Good morning, everyone, and thank you for joining us for the Fireside Chat with People Inc. Very excited to have Tim Quinn here, company CFO. I have got a number of questions I am going to ask Tim. Please say I do not get to your question. You can either put it in the chat below or feel free to email me at jason.helfstein@opco.com. Tim, thanks for spending time with us today. Before we get going, I think you may be new to some people who have looked at the former IAC for a number of years. Just give us some of your background and how you ended up in this role. Yeah. Thanks, Jason. It is great to be here with everybody. I have been with IAC, former IAC, Dotdash, then Meredith, now People Inc., for going on 12 years now. So I have been partnering with Neil, operating this business for a good long while. So a lot of familiarity there, getting up to speed on the rest of the business. But obviously been very close with Chris and Mark and Barry and the team. Prior to that, I spent more than a decade at American Express doing corporate development, investing, M&A integrations, a whole host of things there. And once upon a time was an investment banker, with a guy named Neil Vogel back in the 90s. So that is actually how we know each other. Gotcha. Let us start again. I think there are some newer investors to the story, just given some of the dynamics going on, in particular with MGM. But just quick overview, what is People Inc. today? What is that asset you own, and how should people think about the portfolio broadly? Yeah. Great. So zooming out, People Incorporated is the former IAC, right? We own a significant interest, minority interest in MGM. People, the operating asset, that is what I will call it today, that is the traditional sort of publisher media business and a handful of other assets, which we will get into. Our goal right now in this incarnation of People Incorporated is to simplify the overall structure, ownership structure. And we have taken a couple steps to do that. One, identified MGM and People, the publisher, People, the media business, as our core assets. That is where we are going to allocate our capital, both through share buyback, opportunistic M&A on the People side. At the same time, we own two businesses, majority businesses, one called Vivian, one called The Daily Beast. Both are performing well. We are looking for new homes for those. We're not in any hurry to do something that's not economically rational, but we do think that they're probably a better home and a value play for us. We own a minority interest in Turo, which is a ride-sharing company that's also doing very well right now. So we feel pretty well-positioned to continue to monetize non-core assets and redeploy that money into the core. Gotcha. Let's get the elephant out of the room before we get into the operating assets. So if anybody just wants to hear it and then drop off, they're entitled to. As far as holding company catalysts from here. I guess number one would be MGM, which on the most recent earnings call, Barry intimated should reach a resolution roughly soon. I don't know if some folks interpreted that in 60 days, 90 days, et cetera. But you've got that. Let's start with that, and then I can get to some of the other catalysts after. Yeah. I think Barry said 60 days, we expect resolution. On June 1st, we put in an offer to buy out the rest of the MGM stake. We and along with some other equity investors would do that. That's working its way through that process. There's a special committee and all. We can't say much more about that other than we've been shareholders in MGM for six years. We like the management team, love the management team, like the assets, think it's undervalued, much like the People Incorporated story, the holding company story, and we saw an opportunity to take a bigger bite. Again, we'll see where that transaction goes. If it weren't to come to pass, then we'll go back to doing what we were doing, which is continuing to buy back stock in People Incorporated and opportunistically look to increase our position at MGM. Right. Okay. We will get back to People Inc. catalysts later in the conversation. So let's get right on the main operating asset, People Inc., the former Dotdash. I could talk about what it was before Dotdash, but we're not going to do that to confuse people. So you guys have been trying to frame the discussion around how we grow the digital revenue faster than the mid-single digit. Do a breakdown of sessions versus non-sessions revenue. So maybe just first start explaining what that means. Yeah. I would say like everyone in media these days, we are contending with the changes that AI has brought to the world. I think we have been pretty forthright in talking about it as long back as two plus years ago, saying that the new world is going to look a lot different than the old world. Search is being disintermediated by AI, and that is going to have an impact on the downstream traffic to people like us. We even called it Google Zero almost two years ago. We do not think it is going to zero, but that was sort of the internal rallying cry. We are at 21% today. 21% of- We are at 21% today, down from 65% back not too long ago. What that forced us to do is really recalibrate and think about our brands and put our brands back where they belong in the forefront and develop new strategies to monetize those brands and those audiences, that those brands are unique in this kind of modern AI world, where it is still a human connection and a brand-led connection between our users and, again, our assets. What we told Wall Street, and have been telling Wall Street the last few quarters is, we think about our digital business in two parts. We have sort of this, we call session-based, so that is visitors to the.com. The session-based revenue stream is incurring and absorbing the headwinds from Google, or from the decline in Google Search, and continue to maintain revenue at about flat. That is about, it was 57% this last quarter, and we were minus 1% in total revenue on that side of the house. The growth is coming from the other side of the house, what we call non-session-based revenue stream. That includes everything from events to social series and social audiences to our licensing business. It includes D/Cipher, our ad targeting capabilities, and that is where the vast majority of our investment is going. That 43% is growing about 20%. It grew 19% in the first half of the year. The whole sort of recalibration around this audience disintermediation is to, again, create direct relationships with consumers on that non-session-based category, that grouping of revenue streams, and grow that as fast as we can. As I said, that is where the vast majority of our investment is going. To the extent that, let's just say the Google impact doesn't get worse relative to where it is today, does that give you enough line of sight to see how digital revenue can get back to double digit, or that's still unclear even though that is the long-term goal? Well, that is our rallying cry, right? We've always been, and we say around the business here, double-digits growth, everything else will take care of itself. Double-digits growth, I always add, with strong margins will take care of everything else. Right now we're in the mid to high single digits range. That's what we've guided to this year. That's what that kind of 40% growing 20% and the rest flat gets us. But our commitment and obligation to do is to continue to invest in that non-session-based revenue streams to bridge the gap. I do think we can do that. I think that takes some time. No one's more impatient than me when it comes to that, but these things do take some time to build. Again, I think what Neil said on the most recent call, and we've been saying pretty consistently, is we are rolling out new initiatives every quarter, multiple new initiatives every quarter that are meant to feed that sort of growth. So we think we can get there. I don't want to put a timeframe on it yet, but definitely everyone should hear that our goal is double digits revenue growth on the digital side. When I look at the model, as far as breaking down the components, brand revenue is still the biggest revenue bucket there. I think you said on the earnings call that the ad market was like a six out of 10 with pullbacks in food, beverage, and CPG. Broadly this quarter, pretty much outside of one company, Adtech, everyone was seeing healthy and better than expected results. I guess what do you need to rate the ad market an eight or nine out of 10? Yeah, I like the framing on six out of 10 because we sit in, say roughly, not exactly, but roughly 10 markets, right? We touch beauty and we touch media and streamers, and we touch auto, and we touch healthcare and pharma, and we touch travel, all these different categories. It's rare that everyone's growing in the same direction at the same time. That's what it would take to get to eight, nine, 10 out of 10, like a ripping economy and sort of everyone's strong. As you said, there are pockets of real strength, like genuine real strength, and there are pockets that are a little bit more lukewarm. The lukewarm categories are tending to either have exposure to inflation-sensitive categories, maybe the lower-end consumer or structural headwinds. An example of that is the food and bev industry, right? In the "old days" of the magazine era, some of the biggest advertisers were industrial food. I don't want to name names because they're our valued clients. But some of those- Household names. Household names. Yeah, household names that we all ate their cereal every morning as kids. Those businesses are struggling right now. They're going through their own transition. As a result, ad budgets are not as robust as they were, plus inflation, plus, plus. That's sort of how we get to the six out of 10. It is more healthy than not. It is certainly strong enough for us to deliver on the year that we've committed to investors and to the street. Could be better, but we're happy with it. Maybe segueing, maybe we are seeing this because we have heard CPG is healthy, let's say out of companies that maybe have a more performant type of ad unit where it is not really brand, even though brand, the lines are distinctions, but your performance marketing grew 13% in the quarter. I guess how much of this is also getting brands to think of you more on a performance basis in the way they just did in the past? Where in the past it was a page in a magazine, then a page on a box on a webpage. But the whole point of you are bringing performance to the business and site for just getting these brands to look at you more the way they look at what are the kind of traditionally the performance digital platforms out there. Yeah, good question. Excuse me. We would consider ourselves, we are certainly upper funnel, mid funnel, for sure. We are highly performant for advertisers. I am not suggesting that we are Google Search or something like that. That is true bottom of the funnel. But we offer a wide range of services to advertisers, and we command a premium in the marketplace because our ads perform. That is sort of non-controversial and measurable, particularly in the programmatic ad markets where our ad inventory commands very significant premiums. As it relates to performance marketing as a category and on the face of our P&L, that is primarily our affiliate commerce business, which is super low end of the low funnel. That is basically where we test, rate, and review products, think Consumer Reports or Wirecutter, and make recommendations to our users across all of our brands, or across all of our primary brands. That business has been a stalwart in terms of growth for years. It continues to perform really well. We have said publicly, we send over $1 billion at retail, well over $1 billion at retail to retailers, GMV. So we are valued partners to the Amazon of the world and the Nordstrom and the Wayfair. We partner with them now in new and kind of innovative ways, even in the sort of face of what is declining search traffic to that content, to those assets. So strong growth, deep partnerships, measurable, like actually measurable, sort of highest performance marketing. We do expect that piece of the business to moderate and grow some in the back half of the year. Again, just incredible growth in the back half of last year. So one, the comp is harder. Two, there are some things with Prime Day was in Q3 last year. It straddled Q2 and Q3 this year. So you should expect some moderation and growth there. But I would say that the relationships with retailers have never been stronger, and I think we are very valued and we value them, but we are very valued by the retailers. Right. It is almost like a way that, and we have talked about this, kind of the way that you kind of formally segment the revenue is not necessarily representative of actually how this is evolving, right? Which is getting to the sessions versus non-sessions, right? Where what a lot of people think of performance today is not actually the way you describe performance, right? You literally have, there is performance in brand, but it is like getting those brand advertisers to kind of engage with more performance-oriented type of ad units, right? Yeah. Exactly right. I mean, again, they are super low funnel, and that is what this performance marketing business is. It used to have a large mortgage origination element under Investopedia and all of that. That business is not as dynamic as it once was, but the consumer side is very strong, and it points to that sort of the value of these audiences and the brands that we have. Let us hit on licensing. That was very fast growth from the quarter. It was up 20%. You have Apple News in there. There is syndication. The Meta partnership was signed at the end of last year. We will get into Google in a second, but just what is, I guess, still in the hopper as far as future licensing deals and I guess repricing old deals higher, et cetera. What can you say there? Okay. Let us start with licensing because it is the fastest-growing piece of the P&L, and get into that, and then talk a little bit about AI as a sort of part B of it. We are making more content today than we have ever made at a lower per unit cost than we have ever had in the past, and it is all still human-created and on-brand. That is accruing to our benefit in a lot of different places, but particularly in the licensing line. And so licensing can include everything from our distributed content across platforms like Apple News or even Yahoo or AOL or NewsBreak and all these guys. We are seeing strong growth there because, again, I think there is a flight to quality content. We are making more of it. We have more brands than anyone else, and so we are seeing real growth there. The second part of the business is product licensing. I mentioned some before, but on the product licensing side, the biggest one of which is our Walmart relationship with Better Homes & Gardens, which has been many years standing. We are one of the largest sort of quote-unquote "private label brands" within the Walmart ecosystem. That is an important, valuable partnership for us. The third bucket, which is the newest bucket, is the AI side of the licensing equation. For those who do not know the story, we have two deals with AI companies, AI foundational model companies, OpenAI and Meta at this point. We do not have deals with Google and Anthropic and the handful of the others. Though we want them. We think that our content and content in general, not just our content, are valuable inputs to these LLMs, to the AI companies, as valuable as the models themselves or the compute on which they run. Without inputs, quality inputs, then there is no quality to the model. We started blocking AI crawlers recently, almost a year ago now, so not that recently. I really think that had a sea change on the industry a little bit. It started to really get people to understand that point of view that I just laid out, that content is critical. Without it, all of a sudden, the quality of the models deteriorate. We are optimistic. The way we see the world is that these AI deals will come in two parts. There are the foundational model guys, and increasingly that is sort of already consolidating to a handful of players. Then there will be applications built on those LLMs on the AI. We think that the application layer will be more of a pay-as-you-go, pay-per-use model for content providers, content creators, where the application needs to go get specific information and bring it back to the application in which it is residing. We did do a deal with Microsoft around that late last year, and we see others coming. We basically see the AI universe forking into these two models, or a foundational model application layer. Pay all you can eat, we call it on the foundational model, pay as you go on the application layer. Okay. Let us unpack that a little bit. So far, Anthropic is not paying anyone, as far as we can tell. Correct. You could sue them. You are not. You are suing Google, but that relates more to the adtech kind of trial, where they were ruled a monopoly. You are also in discussion with Google for where this goes. Maybe let's talk about Google, and then we can talk about Anthropic. Just maybe remind everybody what's going on with the Google lawsuit, and then can you connect that at all to the comment that you've said you could consider blocking Google, but the ramifications would be you- Yeah lose out on the organic search, and they lose out on the AI because they have a consolidated scraper. Let's talk about Google, and then we can go to Anthropic. Okay. There's two totally distinct tracks on Google. There's an adtech case I just want to touch quickly on, which is the government found that Google abused its market power to disadvantage the ad market over the last, call it decade. We and many others have sued or have brought an action against Google. We expect that we were among the largest disadvantaged in the world because we had Time Inc. Our predecessors, Time Inc., Meredith Corporation, Dotdash, are among the biggest. We think that that's a very sizable claim that has already been proven by the government, and we're now talking like in 2027, we expect a sizable restitution for those damages. That's separate from the matter we're talking about now, which is AI and AI licenses. Google and Anthropic, but let's focus on Google, have not cut deals, certainly with us. They've been sued by others, not us, in this matter, including The New York Times. In the old world search, there's a benefit of the bargain. We allow you, Google, to crawl our content and index our content and show it on the search page, build a gigantic ad business off of it, Google. In return, reciprocity is we get traffic. In the AI world, that model is broken. Google and others are answering the question on the page. Links are minimal, if ever. Traffic back is de minimis. What we want and we have asked for is for Google to separate the search crawler from the AI crawler. Right now, they are co-mingled. In a co-mingled world, we have no choice but to allow Google to continue to do what it does because, as you said, the search traffic remains a lucrative part of our business. I don't think we would block the two of them if we actually had the option of blocking AI, the AI crawler. That is definitely something that we would consider. That's not an option today. There is talk of that coming due to some U.K. regulations that have come out, but we'll see. I'm a little bit skeptical that you'll really be able to ever separate the two. Got it. Do you think that once are these tied at all, that is Google waiting to resolve the antitrust suit before it's completely unconnected? No, I don't think so. I think, again, Google has The New York Times, Penske Media Corporation, others have gone either after Google or OpenAI on these matters, depending. There'll be a legal avenue, and then we think there's a business avenue, but they're separate. Yeah. Got it. In our sense some of this is connected. Obviously, Google has an OpenAI paid relationship with Reddit. That expires March and April of next year. Reddit has publicly talked about wanting a lot more money or changing the policies. It does seem like, again, this is all precedent-setting. Would you generally view that we will somehow end up in some kind of system where publishers, to the extent we're broadly thinking about this group as publishers, digital publishers, there'll be some kind of standard monetization at some point? Where there's averages that people are paid based on the scale that they- Yeah of the content they have. We would think so. That is certainly what we are angling for through legislative, through legal, and through business channels. We, People Incorporated, the collection of our brands, are among the top 5 or 6 most cited content providers in AI in both Gemini and OpenAI. The top being YouTube not shockingly, Wikipedia, Reddit, as you mentioned, and a few others. So we are in that category. The collective of The New York Times, the collective of all of us, including Reddit, believe we should be paid for that in some fashion. It will be interesting to see how it all develops, but that's certainly our point of view. Got you. Is there anything to say on Anthropic just while we're on it? No, not much. That's philosophical. I think it's philosophical. Yeah over there. Yeah. Yeah, sure. Or a very large class action at some point. These lawsuits, though, are not inexpensive and cash is king, as Barry likes to say, right? Right. Okay, before I get into margin, just on the new initiatives, could any, and I'll get like Southern Living Insiders, People Premium bundle, Hot Ones, the Netflix deal, can any of these move the needle for next year in aggregate? Or yes, you kind of have to keep innovating, but we shouldn't think about this from a model standpoint. Well, I think in the aggregate they can. I've said in the past that I think for the Southern Living, one of our best brands, has a magazine element, has an onsite.com digital element, has a social element, and what we try to do is take the best of all of those things, bundle it into a membership program. For Southern Living as a brand, the economics of that program will be meaningful, meaning it will take them from whatever growth to 20% growth, right? They're going to get good, solid growth out of that. If we can replicate that model four or five times, that's enough to be very meaningful in the aggregate to People Inc. That is what we mean by when we say brand-led, brand era, right? Neil says we went from the magazine era to the.com era to the brand era. The brand era is these brands now have to go find these direct connections and relationships and business models off of them. We've got a whole, you mentioned several, we've got a whole list of them, a whole bunch more coming out. I don't think we're going to bat 1,000, but I think in the aggregate it's going to be meaningful and we expect that's really the path you said earlier to getting back to double digits growth. We're sitting here now in the sort of 6%- 7% range. We definitely believe that these projects, collectively, in the not too distant future, will get us back to double digits. Let's talk about margins. We did see digital margins expand to 26% from 23%. I guess just like where do you think steady state digital margins play out over time? I think we can continue to grow. Do you want to Yeah, I think we can continue to grow margins faster than we grow revenue. We were particularly good at that in Q2. There are some episodic reasons for that we do not think it is sustainable, but we do think for the year we can deliver kind of 30%- 40% digital EBITDA margin expansion. That is growing margins definitionally. The reason Q2 was particularly strong was our licensing business was really strong in Q2. We actually had a particularly good quarter on performance marketing. Again, that is at high margins, and we have gotten really good at redeploying our assets, and getting more streamlined. I said before, we are making more content than ever at a lower cost per unit. We are using AI to do a lot of that while the humans are still creating the content itself. What we are doing is taking the efficiencies that we are generating through AI and other means and redeploying those dollars against these new growth initiatives. The timing maybe did not line up perfectly for Q2 and it worked to our favor. We think we will invest a little bit more in these new initiatives in the back half, and we will continue to deliver in that sort of 30%+, 300 basis point plus percent, 30, sorry, incremental margins of 30% or higher. It is 300 in Q2. Do you feel like you have gotten past this point of companies deploying AI and kind of overusing tokens because it is kind of hard to understand? Do you feel like you have a good understanding of the cost of now AI and Yeah some guardrails around people using the most expensive model for something that just isn't necessary? Yeah, I think that's a good Well said, and that's sort of where we are. There was, like probably every other CFO, there was a two-week period where alarm bells went off and the spend was getting a little wild, and we had to put better controls around it, and did. Now, yeah, we're using different models for different purposes and optimizing token use efficiently. I think we've got our hands pretty well around it. It's definitely going to be an important part and a growing part of our investment going forward. Just any, let's talk about print real quick. Print revenue was down 16% in the quarter. Adjusted EBITDA was down significantly to $9 million, but still positive. Third quarter print is expected to look like 2Q and not quite cover the corporate overhead. Is there a line in the sand around print profitability? Obviously, we get there's a synergistic benefit. Yeah because the content is used both places. The print supports the brand. I guess how do you think about the line in the sand around print profitability? Yeah and magazines? I understand the question. We don't see a line in the sand. We are confident we can continue to deliver print at or around our corporate overhead cost, which means roughly $40 million, high 30s, $40 million a year. We have a lot of moves yet to make there. We have two parts to that business. We have three parts, really. We have healthy subscription and newsstand business that are reasonably stable and that we have a lot of control over. The advertising side of the house, a little more challenging in a world where sort of instant advertising gratification is more the norm. But yeah, we can continue to manage it. We do think Q2, Q3 will be the low point for the year, and we still think despite that, we will deliver high 30s or $40 million of EBITDA for print and can do that for the foreseeable future. Do you think, on the print side, we're kind of seeing it like some companies are toying with more premium paper, raising the price moving to quarterly. Yeah. Just kind of evolving. Look, some titles, maybe that works. With other titles it doesn't. Just, I don't know. No, that's a good observation. That's exactly what we have been doing since we put the businesses together. The first thing we did when we merged was increase the quality of the paper and the photography and the book quality, then a year or two later, started to increase prices relatively modestly. Those are the plays you make, for sure. We have a very, very healthy newsstand business that has, not the traditional, people think of it as the traditional sort of weekly on the newsstand, but it's actually product that lives longer, maybe lives for a month on the newsstand. It might be like a Knicks special edition, championship magazine type of thing. We still make those and make nice money off of those. Anything else you want to talk around on corporate costs and outlook, just broadly? Well, what folks should understand is, and I understand it can be a little bit confusing, but People Incorporated, the former IAC, had a corporate cost structure, right, in it that I think was part of the reason for the discount in the stock. You are carrying costs at the corporate level. We have taken steps, and our predecessors took steps to significantly reduce that cost structure from something order of magnitude of $100 million a year to what we have said publicly will be at a $45 million corporate cost run rate, by Q2 next year. It is diminishing from this period today through to Q2. We are continuing to look at other ways to reduce those costs. That is really what drove, that was the impetus for the combination of the IAC team and our team. One, we hear people. Two, we are mindful of it. Three, we are working to get the cost structure down. That is the main point. We are looking for efficiencies across the two corporate structures, right? People, the media business has 3,500 employees, has its own corporate element. The Holdco had its own, putting those together, getting the cost down, and that is all mentally to maximizing free cash flow. Okay. We have five minutes left or so. Let us talk about other potential catalysts. We touched on the Google litigation, talked about 2Q. Maybe potential 2Q resolution next year. Cumulatively, how much have you spent on that lawsuit so far? How much has the company spent on that? Probably 20- 25. We expect to spend 15 this year. We are on track to do that. So we are probably in the 10- 15 range so far with another 7- 8 come this year. Right. Okay, and so it would be fair to say that you would think a settlement would be multiples of whatever you would spend on that, right? Many multiples. Many multipless Right. To the extent as that is to kind of frame, obviously, we are not going to say what do you expect the settlement to be, but that is how folks should think about it. That you will be in this for whatever it is, $25 million or something like that at the end of the day, give or take. And you would expect to get multiples of that in some kind of settlement at some point. Yeah. We've said publicly nine figures. Yeah. Yeah. Looking at- Okay. Look, there is also, again, at some point, do we see kind of, again, this broad AI licensing kind of becoming unstopped? Again, not asking you to answer that, but that's something I think that sits out there for a lot of the companies. Turo, I think Chris a quarter ago, so not this earnings call, the quarter before that, talked about the business doing a bit better. I mean, anything you just want to share on Turo and the path to an exit? I think you guys have categorized that as not a long-term asset for you, so a path to exit, either through an IPO or I don't know if the company should be sold to another entity or something. Yeah. Well, Barry said on the earnings call, for anyone who heard it, he encouraged an IPO at Turo, sooner rather than later. I think the business performed, again, very, very well in Q2, so is now stringing together strong growth quarters at good profitability. I think it's certainly realistic to think if they can do a few more of those quarters and kind of turn the page to 2027, it is an asset that is capable, worthy of being in the public markets. So that's our preferred route. We would entertain a private sale that's a little harder, more complicated, to liquid, all that stuff. But the thing about both Turo, as well as Vivian Health and The Daily Beast, our other operating assets, is all three are worth more today than they were a year ago. We just have to find the right time and the right partner and the right new home for them. We think that there is real value to unlock there that is not being valued today. Do we think there is a potentially strategic buyer to Turo? We are definitely seeing in the mobility space, more of the movement to super apps, broader. Yeah The way, whether it is an Airbnb of the world, the way travel experiences, all that, and obviously Turo is trying to cover multiple things. They want to be both like an everyday service for transportation and something you use both for leisure travel and business travel. Yeah, I think strategically there certainly makes sense. There should be, could be partners. The minority interest and all that needs to be worked out, and so that probably scares a few people away. All options are on the table, as you said, and we will see where it goes. The first step was to get the business healthy and operating well, and it is. That is super encouraging. Great. Okay, I think we're going to stop there, Tim. Thank you very much for your time today. If anyone's got any follow-up questions, feel free to email me and we can either answer it or connect you with the company. Have a great day, everybody. Great. Thanks, Jason. Thanks, everyone.