Hey, good morning, everyone. I'm John Blackledge, Internet analyst at TD Cowen. We're pleased to have Chris Halpin, CFO of IAC here. Thanks for joining today- Thank you for having me. -for our Fireside Chat. Maybe I'll kick off just more broadly to kind of start the year. Strong start. I think Joey said in the Q4 shareholder letter that you guys were gonna try to get back to basics this year, focus on profitability. You had a big margin beat in the first quarter, led by several important segments, Angi, which we'll get into, in a bit, Dotdash Meredith, that's one-time item. How do you feel like management is kind of executing on the goals in 2023? Well, you never wanna let us grade ourselves. That's sort of a setup, but it's a good start. We talked a lot in, I guess, the Q3 shareholder letter about the mistakes we broadly made in the portfolio, and particularly in the really heady days of the pandemic and when capital was free, just in terms of business plans and initiatives. We spent a lot of time rationalizing that. We're very focused in the fourth quarter letter on what we call back to basics, and we said that was the theme of our executive offsite. It's really permeated financial planning, prioritization and really a ruthless approach to what's needle moving, what matters, ignore the junk. Angi, we'll talk more about, we've got four key prongs there. Two of them, rationalizing services and improving the overall cost structure. We've made good progress on, you can see that in the profitability and margins. Care, which is part of the emerging and other category, clearly generating strong profit, as evidenced by the numbers there. You know, Dotdash Meredith, Q1 is always the seasonal low in terms of revenue and as a result, profitability. We feel good about how we position that cost structure and where we'll be for the year. Again, it's early. We feel like we're in the right spot, but we still are as vigilant as ever on performance. Makes sense. Maybe we'll pivot to Dotdash Meredith. You know, maybe you can give an update on kind of how the macro has impacted the digital business, thus far this year, and just remind us how you think top line could trend as we get through Q2 and then in the back half. Definitely. When you think about the last year, which you have to look at relative to the color I'll give on performance this year, Q1 was extremely strong in 2022. It was the full momentum coming out of the pandemic lockdown, you know, all the digital behaviors that have overhung a number of e-commerce and other digital players. Extremely strong on both advertiser demand, traffic and pricing. It stayed that way until around mid-May of last year, and we always look to the Target and Walmart earnings in mid-May of last year, where following their warnings, home, CPG, retail, a number of ad categories just froze, and in some cases, declined 50% year-over-year when you got to June. June was our worst month of digital advertising performance at Dotdash Meredith on a year-over-year basis. Continued to be weak through the summer, started to actually strengthen in back to school and the October program, when I say strengthen, be less negative, sort of second derivative positive, first derivative negative. The market, you know, was terrible in the second half of November and December period, and that was consistent with what advertisers saw. This year, because of those trends, we expected for Q1 to be a tough comp. The term that we have used to describe the advertising market year-to-date is stable weakness, where it's not as bad as it was in the holiday period in 2022. It's down against tough comps, and you see it both in premium advertising, direct demand, but also in programmatic pricing. We sort of say the programmatic market, we have pretty good insight, is down about 10% in aggregate on pricing year-over-year. We expect that to continue, then we should see stability on a year-over-year basis right about now. For a couple reasons we'll talk about, June has always been our, in our mind, moment of truth, key inflection point. Then on the rest of the year, you know, without the ad market improving significantly, we would expect things to be okay. Through the rest of the summer and the fall, it's really a tale of different sectors that are having strength, that are having tailwinds, obviously, travel, but beauty, elements of home are starting to show some strength. You've got other categories that are totally more abundant. Tech, telecom, you know, wireless advertising, things like that, TVs, streaming, all very poor. Finance has been very tough when you compare the strength of brokerage services and insurance a year ago. Banking and interest rate products are coming on, but, you know, still a lot to make up. We just think it'll be without some significant exogenous shock, one way or the other, from a macro basis, kind of stable weakness, but our comps get easier, and on the traffic side, which we'll talk about, we expect it to grow throughout the year. Yeah, maybe that's good segue there. Just to update on the integration of the Meredith business. I think you're seven months or more post kind of migration of the various brands. Could you talk about the traffic and the engagement, the good, and maybe where some brands could see some improvement? Sure. We feel good about where the Meredith brands are now, and we've talked a lot about what the curves look like. They dip after you migrate a brand on a digital property onto the Dotdash platform, get back to even in the, you know, say, four plus, minus months in, and then start to grow. We feel solid on the Meredith brands. We're even getting to the point. At some point soon, we should stop talking about them as the Meredith versus Dotdash brands, 'cause if I'm an investor, I don't really care if my left leg is running really fast and my right leg is slow, I'll just go in circles. They're gonna say, well, you know, are you making progress in aggregate? In terms of proving out the thesis of the acquisition and also, really a specific to IAC growth driver, the Meredith brands are performing well, very consistent with the chart we had in the shareholder letter. Seeing strong sessions growth across Southern Living, Better Homes & Gardens, Travel + Leisure, those properties. People, which has been very strong, we had as green and slash yellow. My wife laughs every time I say this, but that's really because of the. The only reason it's yellow is 'cause of the Will Smith slap, followed by the Johnny Depp trial last year. I'm very happy to report we are on the one-year anniversary of the Johnny Depp judgment today. We will be moving past that major moment in American history- Yeah. -also for traffic. All underlying trends, metrics at People are strong. We feel great about where that property is. The Dotdash properties are a mixed bag, but we're passing what were sort of brutal traffic comps in the first quarter and early and expect to get them to stability and grow. You asked about properties that are underperforming. The reds, you know, InStyle was one where we have struggled to get the right positioning. We have a new editor there. It's, you know, a full digital property now, but digital editor. We feel good about where it is. There were a lot of very low-calorie impressions, basically clickbait, in the historical comps that we're moving past. Mm-hmm. You know, we are down on impressions, and we wanna be transparent with investors on that. We've got to execute there. It's a great brand, just need to improve the game plan there. Parents has been sort of a journey, so to speak. We feel better about where we are there and getting it to growth. Shape is one that we just keep on there for completeness, but it annoys Neil and team at Dotdash that we have it on there. It's a tiny property, and we just have it on there, so not a big deal. We feel good about where we are, and that traffic growth throughout the year is why between that and ad comps getting easier, why we have confidence about getting to revenue stability at some point this month, and then growing in the second half. Yeah. Okay, that's definitely encouraging. Maybe let's pivot to the last one on DDM. Well, there's a couple here, but the profitability as we kind of get through the year. You painted the picture for the top line. If you can talk about the cadence of or progression of EBITDA on the margins, and then I just have one follow-up. Sure. Obviously, revenue down mid-teens, digital revenue down, which is. Well, I'll talk predominantly about digital. Print, just to do it quickly, we manage that, so our print EBITDA roughly offsets our corporate costs. You'll see that in the segments. On the digital side, we knew Q1 would be tough, mid-teens, down mid-teens in aggregate. There are some elements of there. Advertising was, you know, weak in that area. The e-commerce side, or what we call performance marketing, was actually flat for the quarter, and that reflects the strength, and this is a key part of the Dotdash strategy and acquisition of Meredith. Really, rolling out the Dotdash native performance marketing integrations into the Meredith brands, and that has performed extremely well. We talked about, you know, up 30%-40% in aggregate on goods-based e-commerce. The reason we're flat is because services-based e-commerce, brokerage accounts, insurance, those things were down appreciably. That comp will soften as it did last year, throughout the year, so we feel good about momentum there. Then licensing is, you know, in a trough, but will grow. As we get into Q2, we would expect, we expect overall digital revenue to be negative, but less negative. We expect to get to stability or flat revenue at some point this month, and feel good about the trend we're on there. Then in Q3, through both sessions growth and stability on ad sales and pricing of some degree, we expect to see revenue growth in Q3 and then stronger in Q4. The holiday period was so poor last year on the digital advertising side, and then also because of the migration delays, we did not have our full suite of e-commerce activations on the Meredith sites that we feel pretty good, you know, even without significant ad market improvement. As long as it just sort of stays where it is, we feel pretty good about driving growth in the fourth quarter. As a result of that, plus seasonality, which is basically every quarter on a seasonal basis, increases on the prior one in both Dotdash and Meredith, that's why we feel good about our guidance of $250 million-$300 million of adjusted EBITDA, excluding that's with the lease impairment being added back. Mind you, it's non-cash lease impairment, but it leads to a back-ended year, but that's what we'd expect. We reaffirmed our guidance of $250-$300 and feel good about growth in the second half. Any thoughts on longer term, like we exit the year, say, as you guys expect, any way to frame kind of longer-term top-line growth and/or kind of margin profile? How we think about the margin profile, steady state, if we were in an equilibrium environment on a revenue basis, it's about a 55%-60% incremental margin on a dollar of digital revenue. Where we are right now, given the depression in digital revenues and then also the costs that we've taken out of the DDM cost structure, we would be in the marginal dollars, well, about 80% drop down into contribution and adjusted EBITDA. Based on that, our view is, you know, we've talked about long term, especially to get to $450 million of adjusted EBITDA, which was the target at the time of the acquisition. You're talking about $1.3 billion of digital revenue and, you know, mid to high 30s% EBITDA margins to get there. We still feel very good that that model's intact. If anything, we've identified, you know, cost improvements while still being able to drive the business. It's just about, you know, getting digital revenue to stability and then growing it. We feel excellent about the performance marketing opportunity, that's been borne out beautifully. We just wish we could have gotten there sooner. The integration, you know, is behind us. It is what it is, in that we will drive towards those profitability goals. Great. Super helpful color there. Maybe let's pivot to Angi. Stronger quarter than we were expecting, then raised the EBITDA outlook for the segment for the year. Just talk about the progress you guys are making there. Yeah. Joey's now about seven, eight months, seven months into the role as CEO of Angi. In the fourth quarter shareholder letter, he laid out four key priorities. Improve the user experience for both consumers and pros. As a reminder, we have a two-sided marketplace where you have service professionals on one side and consumers on the other. The second is improve SEO, SEM, which we can talk about why that improvement opportunity exists. The third was rationalize services, where we've been overinvested and had, you know, a bit taken our eye off the ball from a margin and free cash flow perspective. The four was improve overall cost structure, where we had the hypothesis that there were significant fixed costs in G&A that had crept into the cost structure, and if anything, it exceeded what we thought going in. Where we are right now is three and four, we feel very good about where we, where it stands. Services went in, and we had the roadmap through work we did last summer and in the fall, but rationalized what works, what doesn't, improved the pricing and cost structure, and we've gotten that business to essentially break even and feel good about the long-term growth trajectory. Overall cost structure found significant opportunities. By the way, you know, think about it on an EBIT basis in terms of capitalized software, found a lot of rationalization and broader product development and a lot of which was capitalized, so that, as Joey talked about in the letter, we've significantly improved free cash flow across the board. The priorities now are improving user experience, improving the platform, the flow for consumers and pros, and improving our SEO and SEM. Game plan's in place for both. When we talk about revenue declines this year, of 5%-10%, with Q2 at the higher end of that, the very high end of that, and Q3 and Q4 at the lower end of that, it really is about... We saw revenues that were embedded in the base within Angi, that had sort of built up over time. Some of them were initiatives that were launched that didn't work that well, but nobody shut down. Others were activities that the market had changed, and then some of them were just, you know, low-margin activities. There were a lot of revenue and through optimizing marketing spend, through reducing selling to low-value pros and a number of other similar paths we're on. We are rationalizing the revenue profile, and it really sets us up to grow long term. This, there's some attendant things in there, like we've shrunk the sales force. Sales force had really grown large during the pandemic. In full, you know, credit or defense to management, where in the pandemic, it was very hard to acquire pros because everyone in the world was having discretionary work done on their house. If you're a service professional and you have a discrete amount of capacity, you don't need to be on Angi or any other platform if the fish are jumping into the boat offline. That's good news for us, is that's rationalized and pros need our platform more, but also we don't need a huge sales force chasing small pros that grew up during the pandemic. Rationalizing, those sales revenues, getting rid of, you know, low margin, acquired traffic, a lot of which produced poor customer experience, where we might not have pros to serve those regions or high discounts and credits. It's just working through and improving the overall revenue picture of the portfolio at Angi. We feel good about margins. We've said, you know, we upped guidance to $100 million-$130 million of adjusted EBITDA. We're free cash flow positive, and we expect to continue to expand on that. We just got to head down, execute, get the revenue, picture to where we want it. Then grow from there. What, in terms of, just maybe one more question, that was great on Angi. On the SEO and SEM, kind of fixing that, how long is that process going to be and- Yeah, it's SEM, there's a few elements. To do them both quickly, but SEM, the key elements there are improving site speed, improving conversion. We definitely, we're underperforming there. That, we're making progress on. We've also relaunched TV and brand, and there's clear flow-through of SEM conversion when you have brand campaigns in place that support awareness and recognition. That one, I'd be optimistic, will happen sooner, you know, in the next couple of quarters. We're already seeing it, but Joey talked about it in the letter. We're already seeing it, and we'll continue to execute. SEO, we talked about cleaning out the corpus, improving the content, and a number of other performance issues. We feel good about where we are. That one is a probably more like 12-month journey to get to where we want. We know what the footprint looked like or what the landscape looked like before we did the rebranding. That was in March of 2021, and we talked about how, you know, we lost $80 million to $100 million of EBITDA through the rebranding. Yeah. All really SEO traffic that we lost to third parties and had to buy back. We know sort of what the prize looks like. We've got to execute. IAC is very good at SEO, SEM, so we know what we need to do. We've got new leadership there, which is great, but it's just head down and execute. Yeah. Okay, that's helpful. All right, I'd like to pivot to some of the emerging and other areas, and then close it out with kind of capital allocation. Mm-hmm. On care, you mentioned you were working on some product improvements, on the most recent call. Could you kind of dive a little deeper into the work that you're doing at Care.com, and then just level set for people, the top-line trajectory and margin profile, if possible? Okay. We spent a lot of time at Care after we acquired it, shoring up the core platform and stability, background checks, onboarding the app, et cetera. Where the next stage of development was really the user interfaces. Care seekers, what their product looked like, how the different offerings were positioned, and how, you know, fulfillment looked to a parent or family member of a senior care needer. The other element was what the product looked like for caregivers, including accepting jobs, scheduling, compensation, et cetera. The third, which we've talked about a lot, is the Instant Book product, which is the key lever of growth long term, and a fully flexible product enabling short-term bookings, rapid fulfillment, and matching on the marketplace, et cetera. We just rolled out the new consumer interface. Feel very good about that and where that is and what we're seeing in repeat rates. We've scaled up or rolled out and scaled up the usage of the provider interface, and we'll continue to improve that. The Instant Book product we've launched or continuing to iterate and improve. All of those, we think, will produce higher transaction volumes and greater engagement on both sides of the marketplace. In terms of the overall business, it's grown well since we acquired it in. I think we closed in early 2020. Growth has slowed in about 5% and, you know, continues sort of the slowing trend, really just due to we need better marketing. That's both brand and performance, very focused on that. We feel great about being the clear market leader. We feel great about, you know, the offline to online conversion. Just we need better pure brand marketing, digital, et cetera. The enterprise business is doing well. We've after a huge ramp-up in businesses contracting for backup care, we had a bit of a period of digesting that. We now feel good about serving those enterprise customers and their usage of the product. It's just about continuing to grow that. Overall, you know, you can see in the growth in emerging, and where we've guided it at 30%-50%, you should think of that as the improvement year-over-year is due to growth in Care profitability, also selling Bluecrew, which was losing about $26 million a year of EBITDA. You know, it is a solid business with, you know, north of 10% EBITDA margins, and we'll look to continue to grow it, and we think it can create real value. Got it. I wanna move to, I think in the letter, and Joey, and you guys have talked about this, the investment in Turo. Mm-hmm. You increased your stake, I think now own 31% with the warrant for an additional 10%. Correct. Could you talk about, you know, kind of, the rationale for, you know, kind of increasing the stake? Definitely. We are, and we talked about in the shareholder letter, I mean, they have a amended S-1 on file, so there's limited things we can say, including about prospects and such. We are big believers in Turo. You know, Joey and Barry and the IAC team have seen marketplaces scale over time and know the hallmarks of a successful marketplace. The trends, the positioning, the competition for Turo in the rental car and car usage market, we feel very good about where they sit, and they've really cracked the code, we believe, on liquidity, on insurance pricing, on margins, et cetera, and that's taken trial and error. Big believers in the asset and the business, and Andre and the management team and the opportunity there. We saw the opportunity to increase our stake, excited to own more, and, you know, we'll be long-term board members and supporters of the company. Makes sense. Maybe, we have a little over two minutes left, so I, two, we'll try to get through quickly. That might be a segue into kind of the valuation gap. We, on our numbers, as of, like, yesterday, ex MGM, Turo at cost, other items, we're looking at a 1.5x EBITDA on our 2023 estimates. Seems pretty cheap. It feels very cheap, yeah. It's, it's these, you know, covering the company for so long, these are kind of the moments you kind of we've seen this before. We've seen it go negative. These are the moments for investors and I know you guys kind of framed it in a way, this last shareholder letter. Any, you know, any color on, you know, kind of, what the investors are missing here? We've positioned it in a way in our shareholder letter, which is how we think about it, that at that point, on a, on a pure imputed valuation perspective, you are getting a number of real assets for free. Right. ... quote, unquote. We recognize that there's been significant disruptions in the broader market, and also, we recognize our execution should be and has to be better than it was in the 2021 and 2022 frame. That being said, we feel solid about the portfolio. The back to basics program has worked well, and it's our job to execute and prove that value out, but there's clearly a significant value disconnect. Yeah. IAC, the people who've been at IAC for a long time, says it comes and goes, and they accept it. We wanted to highlight it and underpinned what was the largest buyback we've done since 2016. You do the buyback. You have a strong balance sheet. There is this valuation gap. What- 30 seconds to go here. Just thoughts on, you know, kind of capital allocation from here? You're seeing increasing pressure in the private market, I think, on access to capital. There's still a lot of growth equity and private equity funds with capital sources, but fundraising market has obviously dried up top for the funds. That'll flow through, and companies are gonna have to, you know, justify or make their valuations more reasonable. We track it closely, whether it's a bolt on to an existing portfolio or a new deal, we're interested to keep building the portfolio.