I think we're ready to get started with our next session. Thanks everyone. I know everyone's switching from room to room. So it's my pleasure to have the team from IAC, InterActiveCorp here. Chris Halpin, CFO. Chris, thanks so much for being part of the conference this year. Delighted to be here. Thanks for having us. Why don't you set the table? You know, IAC is involved in a lot of different businesses, a lot of different ventures. For those who are a little bit less familiar, maybe just take a minute or two and set the table for a little bit of the history of IAC and where it sits today. Certainly. So, the company dates back to the mid-nineties, when Barry Diller started with Silver King, and that grew over time into IAC. And it has always been a company opportunistically focused on growth, where, you know, the term is the anti-conglomerate conglomerate, where we invest in, acquire, build up, and then spin off a variety of growth companies. The mandate is one of great ideas, great growth, great management teams, full flexibility on size, and stage of company, and one where, you know, we are laser-focused on backing businesses and industries that are related to consumer digital experiences, as well as, you know, some enterprise in certain situations. But where you know the company will take share, you know it'll be disruptive, and then also using financial methods where possible to drive incremental value. Understood. So, you know, I tell any investor who asks, but I see that Joey Levin's letters are must-read. They're must-read for me the second they come out every quarter. But Joey introduced this idea of back to basics in the recent shareholder letter, and I want to maybe start with that as what interpretation should investors have of Joey's call to arms of a back to basics, and what that means in terms of operating or capital strategy for the company? Certainly. So, and a bit of this comes out of the froth that we all experienced in the post-pandemic period, where money was basically free, every digital consumer experience was going through the roof. Many business plans broadly in the industry were funded that not were, you know, necessarily gonna make it as capital became dearer. And there was broader loss of focus and metric orientation across businesses. And we recognized it in our own businesses. It. Joey was very clear on that in the letters throughout 2022. You know, the old expression is, the tide pulls in, you can see who is swimming naked. That there were a bunch of different dynamics, but a clear one was the proliferation of initiatives in businesses. There were a lot of activities that some other company was being valued on an incredible multiple of revenue or ARR who were doing this, and so we should do it, even if the unit economics were opaque or debatable, and just general lack of focus or loss of focus. We really drove across our company's prioritization, clear focus on unit economics, and you can hear it in Joey's discussion around Angi as he moved into CEO there. Where do we see the right margins? Where do we see the right LTVs? What are the appropriate long-term CACs, especially when capital went from basically zero cost to, you know, Treasuries at 4% and 5%. You need to reorient your CACs at that point, and LTV to CACs. And just fundamental focus, and when we get back to—irrespective of what the broader macro landscape looks like—when you get back to stability and strengths in the businesses, that allows you to go on the offense and take share as we go into 2024 and elsewhere. Understood. Probably the two dominant themes in the hallways here at the conference this year are the macro environment and artificial intelligence more broadly. You have a unique perspective in that you have a range of businesses with a lot of different industry verticals, exposures in the economy, and we talked a little bit about macro on the last earnings call. What's the current state of the macro environment and how it's impacting your businesses that you're seeing right now? Certainly. So we said this about a year ago, that there was this push-pull between consumers who were still spending strongly and enterprise, particularly last June, July, August, who got very concerned about the macro environment, and you really saw a pullback, be it in advertising or in their longer-term enterprise spend. It's really continued, and it was a question of, you know, sort of the immovable object versus the irresistible force, which wins in terms of the macro? The consumer has held in there well. We talked in the letter about the strength of performance in Dotdash Meredith's performance marketing program, which partly is us taking share, but also strong Prime Day, et cetera. We also see it in our other consumer-oriented businesses. You can see, you know, softness, and this is clear in the dollar store results and others, you know, sadly, from a societal point of view, the higher interest rates and others are having impact on lower income, lower income, more levered consumers. But by and large, you know, there continues to be strength in the consumer. On the enterprise side or the company side. We've said the advertising market and others are, you really have to go down to the industry they're in. Yep. Right now, finance continues to be weak, and that's finance writ broadly with insurance and other categories. They are, you know, buckling down, recalibrating, entertainment, clearly soft with the strikes, streaming, which was, you know, gangbusters a year ago. There are significant pullback in spend. And then other categories, retail, which really froze up over a year ago around Memorial Day, after the Walmart and Target earnings. Retail's pretty solid right now. And then others are doing fine. So, macro, you know, we are not macro folks. We don't speculate, but feels okay, and, you know, could go either way, as we muddle through where we are. Understood. Getting into what you do, which is the operating businesses, maybe we start with Angi. Joey took the helm as the CEO within the last year. Can you talk a little bit about the strategic initiatives in place at Angi, and how they're aimed at sort of addressing elements of demand and supply on that platform over the medium to long term? Definitely. And it's been great for all of us having Joey in the Angi CEO role. He really narrowed it down to four key priorities, which we've talked about in the letter. First of all, improve the pro and consumer experiences. As a two-sided marketplace, you need both of those to be humming. One of our real strengths at Angi is that we believe we have market-leading liquidity, both on consumer demand and our service provider base, but you can't take that for granted, and you have to continue to improve both the product and overall experience quality for the consumer and service professional. We can talk more about that. The second was improve SEO and SEM, and we've been very forward that we ceded significant free traffic in SEO through our rebranding in March of 2021. We were too sanguine on how we were gonna be able to keep HomeAdvisor up as we really got behind Angi. We've ceded that market share to other sources. We're frankly buying that traffic back now. As we drive our SEO and improve our SEM, we will be able to take back a lot of free traffic that we ceded, and that's a major point of focus. The third was rationalize services. Services is a very good offering. It fits certain use cases and categories and certain consumer types very, very well. But like a lot of things, it isn't the solution to every problem, and we've reduced its presence, optimized it. We feel very good about where the services business is now. That's been a lot of work, but you can see the profitability in the last quarter, and we think services as a complementary offering to Ads and Leads is the absolute right model going forward. And then the fourth was OpEx and G&A, and it had just gotten very fat, probably too much. Like a lot of businesses, it ties back to basics with the over-orientation towards revenue growth in certain areas, just, you know, there was bloat and inefficiency. Joey is executing, team are executing on all those. As you said, cost structure and CapEx, that includes capital, too. Cost structure, capital, we feel very good about where we are. Services feel good, making progress on SEM and SEO, although SEO will always be one of the longer poles in the tent. And then pro experience, we talked about the progress we've made on retention on LTV. We expect to continue to advance that. And then consumer experience is a real point of focus. That, that'll be another longer-term effort to improve the product, be predictive about what offering you present to a consumer based on the type of job, prior behaviors, when you, when you present it in the order flow, and overall, quality of app, in-app experience, et cetera. It's a major point of focus. Okay, I want to go deeper on one aspect of something you said there, which is a question we get a lot from investors, is just elements of mix and balance between Ads and Leads and services. How you think the market opportunity is evolving, where there's room for both those offerings in the market, and how you feel about aligning the right opportunity set and the right monetization mechanism against the opportunity set longer term? Definitely. So there would be. This is probably overly complicated, but if you thought about it as a matrix of job type, pro type, and consumer, there will be clusters of better outcomes between Ads and Leads and services. So if you think about a small pro who is active, like a handyman, I mean, we use Angi Services to hang mirrors and hang TVs. I encourage all of you to do it as well. Those types of things where highly, very, very light standard deviations in terms of expected complexity, outcome, time, and the pro does not have to have their own CRM effort. They can essentially schedule their day through Angi Services. and not deal with consumers. There is very little reliance on third-party products, supply chain issues, those things. That's perfect for services. As you get into more visits, longer term, more customization, that was really the misstep we made of thinking services could apply to that and apply successfully when you're quoting a fixed price, where you're customizing, where you have delays, supply chain, et cetera, that is where your margin just gets eaten away over time across the base. Ads and leads, perfect on, you know, more interactive projects, ones where you'd wanna talk to one or more pros, those where the pro is going to have to schedule around multiple jobs or is managing a larger, more complex employee base, or contractor base there. So we really believe you need all three to serve pros and to serve consumers in the best way. And we think we'll continue to get better at serving the right up to the right of those offerings up to the consumer in the right setting, and having pros. And we talked about onboarding pros and not overwhelming them with flow the day they start. There's also elements of when they have messaging turned on, and those things will continue to get better in the pro experience so that they end up in servicing the right or being served the right leads or servicing the right jobs, and also that they're getting the ROI they want. Okay. It was interesting in the last shareholder letter, there was mention about the international business at Angi now being run by Jeff Kip. You know, those like me, who've been around IAC a long time, remember Jeff. So it was interesting to both see a mention of, of him and his team and the running of the international business they're going through right now. Talk a little bit about why you decided to highlight what's going on and the momentum around international, and maybe what some of the key learnings are that you're hoping to bring from the international business into the wider Angi. I think part of it was, it's a segment of the business that is performing very well. It's a growth driver, the- both the revenue growth and profitability growth there were real, and it was a bit to get ahead of questions about it and say, "Look, this business is performing well," and, you know, get that across. Additionally, credit to Jeff and his team, they did a lot of hard work where HomeAdvisor International was the combination of multiple disparate businesses, really on a countries, by country basis, acquired properties that were on disparate systems. They did the hard work to re-platform them, and that. It's ongoing. You know, they've got one left to get them on the same platform, eliminate duplicative systems, use best in breed relative to the breeds that were in the existing portfolio. They have had very high ROI from that. That is a point of focus that Joey has had of, you know, the Angi, HomeAdvisor, Handy acquisitions that have been done. There are elements of integration and replatforming and alignment that have led to—that haven't been done, also led to Kludge pro and consumer experiences, and is something he's very focused on improving and driving to improve the product. You know, those elements. There are elements of the European business which probably are less applicable. I mean, everything's distinctively local about how European consumers, or German consumers specifically, are used to contracting for home services. But the element of integration and common platforming is one that, you know, Joey and team are very focused on. Understood. The other question we get a fair bit, just to round out the Angi discussion, is the building blocks of profitability. As you look out over the next couple of years, we talked a little bit about the mix shift of Ads and Leads versus services. How should investors be thinking about the structural margin dynamic behind some of those offerings and how they build to a broader margin narrative for Angi overall in the years ahead? Yeah, we haven't given guidance on overall forward profitability. We have said we expect to return to revenue growth in 2024. Clearly, Ads and Leads is the largest source of profit. The gross margins there are exceptional. We've talked about the margin dilution we've had there from the step backs in steps back in SEO due to the rebranding. As we return that to growth, the incremental margins there are very high, and so that we'd expect that to be a profit driver and a creative element. We feel good about where we've gotten on gross margins, contribution margins, and overall profitability at services. And that is a continued. We think as we scale that, we will see, you know, a positive feedback loop in terms of profitability there. And then we'll continue to look for opportunities to optimize fixed costs, SG&A, et cetera. You know, we talked about with the sales force, the pro-facing or supply-facing sales force there, in the deep dives Joey has done, there was a recognition that given the size of our, what our sales force had been, there were people who had to keep themselves busy, who were calling, what you basically knew at the outset were low-value pros, to acquire them, who would then churn and be dilutive to the overall results. Shrinking the sales force, which reduces cost load, actually will also improve retention in those dynamics. And one of those dynamics where I think, you know, activity was being confused with progress. We'll continue to look for those opportunities. Okay. Turning to Dotdash Meredith. You know, obviously you did the acquisition. You're aiming after what you believe the digital advertising opportunity is for Dotdash Meredith, medium to long term. Talk a little bit about the macro impacts we're seeing in the business now against the broader efforts, which are integration, realignment of assets, and capturing the digital opportunity, and a bit about the journey you're on with, with Dotdash Meredith. Definitely. The. You know, last year, and this has been well documented, and we were very forward in the letters, there were two headwinds last year for the business. The ad market, which was chugging along, you know, really fell out of bed in late May, particularly in retail, CPG, home, which are big categories for us. And then it was kind of a, you know, up-and-down pattern through the rest of the year, where certain things would come back a little and then another would fall out of bed due to inflation or supply chain. And then basically starting late November, nobody bought anything. Yeah. December was, you know, definitely, winter for the digital ad market, as has been well documented. The second factor was the integration, which, the combination closed December 1, 2021. The original plan was to get all the properties migrated over by shortly after the Fourth of July. That was too aggressive, partly due to an assumption that we'd be able to bring on a lot of short-term resources to manage that migration, and the reality was, in the job market, nobody was jumping up and down to do that. So it got extended. There were also some unexpected complexities that got worked through, but it really didn't get done until the integration and moving the Dotdash, the Meredith properties over to the Dotdash platform, really didn't get done until, you know, late October, November. That's all behind us. We feel very good about the integration, where we are from an ad tech stack, from performance of the Meredith sites, and we've been consistent in saying we see the improvement. The Meredith brands are even better than what we thought we bought, and we see the improvements on those properties when you apply the Dotdash playbook and just give consumers a better experience. The ad market continues to be choppy, and, you know, we feel like we're holding serve, but. In some cases, you know, versus open CPMs, outperforming on a year-over-year basis. But we're not expecting things to dramatically turn around and are just focused on taking share. What has been a real positive and was a core thesis of the acquisition is performance marketing, and particularly e-commerce integrations into performance marketing. That's a major strength of Dotdash, and the belief was, if you brought Dotdash's best-in-class e-commerce integrations, marketing, you know, performance marketing relationships, et cetera, to the Meredith brands, be it Better Homes and Gardens, Southern Living, Food & Wine, you could unlock major revenue stream. We talked about how strong performance marketing has been, and, and we think we missed the holiday season from any of this last year because of the delay in the integration, bullish about where we will be and the share we'll take going forward. Maybe just to follow up with one, just to tease that out. In terms of the broader ad environment, that's outside of our control of when that might get better. In terms of a mixture of integration and execution and strategy, are you pretty much with all the pieces in place to see that come through once the ad environment improves, or is there still some work on strategy and integration? Was a, you know, talent was a bit of a headwind in the mergers out of the. From Meredith in certain areas, and statistically speaking, if one thing is 2.5 times the size of the other, you expect to, something will shake out there. That didn't play out. We got some great people, you know, Mike Riggs and others in different areas that have done well, but broadly, we've really gaps that are running across the board, and then we've brought in additional talent. So we got delayed on that. We feel solid about the team. We'll always look to augment integrating the sales forces, you know, some stops and starts, but we feel good about where we're going to market there. So it's really not about integration. It's about, you know, hand-to-hand combat selling. That's where we think D/Cipher, which is our intent-based campaign management platform, is a differentiator. It's about content- Yeah and continuing to produce fresh, differentiated premium content. And that is the nature of the business. And it's about continuing to optimize product ad performance, performance marketing, all those dynamics. Okay. And just last one on the Dotdash Meredith, just remind folks, what your messaging has been around profitability goals, for that division as you look out over the medium to long term. What should people be keeping in mind in terms of margin structure? So we reaffirm guidance of $250 million-$300 million of adjusted EBITDA for 2023. That, that is, pro forma or excludes, a $45 million non-cash lease impairment that occurred in Q1, that related to, the commercial real estate markets. On a forward basis, we've been pretty clear, the, the incremental digital margins in this business, long term, we'd say, are 55-60%, but near term, given the, the degradation in digital revenues over the last, year, and also where we have the cost structure, we think we'll be in the 80% range. And you can see it in Q, Q1 to Q2. You can also see it in the step down from seasonally from, from Q4 to Q1. And we expect to see continuing profit scale and margin scale, as we bring on digital revenues. You know, we think we, on a digital basis, print, print is its own animal, but on a digital basis, we can get to 35% plus annualized EBITDA margins as we get digital revenue to $1.3 billion, in that zone. Understood. Maybe just go through quickly. We'll try to hit some of the other businesses inside IAC. You know, Care just had a recent leadership change. Can you talk a little bit about that leadership change and what it means for strategy and vision for Care as an asset? Certainly. So Care we acquired, closed early 2020. The focus out of the gate, post-acquisition, was improvement in the core platform that had been heavily underinvested in, and was suboptimal. You couldn't really do what you need to do from a care seeker or caregiver perspective with where it was. Improve trust, background checks, all those activities, and really standardize that, improve discoverability, matching technologies. And then there was a huge tailwind that occurred post-pandemic in the enterprise business. For those who don't know, Care is roughly half consumer, direct consumer, and then say about a third direct relationships with enterprise, where they contract to provide backup care services. Some of your employers are probably Care customers too, employees if they need a sitter on an emergency basis, and there's a variety of models there. The enterprise business, you know, pulled forward probably a couple years of growth coming out of the pandemic in 2021, as everyone was trying to get back to office. Where we are now is, platform is in much better space. We need to improve marketing. That has been suboptimal. We just hired a new CMO there. And we need to continue to improve the user interface, consumer product, all of that, especially to expand our performance in the Instant Book category, where you want a babysitter or caregiver on a two-hour, four-hour, six-hour basis, rather than a long-term relationship. With where the company was, we really wanted someone who's deep in both marketplaces, which is obviously a two-sided marketplace, and both subscription and transactional digital businesses. When we met Brad Wilson, who's the new CEO, he used to run HBO Max, deep experience at Expedia, Disney Streaming, Travelocity, LendingTree, et cetera. He was absolutely perfect and has hit the ground running. And it's really around improving marketing. And he brought on John Buchanan as the new CMO, improving consumer product and taking advantage of what is still an early-stage massive market opportunity where they are the leader. Understood. Switching to Search, you actually moved Tim Allen from Care to Search. You talked about search trends being, I don't want to put words in your mouth, but sort of stabilizing on the last earnings, was the way I interpreted it. Talk a little bit about the Search business going forward and that management change there and what it means for strategy. Definitely. You know, Tim has deep experience across the IAC portfolio. You know, did a nice job post-acquisition of Care and repositioning that business, and then before that, across Mosaic and Applications and others. Search, you really need to go a level down when you look at the historical financials. So the desktop business was wound down as we cut marketing there. Had a large run off of revenues, which was hugely accretive from a profit and cash flow perspective, but we knew it was going to, you know, be asymptotic to zero. That's happening. The core search business, we feel solid with where it's been. You know, and you can see that in some of the trends on the Q2 results. That's a business that you're always, they're always gonna have to reinvent certain parts of it, find new opportunities. They've been excellent at it throughout our ownership, and it's a constantly evolving footprint, and they're very good at it, and we think Tim is the ideal leader to, you know, manage the base, innovate, figure out new ways to optimize and continue what has been a free cash flow machine. Okay. And then rounding it out, you've got some, you know, sizable minority equity investments in two areas, MGM and Turo. Number one, love to understand a little bit of an update on those investments and how you're thinking about them for the medium to long term. And then maybe a second partner to bring us home would be, I don't think you and I have ever had a conversation that doesn't involve capital allocation. So I'll squeeze that in at the end as: how does that give you an indication of how we should be thinking about broader capital allocation within IAC? Because I think those stakes in particular always strike investors as sort of interesting within the broader portfolio. Certainly, I'll try to do that in four minutes There you go. If you give me any time. So, MGM has been great. It's a great relationship between Chairman Paul Salem, Bill Hornbuckle, the CEO, Jonathan Halkyard, CFO, all of that. Very close relationship, and Barry and Joey are actively involved there. We are, you know, thrilled with the performance of the properties. Las Vegas really continues to only take share and presence in the national consciousness and in global view of entertainment and hospitality, and it's the best portfolio going there. The digital opportunities, both BetMGM and also what we've done through the LeoVegas acquisition, we feel great about. And then, Macau, post, you know, the relaxation of the zero COVID policy in China is reminding people it was the biggest gaming population in market in the world, and this is after the. We got through re-licensing and the regulatory overhang that was there. That business, you know, we are excited about and view as a long-term value creator. Turo obviously has an amended S-1 file. There's speculation about an IPO. We love that business. It is, Andre and team have continued to perform, and we are very excited about the opportunities in front of it. We can't say a lot given what's there, and we'll be supportive of the company whichever way they go with their capital structure and IPO listing, et cetera, and are the largest shareholder there. Capital allocation, you know, we love to control things where we have minority stakes. There are a few important dynamics. One is, believe in the base business. Two, believe that there is a digital disruption conversion opportunity where IAC's knowledge and skills fit and will be value-added. Three, if you're gonna do a minority deal, you have to believe in the management team because you're not able to, you know, make the change. So have strong confidence in management. And four, something where we can be the largest shareholder and you know have the kind of influence that we you know humbly like to have. MGM was sort of a serendipity in terms of those things coming together. Turo, we're the largest shareholder. I think broadly, we'd always prefer control and the dislocations or disruptions that have occurred post-pandemic and with rising cost of capital create smaller companies, create roll-up opportunities, create, you know, mid-cap public companies, et cetera, that present opportunities. We'll look to add to the portfolio and, you know, just challenge of wrestling fish into the boat with volatile, broader valuations. Finally, I'd just say we always look at our own share price as well as Angi's in any capital allocation and where do we expect the highest return. You can see we bought back, for us, a considerable amount of shares in the first quarter going into the second quarter. Most we bought back in about seven years. We'll continue to analyze that in the current market environment. Understood. Well, really appreciate the time. Please, join me in thanking the IAC team for being part of the conference this year. Thank you very much.