, you know, strain our margins at Dotdash in the first quarter as it's seasonally a low month, the lowest quarter of the year, I should say, for revenue. You'll see Stein's also in the ad market of stability in the second half of the second quarter as we lap a weaker market then. We'd look to be able to drive CPMs and improve our performance in the second half of the year. Overall, you know, for the year we both traffic and revenues aim to get to flat at some point in the second quarter and see growth in the second half and drive to growth for the full year. Growth and profitability will come from a couple things. Cost actions we've taken, including a reorganization that we have actioned recently. Also just scale on high margin digital revenues. You know, we don't see the full profitability right now of our much tighter cost structure because digital revenues are depressed, but we should continue to see margin scale throughout the year. Again, Q1 will be soft, driven by the market and smaller revenues. Thank you. Operator, next question. Our next question comes from Ross Sandler at Barclays. Please go ahead. Hey, guys. one more on Dotdash Meredith, and then a quick follow-up on Angi. just high level, we've seen all this explosion of new tools like ChatGPT, and generative AI coming out. I'm just wondering how that might impact Dotdash Meredith. On one hand, you could potentially produce content much more efficiently in the future. On the other hand, SEO traffic might be negatively impacted. just could you walk us through how you're thinking about that and overall impact down the road? on Angi, in one of those slides, there was a stat about service provider retention being 25% or thereabout after year one. kind of surprised it's that low. This kind of laid into the maturity of the Angi platform. how can you improve that SP retention stat? You know, how does that play into the sales force efficiency that you're talking about? Thanks a lot. Sure. Starting with AI, every new technology is a threat and an opportunity, and we certainly think about them in both ways. I think on the Dotdash Meredith side, one of the things we're really happy with is the, in the context of generative AI and ChatGPT, is that we did the combination with Meredith. The reason I say that is because brands really matter, trust really matters, voice really matters. You can ask the bot questions and it's amazing at answering those questions, but it doesn't have a voice, it doesn't have experience, and it doesn't have a brand that stands behind those results. In fact, it sort of goes out of its way to not stand behind those results. I think that's really important in areas like tastemaking, which we're doing with, in a literal sense with food, but also in travel and home and things like that. Like creating new tastes and creating new content around that is really important to have a brand and have a voice, which is what we have at Dotdash Meredith. There's a big difference if you wanna draw the line between commodity content and differentiated content. I think that commodity content, which I'll call, you know, kind of fact-based content, has been threatened or significantly removed from the search engines for a long time. It exists on the search engines and SEO, but generally they hold onto that traffic now. Something like greater than 50% of traffic doesn't leave Google anymore. That's in those fact-based questions where Google can provide the answer or the chatbot can provide the answer. We've been dealing with that, preparing for that and are kind of past that as it relates to the search engines. The format of that may change on the search engine itself, but we're not counting on that kind of traffic and haven't relied on that kind of traffic from the search engines for a long time. You could argue in that context, again, that brand is even more important, voice is even more important. That's why we have to lean into our differentiated content and our differentiated brands. We have to. We're sending people to go see the hotel, sit in the hot tub, check out the view. That's really important. We have people trying the pan, cooking the recipe, tasting the results, seeing what happens when the pan gets too hot or too cold or whatever it is, and putting our brand behind that. I do think that's really important in a differentiated world. There are opportunities there, which I mentioned, that I do think on the cost side and some of the earlier stages of content development, this can help drive efficiency. I think that's true at both Dotdash Meredith and even at places like Angi, where what these bots have helped do is allow individuals to be better at creating content. Like, take a service professional, for example. Instead of having to hire an agency to build a profile and to have the right pictures and imagery and pros, you can use the chatbot to help with that, or we can enable the chatbot to help service professionals to do that, to build out their directory profiles. I think things like that are really valuable uses of the content. Again, like with anything, the technology will evolve, and we'll evolve with it, but we have it certainly front and center in our mind and we view real opportunities for innovation there. On your question, Ross, Oh, no, okay, the second question was year-one retention. I'm not as troubled by it because, again, it's a process to find the ones that work. I do believe there's real opportunity to improve this. Like anything where most of the churn happens is in the first 30, 60, 90 days, there are things we know we're doing in the first 30, 60, 90 days that negatively impact retention that we are going to fix or change. Examples of that are pricing, for example. Pricing is not crystal clear sometimes in how. Or I should not say pricing, I should say spend. It's not crystal clear how your spend will work out in the, in the first 30, 60, 90 days. We're doing things now to simplify that to make the spend much more predictable on a variable product. You can have variable spend in aggregate. We're making changes to make that more clear to customers or prevent those experiences that lead people to overspend and churn. The other thing is efficiency. You mentioned efficiency on the sales side. It's bringing the right pros in, so bringing in pros for whom the product is more likely to work. You can do that by matching supply and demand better. You can do that by matching pricing better. You can do that by matching expectations better. Some folks come in with the wrong expectations, and we gotta make sure everyone comes in with the right expectations. And putting in the systems in place to do that is important to us and something that we're focused on. I do see real opportunity for improvement in some parts of the business. Some certain products, we see that number much higher than 25%, so it's more like 35%. We know what the things are that are working there, so we can try and get to that. That's our a big focus of ours, and I do think a real opportunity for improvement. Thank you. Operator, next question. The next question comes from Brian Fitzgerald at Wells Fargo. Please go ahead. Thanks, guys. From the shareholder letter, the decreased focus on service requests sounds like you may be giving up some near-term revenue in exchange for those SEM/SEO benefits. Anything you can tell us about the expected scale or timing lag effects associated with that? Maybe more broadly, any additional color on tweaks or changes to your SEM/SEO strategy in general? Sure. Look, I think you're right that we will make or we are open to making those trade-offs. It's not clear that that will be a trade-off, but if it is, we are open to it. When I say that, I mean the directory experience. I think what we want is to be able to service the customer throughout their entire journey. Some customers are not ready to transact the moment they come to Angi. They're just looking to do research, and the directory or elements of the directory can help with that. I think our role is to take those customers and start to build the relationship with them, bring them into the ecosystem as opposed to trying to get them to transact in that first moment of that first session. I view that as long-term positive to lifetime value and revenue retention. Whether it's a trade-off or not on revenue, we don't really know. That product will launch or I should say relaunch sometime this year. It also has the potential to increase traffic or even maybe meaningfully increase traffic. If we do those things, that should balance out. There was another component to your question which. Oh, SEO and SEM and the, the things around them. We've had, since I got there, teams focused entirely on SEO and focused entirely on SEM. Sorry, much of that existed before I got there, but the level of focus and the level of resources there has expanded. I'd say that given our focus on this area, where I think our focus was somewhat distracted previously, we are finding real results. Just as an example, we said to the SEM team, and we have some great people working on SEM now. We said, "There's been a decline in a particular area. You have to figure out what this decline is, and there's no answer but figure it out. As long as it takes, whatever it takes to figure it out, figure it out. Lo and behold, this team did incredible work and found that the, there was an area where we were losing conversion and that there was a tracking pixel that was placed in somewhere that slowed down some of our pages, that you pull that thing out and you see a massive increase in conversion. Those are the things that we're just digging in and finding and will yield results. I can give... I will hopefully be able to give dozens of other examples of that over the course of the year. That's the sort of incremental work. It's not the sexy work. It's not necessarily even the most fun stuff, although it is fun to get a win out of these things, that people are doing all day, every day. It is basic work, but it is work that's getting done and yields real results. Again, I expect things like that, fundamental things like page speed and conversion to improve and show up over the course of the year in SEO and SEM. Awesome. Thanks, Joey. Appreciate it. Thank you. Next question. Our next question comes from Daniel Kurnos at The Benchmark Company. Please go ahead. Hey, thanks. Good morning. Joey, you kind of touched on a little bit just on Angi. You talked about it more in the shareholder letter, I guess maybe if we think about your narrowed focus in Services, can you just talk a little bit more about differentiating that offering and kind of winning in that marketplace backed by sort of the new Angi brand campaign, if that's the way? Are there other creative ways to win as you go through that more narrowed focus? On Dotdash, you know, Chris, I know that EBITDA is always a math equation, as you like to point out. We've had incremental headcount reductions. We've had incremental synergies since the acquisition, we know Joey called out some more cost efficiency efforts. I guess the real question is, you know, from a longer term perspective, you did touch on this a little bit, but is there any change to your sort of longer tail expectations for where margins or revenue for that matter ultimately ends up? Sure. I'll start and then I'll turn it to Chris, although I can quickly say no is the answer to the second question. The first question, yeah, it's a great question. There's a few important areas in winning in Services. Obviously, everything starts with having a delightful, intuitive customer experience. One of the things that's happening in Services right now is, again, because we have this orientation around the service request, we put all our customers through the service request, and then they see our experiences after the service request. Even though we exposed the Services business in a lot of areas post-service request, the reality is that 80% of our customers or something like that never see the Services product because it comes after the service request. By the way, once the service request is complete, we ask another series of questions to drive the Services business. You can imagine us showing that much earlier in the process, not pushing the customers for whom it's relevant through the service request and sending them directly into a services experience and exposing that in the categories where we, where we can deliver those less complex services, the lower average order value services. We can expose that actually more often and get more people to see that product and use that product. The most important thing in that area is just getting people to try it. Because again, once they try it, once they complete it, we know they're really happy, we know they come back more often, we know they use the mobile app. The constraint on that is kind of how we're putting it and where we're putting it. The other area is making it clear to customers that all these opportunities exist for them. I think we've confused that a little bit. I think we've shown sort of too many things at once or not enough things at once, and I apologize for this sounding a little bit muddled because I don't wanna get into too much detail on the product. We are capable of delivering the product that we know the homeowner wants. We just have to show them that clearly, show them that when they want it, and not force the entire experience through one funnel, and then on that more narrowed set of customers, deliver a somewhat confused experience. Okay. Yeah, Joey said it, but on Dotdash Meredith, nothing that we've experienced so far undermines our belief in both the long-term profit scale in the business and cash flow generation. It obviously, you know, doing $931 million of digital revenue in 2022 disappointed us. You know, part of that was the integration. If we got it done faster, it was probably, you know, too optimistic. We could have driven our playbook and activities faster. The bigger share was just getting hit hard by the ad market. As we grow revenue, and particularly, as we scale e-commerce and a lot of the high margin, e-commerce integrations, which we're seeing being proven out, by Neil and team, all of those combined with revenues will be highly accretive to profitability, and we feel as good about the long-term margins there as we have at any point. Awesome. Thank you. Thank you. Our next question comes from. Yes, sir. Our next question comes from Youssef Squali with Truist Securities. Please go ahead. Great. Thank you. I have a question on Dotdash and maybe just a clarification on Angi. On Dotdash, obviously, you know, a lot happened since the acquisition happened. I guess as you look beyond 2023 at the long-term growth potential of the business, is it just it fair to assume that that business overall, and I'm just talking about the digital side of it, not the print, should grow generally in tandem with digital advertising? Historically, you guys made the case that you should grow faster because of the content, because of a lack of exposure to things like IDFA, et cetera. Has that changed? Just kind of how should we think about growth beyond just 2023 for that business and maybe drivers there? The clarification is around just the recognition of revenues going from gross to net. Who is the merchant of record here? 'Cause my understanding now is that you're still getting paid by the customer and turning and paying the service professional for some of these less complex services. Wouldn't that imply that you may need to do it on the gross base? I'm just a little confused on that front, if you can maybe clarify it. Thanks. I'll let Chris do the gross to net. I'll just say we are collecting the money from the homeowner, and then we are paying the service professional. It is correct that it has to be recognized in that based on the way the terms and conditions look now, and I'll let Chris do more on that. On Dotdash Meredith and the long-term growth rate, we do expect to grow faster than the digital advertising market, and we should grow faster than the market. Again, right now there's a lot of things going on with the integration and getting us to the right place. All of our content is clean content, meaning it's all created by us. It is safe content. It is not covering controversial topics. It is good, safe, clean places to put advertising dollars at scale, number one. Number two, we don't need personally identifiable information. That is a good trend in our favor. We have intent on our content, and I think that that will make it a good place to spend ad dollars. The other one is that we have performance on our content. That's when we will literally, when people are clicking through and making a purchase from our site to where people are doing research on our site and purchasing later, but they're researching things that they are considering, where they are considering making a purchase. I do think that with that focus, with that intent, with that trend of not needing the PII, I think we're in the right place in this market to be taking share over time. Youssef, from the terms and conditions and revenue recognition, we viewed this as we've been looking to align terms and conditions across our various business lines with Angi for a while. We viewed this resetting, moving away from complex money-losing services and really driving behind simpler, higher volume services as an opportunity to reset a number of things. In aligning the [audio distortion] between Ads and Leads and Services, the accounting literature is clear that, you know, we are not a principal. We're providing the connection, and a number of the customers and pros have, you know, renegotiated or rejiggered services over time based on expanded scope or when they're there. Just formalizing that element. It is, you know, clear that under the literature where we are not a principal, it should be recognized on a net basis. That's gonna be true of Handy? Yes. Yes. Correct. Great. Thank you both. Thank you, operator. One last question. Our last question today comes from Thomas Champion with Piper Sandler. Please proceed. Hey, good morning. Joey, appreciate all the detail around Angi and you digging in there. It sounds like you intend to run the business indefinitely. Just curious if you could update us on your thoughts there. Also, the letter includes some interesting comments around M&A. I'm wondering if you could just flesh that out a little bit. Any thoughts there would be much appreciated. Thank you. Sure. Two good ones to end on. We are not actively searching for a CEO at Angi right now, but that doesn't mean I plan to be in the job forever. I think we wanna get to a good, stable, growing place. When we have that, we can find the right leader for the business, whether internally or externally. We've made some important hires there. We'll continue to make some important hires, which gets a lot more leverage out of me into the business. And as you know, as I said earlier, Chris and others stepping up at corporate to cover other things. Right now that is working, and I'm enjoying the work I'm doing at Angi, and I think we're making great progress. I'll continue to do it as long as is necessary, but that certainly is not forever. That's a good segue to your second question, which is I'm still spending real time on M&A, whether it's for Angi or for IAC generally, and I'd say certainly much more weighted towards IAC generally. We are continuing to look for opportunities. There is. We are not in a rush. We said that last time. We're saying that again. I think we're in this current pricing period for a while. I don't think the market's gonna run away from us on price, and I do think that there are things that are starting to be priced attractively for us. The issue now isn't so much that the price exists out there, it's that the people's willingness to transact. I think willingness to transact becomes much more pronounced as the prior market fades further into the rearview mirror. There has been a lot of volatility in the markets lately and things going up and down very quickly, but that also, I think, generally favors people transacting because they start to realize things can come and go relatively quickly, and it's not the mindset that set in over the last 10 years, which is everything only eventually goes up. I think that there's an adjustment that's happened. I think more time passes, more stuff in the rearview mirror, more ability to transact. We're patiently looking at things and there are real opportunities that hopefully we'll have a chance to transact that. Great. Thank you. I think that does it. Happy Valentine's Day, everybody. Thanks for spending your morning with us. We will see you next quarter. Thanks, everyone. Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.