Morning, everyone. Welcome to day three. Cory Carpenter, Internet Analyst at J.P. Morgan. Excited to have Ziff Davis with us, Vivek and Bret. Thanks for joining. Thanks for having us. Thank you. So just to kick off, Ziff Davis changed a lot over the years. We've been following you, but for those who haven't followed the stories closely, just to kick things off, could you talk about the evolution of the company and, and the state of the business today? Yeah, so, the company is a digital media and internet company. For the better part of the last decade, we have systematically been acquiring and growing various businesses, various internet businesses in different verticals, which we'll talk about. Really look for opportunities to acquire businesses where we see a clear path to value creation. Generally, it's audience growth, monetization growth, customer acquisition, leveraging our existing tech platforms, leveraging the management team that we have in place, and the operators inside of the company. And, you know, for the better part really of the last decade, the business, you know, had pretty impressive growth characteristics. It grew on a compounded annual growth basis, top line in excess of 20%. EBITDA margins in the mid-thirties. It's really been the last couple of years where we've seen a real slowdown. The business has been somewhat treading water, flat-ish, in 2022 and 2023. A lot of that has to do with the acquisitions environment that we've been in, and much to do with the advertising environment as well. But I'll pause there, 'cause I know there's a lot to unpack. Yeah, so you have... You, you broadly break the business across seven verticals, under advertising, under subscription. Could you talk just at a high level about the trends impacting advertising, and then also the trends impacting subscription? Then we'll go deeper into each. Yeah. So just, as a point of reference, about 55% of the company's revenues are advertising, 45% of the company's revenues are subscriptions. So on the advertising side of the equation, I'd say a few high-level characteristics of the business. First is, pretty much all of the advertising products are contextual in nature. In other words, we are targeting advertising against the content that a consumer is viewing or content that they're consuming, versus a behavioral product, where we're collecting data elsewhere or collecting data and then finding audience elsewhere. So very much monetizing the audiences that we attract. The second thing I'll say is very performance-driven. So while the advertising pricing may be a variety of different ways in which we'll price, whether it's served impressions, on clicks or on a commission basis on sales or leads, in the end, all of the advertising really is on a Return on Ad Spend basis. So not brand, more performance. We will do brand, but again, held to performance metrics. And then the last thing I'll say characteristically about the advertising business is that it's very much enterprise advertisers, so a little under 2,000 advertisers, who are spending in the mid-single digits, with us on an annual basis. Within the advertising business, we're primarily in four verticals, and it's important to understand it from a vertical basis because each of these has different characteristics, headwinds and tailwinds. So we're in the tech advertising category, tech and telecom. We are in the health and pharma and wellness advertising categories, gaming and entertainment, and then in retail. And then did you want to talk about the subscription services? Subscriptions, yes. Okay. So then on the subscriber side of the business, it's about 2/3 B2B subscriptions, 1/3 B2C. So, on the B2C side, we have properties like Lose It!, which is a health app, subscription basis. Humble Games, Humble Bundle, which is in the video gaming space, ties to our IGN asset, and then IPVanish, which is VPN. And then on the B2B side, it is primarily Ookla, which is our connectivity business, which has as a consumer app, Speedtest, but we collect a ton of network data that is packaged into a data subscription service to telcos and to broadband providers, et cetera. We have VIPRE, which is endpoint security, email security, and security awareness training. And then we have our MarTech division, the Moz Group, which is email marketing and SEO analytics. So sticking with subscription for a bit, this segment's grown pretty steadily through the macro choppiness. Yeah. What, what's driving this? And, you mentioned all the businesses. What are some of the key ones that you would highlight? Yeah. So look, I think this is important, 'cause whenever I'm having conversations with shareholders and prospective shareholders, we spend 95% of the time talking about the advertising business. In fact, nearly half the company is the subscription business, which has been growing at a, you know, sort of mid-single-digit CAGR for the last three to four years, held up very nicely in our last print, our Q1 print. So it has been a source of real stability and growth for us. Inside of that, we have businesses that are growing quite nicely, and then some that I think are on sort of a coming around to being in positive territory. So I think when that starts to happen, we'll see some nice acceleration in growth rates. But on the positive side, the Ookla business is a fantastic business. We are easily the worldwide leader in network analytics and network data. Broadband is really everything, and so within the broadband economy, the position that we have with our data subscription business is quite strong. That's a great business for us. The Humble and Lose It! subscription businesses are very strong as well, and really tie in nicely synergistically to the media properties that they sit inside of, leveraging audiences to drive customer acquisition, leveraging our advertising sales infrastructure to monetize free trial subscriptions before they turn to paid. So a lot of good things are happening there. Our email marketing business has been very strong for us. In the category of businesses that I would say have been facing headwinds or frankly acquired with a view towards establishing profitability, and now we're in growth mode, our Moz business, which is SEO, we bought that. It was a money-losing business. It is now quite profitable. We've gotten it to that profitable core, and we're now in a growth orientation with that business. Our VPN business, which was growing, and then we had some customer acquisition challenges, getting priced out of some channels where we typically go to acquire VPN subscribers, that has now put itself in a position where I think by the second half we'll be in positive territory. The cybersecurity, the VIPRE business is similar in that vein. It was run for profitability, and now we're getting to the point where we think we'll have both profitability, as well as organic growth. So the subscription side, you know, I think will certainly continue to grow, and I see some scenarios where it begins to really accelerate in growth. Okay, so one more question kind of before we go to advertising, tying the two together. You mentioned you alluded to this in Humble and Lose It. Mm-hmm. But could you just talk about, you know, we're often asked, you know: Why do you have subscription? You know, why have subscription and advertising under the same umbrella? Why does it make sense to own both? Could you just talk about some of the synergies you see? Well, look, I think it starts. I mean, we like having a balanced business model. The advertising business has... I mean, I've been in it for 30 years. It has a good degree of, you know, it's lumpy, and there's a cyclicality to it, and when it's great, it's great, and when it's, you know, when it's challenging, you can see that, and you've seen it, certainly in the industry. So we like the balance of ads and subscriptions. But I think also, you know, there are relationships between some, not all, of our subscription businesses with our advertising businesses. Again, when we acquired Lose It, it was the idea of leveraging the Everyday Health audience and the BabyCenter and What to Expect audiences to drive customer acquisition. Very natural. When we bought Humble, same thing: How do we leverage the IGN audience, which is quite significant, to drive subscription and drive adoption of Humble? So there are clear synergies in some of those instances. And then I'd just say skill set-wise, there is some real commonality between these businesses. We like digitally delivered goods and services, customer acquisition, search engine optimization, search engine marketing. A lot of those disciplines are actually quite common and consistent amongst the digital media business, which is doing traffic acquisition, with the subscription business, which is doing customer acquisition. And then the other thing I'll just say, too, is that I think as a technology organization, I think both of these are technology businesses, and so the underlying platforms that we're building, we think, have application between and amongst them. Moving to advertising, about 55% of your revenue, so we won't spend 90% of the time on it. It's stabilized in 1Q after declining over the past few years. What drove the improvement? You know, how do you think about the trajectory going forward? So I was talking about the four verticals in which we operate, and it was really vertically driven. So the tech vertical in 2022 and 2023 was pretty punishing for us. We were seeing some positives in other areas of the advertising business, but significant negatives in tech. Coming into Q1 of this year, that changed, and so I think part of it is just the tech, the tech ad vertical has improved to the point where it's not hurting us, and so that's, that's part of the answer. I will also say that the health and gaming verticals have been and continue to be very strong for us, and we continue to be very optimistic about the dynamics there, which we can explore if you want to, but they are, they are very healthy. The question mark for us right now is the shopping vertical. Some of that has to do with things that are specific to our shopping business in terms of some distribution partnerships that we have and some challenges we have with those. I talked about them on the last call, and then a very large retailer who has changed their commission rates, not just for us, but really for the industry. Now, what happens when you have that is, and we've seen this before, is you cannot capitulate. You need to punish the customer that cuts those rates, and so it's a double whammy. It's lower rates, and then you're gonna produce lower volumes for them to encourage them to restore their rates to get those volumes back. We have to take that pain, I think, to maintain integrity of our pricing. So, you know, that's a, that's a factor we weren't expecting coming into this year, and so that's something we've got to look at. But generally speaking, the retail and e-commerce space is a good one, and being a driver of, you know, digital traffic to retailers is a good position to be. And maybe I'll just jump in here and add something, Cory. There's also a little bit of overlapping dynamic between the discussion that we just had about subscription and licensing revenue and our advertising base. We have a highly concentrated advertising base. We essentially, across all our businesses, you know, historically serve on the order of 2,000 advertisers. In the last two years, where we've seen some pressure, it's been slightly lower than that. We target a retention rate for advertisers of about 100% of revenue year over year. Again, maybe a tick below, but still in the 90s. So there's almost a subscription aspect because we have a high concentration of advertisers, and we have a limited number of advertisers. Some of those advertisers are big. We're not just selling ads into the market at a bidded rate, and therefore, when you see the dynamics of an advertiser pulling back from the market or pushing forward, it can impact our business, but there's almost a recurring subscription nature to certain of our advertising revenue versus other digital media companies. And so you talked about the four verticals, maybe I think what could be helpful would be, could you just frame the relative size? You talked about the growth, maybe the relative size of those verticals, and then a few of the key properties within each. Yeah, so the biggest vertical is health, and the main properties there are Everyday Health on the consumer side. We also have relationships, exclusive relationships with The Cleveland Clinic and Mayo Clinic, where we monetize their ad inventory as well. So we are in a very strong position with respect to pharmaceutical trying to reach patients. Then on the professional side, we own MedPage, which is a leading source of news and information for physicians. So that allows us to be in the direct-to-provider pharma business, which is as attractive, if not frankly, more attractive than even reaching physicians. You have 1 million physicians in the United States that prescribe something to the order of $300 billion of annual pharmaceuticals. It is definitionally the single most valuable media audience in the world. And then on the last piece of the health business is our parenting and pregnancy business, and that's BabyCenter and What to Expect. So three out of four women in the United States who are pregnant use one or both apps to manage and track their pregnancies. So our reach of that audience is pretty stunning. So overall, very largely a pharma-driven advertising proposition, and we love the pharma ad category. It's got some protections. There are real regulations in place in terms of how pharma can market, particularly to individuals, that keep them away from a lot of social media channels. So it is one of the few large ad categories where we have a little bit of a moat and some protection. Then, the next largest advertising category is actually retail, and again, that's RetailMeNot as the principal brand, and we own Offers.com, and we own VoucherCodes in the U.K., and we own a few Black Friday sites. And really, what we're trying to do here is deliver savings and discounts to consumers, so free for the consumer to use to get cashback, a discount code, a promo code. And then we get paid on a commission basis for traffic that we drive to a retailer, and if our user converts, we get a percentage of the cart. And so a big driver of that often is our ability to deliver customers, to have them convert, get to a good cart value and to a good commission rate, but that commission rate can be a real driver of revenue. So this is very much performance-driven. The pharma business, I should have pointed out, has to be by regulation, cost per thousand pricing, so CPM pricing, where you are charging for served impressions, but on the back end, third-party companies are tracking script lift, as it's called, so the degree to which the advertising led to a lift in subscription for the underlying drug. Next is our tech business, and that is both B2B and B2C tech. So on the consumer side, PCMag, Mashable, Lifehacker. On the B2B side, Spiceworks, which is an IT community content and networking platform for IT decision-makers. When I talked about some of the B2B and sort of roughly equally split, more on the consumer revenues, given that the B2B side's come down. Combination of CPM advertising and affiliate commerce, not unlike what I described it in RetailMeNot, and then lead gen. It's been the lead gen side on the enterprise side and on the B2B side, where we had a lot of our challenges that I referred to in the last two years. Our gaming and entertainment business, that is, the flagship brand is IGN. IGN's easily the number one video gaming site, and it has tentacles in every platform. It reaches on its own 300 million individuals a month across every social platform you can imagine, across every video platform. It's on OTT, real leader in the industry. And there, I'd say the advertising business is very strong, but often dependent on the release schedule for AAA games and what the video game publishers have, you know, going in the market, and the other thing is console refreshes. So whenever there is a console refresh, that can be a big driver of activity. AI, we got a couple questions, and we got some questions from the audience on AI. So, maybe to start, just how are you using AI internally? What are some of the specific use cases you're exploring? And then we'll kinda talk about other opportunities. Yeah, so the entire focus at the company has been how to leverage AI and AI to enable our products and services to just be better, easier to use, stickier, and more valuable. I'll use an example, Lose It!. Lose It! is a popular app where you are logging your activity, including your consumption, what you're eating. Historically, the way you would do logging is you would type something in, and you'd type in the elements, and that's how you would do logging, and people still primarily do that. Now, we use voice AI for you to talk to your phone and just say, you know, I just had three slices of pizza and, you know, 16 ounces of Coke, and it, through artificial intelligence, it will recognize, unpack, and then immediately populate the app with the consumption of my items. We also have a recipe importer, where just click on a recipe that you've cooked and that's it, and it'll pull in all of the nutritional information so that you can start logging that data. That's an example of it just takes what is an existing and popular product and makes it easier to use. What we find is that the more that you use a product like this, the more that you're gonna stick with the product. So to me, that is a driver of probably retention more than anything else. Moz. Moz is an interface that SEO, search engine optimization, professionals use to do all kinds of analytics on, on SEOs, keywords, and ranks, and page ranks, and domain authority, and how do they compare to competition and opportunity, et cetera, et cetera. It can be sometimes hard to manage and navigate. It can be complicated. Now, with a chatbot AI interface that says simply, what are you looking to do? Let me do the work for you and present the chart, present the report, present the table, present it for export, whatever it is that you're looking to do. Again, another example of just making the product easier to use. So across nearly every one of our properties, you've got, how do we make AI make the experience better in sort of this automagic way that you don't quite see it, and it's just working? The other part of how we're thinking around AI is proprietary datasets and leveraging AI to yield more value and insight from these proprietary datasets. The biggest one is our Ookla dataset. The quantum of information we sit on through the speed test application, which is on 500 million devices worldwide, all organically installed, collecting all of this network data on a real-time basis over a pretty long period of time, along with our RootMetrics business, which does drive testing. So the combination and then a couple of other businesses too, the combination of data is enormous, and we are trying to find as much signal for our customers out of this data, leveraging AI platforms, to really try to get to findings, to get to predictions. We think the data can be quite predictive of lots of things: of churn, of outages, where you may have customer acquisition opportunities. So I think there's a whole proprietary data plus AI equals new revenue streams and new insights that we're only now beginning to, to start to unlock. And then the last thing I'll just say on AI is the one that I get asked a lot about, which is compensation from large language models. You've seen some deals announced, in the marketplace. A couple, yeah. I'm glad to see it because I think it is a growing recognition from the operators of these LLMs that they do, in fact, have to pay for access to our content. Our main contention, though, is that there are three areas where these discussions go: There's training, there's weighting, and then there's retrieval, RAG. A lot of the discussion around compensation is on the last two, which is, going forward, we will pay you to use your content, and we will pay you the degree to which we use more of it, and we will pay you when we retrieve from it, but the original training of the model is not an area that we would like to have a compensation discussion, and we do not accept that. We believe that the original training of these large language models was a clear violation of copyright, and it is hard to have a negotiation doesn't recognize that fact, and I think that fact will likely have to get litigated to be established, but to me, it would be, it would be a mistake for us to accept that position. So we're in ongoing dialogue. I'm very public about my position, and I think it's important because when we look at Common Crawl, which is what all of these LLMs have used for their original training, and you look at the number of tokens provided by different sources, we're in the top five or six of token providers, period. There has to be a value to that, and an entire business has been built on this, and there needs to be fair and adequate compensation for that. Do we have an audience question on AI? Yeah. Well, it's not just about AI. It's, it's related to it, though. So when I look across the portfolio of Aberdeen, you have Ookla, and under your Speedtest and RootMetrics, but you generally describe the business as an advertising and subscription business, and I think I heard you just say there's a potentially a fairly sizable- Data ... data business unlocked? Yeah. What have you kind of put some scope and scale around what you think that is? And then the second part is: What has to be true for that to come together? Yeah, it's a great question, and it's relating to subscription versus data. So when I am talking about subscription, and I, I'm actually talking about classic software subscription, consumer subscription, but data subscription. So the data as a service, or DaaS businesses, where we're literally selling either access to data on an API basis or on some kind of feeds basis or into a visualization platform where the data can be manipulated, is what we're doing at Ookla, is what we're doing at Moz, is part of what we're doing within our B2B business, the Aberdeen business, inside of Spiceworks. So I think we're there, but I think also what you're describing is in an age where proprietary data may have more value when applied to artificial intelligence. I think there's a greater unlock that comes from that. Because the challenge we have with the data businesses we're in right now, there's just too much data. It's just, it's overwhelming, and what we'll get from clients, particularly on the Ookla side, is, guys, what you have is great, but it's enormous. I would need armies of people to get to real insights and truth and value from those. And so that's where I do think AI is gonna be substantial. What we say internally is, how do you go from data to insights, right? Because data can be overwhelming, and I think we have an overwhelming amount of data in some of our businesses, and I think this is where artificial intelligence can be really compelling. Can you just kind of put any, you know, range around what that means to the business in the future? You know, hard to, you know, and I get smacked by Bret if I start to actually- Metaphorically. If I actually try to answer that question. But here's what I'll say: the data businesses today are a significant 25-ish, 30% of the business, so they're there today. And I think maybe what you're pointing at, and it's a good observation, is maybe we should be talking about that a little bit more, because advertising and subscription or subscription has a connotation. Immediately, people think of it as being one type of business, and we're probably, you know, more obviously, nuanced than that. Go ahead. Thank you. One more on advertising, and I do wanna get to some capital allocation and financials with Bret. We have audience question. I'll wrap two into one. Okay. Two topics: Google cookie deprecation. Yep. You mentioned contextual targeting- Yeah ... but how does that impact you, if at all? And then second, the Google Search- Search ... changes from this week. Yeah, so Google. What I will say on cookie deprecation is that we're not using third-party cookies to instrument our advertising business in any material way. Because we place advertising on our properties or because we're delivering traffic or we're delivering leads, none of that is cookie-based. Again, the cookie, the third-party cookie is really important, the degree to which t he ad that is placed is informed by activity done elsewhere. That's not what we do. So if you're in your third trimester at BabyCenter, we know you're in your third trimester. You've given us your due date, so when you come in, we're giving you ads that are targeting women who are in the third trimester. What we're then not doing is taking that data and saying, Facebook, run those ads. That is not our business. It never has been our business. And so I think the dismantling of that interest-based behavioral advertising will have major impact in the industry. I don't see it having an impact to us. The optimist in me says: Well, that money needs to go somewhere, and shouldn't it go to people who are selling on a contextual first-party basis? So that's my view on cookie deprecation. Now, as you know, that keeps getting kicked down the road, so, you know, I'm not sure when it's gonna happen, and I'm not entirely sure what will replace it, because the industry has always been clever about finding another way to do the same thing. With respect to search, here's what I will say. Prior to outside of Google, Bing was the first search engine that really incorporated artificial intelligence in any meaningful way across its user experience. As we've talked about multiple times, over the past year, our Bing traffic, the referral traffic has exploded. Some of it is Bing has itself grown, but a lot of it has to do with the fact that we're just getting more referrals. I think what Bing saw, and what maybe Google saw with its experimentation of SGE, Search Generative Experience, which is now being rolled out across the Google experience and across the landscape, is that AI has actually created more search activity and more click-throughs. So we have seen a positive impact, at least with respect to Bing, in terms of AI incorporated into the search experience. So now that Google is taking its AI experience and moving it into every Google Search experience, we're hopeful that it means the same thing. I will also say that the incidences of AI generative responses is quite low. I think our against the queries that we get traffic for in the Labs version of Google, we could track this piece, I think it was 16% of queries even had an AI generative response. But again, our experiences is that AI generative responses have actually been positive, and so I think the concern has been, hey, I think what's gonna end up happening is people are never gonna click through on search engines, that AI is going to turn search engines into destinations, not distributors and referrers of traffic. We've seen no evidence of that. We've seen, in fact, the opposite. So, last five minutes, capital allocation, financials. Let's start with M&A. It's been, you know, it's part of your DNA, acquisitions. You've been on the sidelines in recent years. What are you seeing in the market today? You know, when can we expect acquisitions to become a bigger part of the story again? Yeah, absolutely part of our DNA. I might sort of tweak the use of the word sidelines. We've absolutely not been on the sidelines. We have a healthy investigatory M&A program. We're in active deal dialogue essentially all the time. A large funnel of deals, you know, top of the funnel is hundreds, and a number of them get to the bottom in the deal development stage. What we haven't done is close deals. The two primary characteristics that we need to identify in closing a deal is, you know, what is the real synergistic benefit that we can bring to the table, whether it's, you know, cost optimization, revenue optimization, you know, real overlap with audience in one of our other properties, somewhere where we have a competitive edge. And then the last question we ask is, if you make the assumption that every transaction is a competitive transaction, why are we the last dollar buyer? Because if we're winning, we're paying the most almost every time, and we need to understand that, is that opportunity to bring enhancement to the asset unique to us, or is it, shared amongst other potential purchasers? And if it is, then why are we paying? We have not closed deals because we have not agreed price. We could close deals consistently if we just paid what the market would bear. I think coming out and into 2024, with the performance of many properties in 2022 and 2023, admittedly, going back to the beginning of our discussion, including ours, there's been a price gap, because price gap tends to be based on expected performance rather than historical, you know, purely historical performance, and there's a gap. We've seen that gap show signs of closing. We closed a meaningful acquisition in the first quarter of 2024, TDS, and we're active in the marketplace. It is our preferred pillar of capital allocation. But we look at all alternatives, including continuing to invest in our existing businesses and giving them the capital and the operating expense they need to grow. We look at shareholder return opportunities, including buying back stock. We bought back over $100 million of stock in 2023. We commented that, we'll be active on it on our Q2 call. And then we treasure and looked at the strength of our balance sheet, giving us the flexibility to act, so you could always enhance the balance sheet, which we do by producing significant free cash flow, on a year-over-year basis. And going back again to our DNA, the other part of our DNA is not only seeking growth organically and inorganically, but ensuring it's profitable growth. Vivek talked about our healthy, you know, mid-thirties EBITDA margin, but again, we also have a meaningful, real after-tax, fully levered free cash flow generation, which we plow back into the balance sheet and feeds these programs. So it's a holistic view of capital allocation, where we look to M&A as, you know, our primary target for that capital allocation, but we believe being patient in the M&A market in the long term is an asset. So I'm gonna skip over a few financials, because there's one last one I definitely wanna get in. So, Vivek, on the last earnings call, you talked about the trading, you know, the stock and the dislocation, the intrinsic value of the portfolio. You know, what do you think the market's missing about the story, and, you know, what do you think is driving this dislocation, and how you can close it? I've long given up on trying to figure out how the markets work, but, what I will say is, look, we've got to grow. So, you know, prior to the last two years, over a decade, we're a Rule of 50, 55 company, maybe even close to 60. And so I think the market wanted that, liked that, and I understand that. That's what, that's what we aim to do, too. The last two years, we've sort of essentially stayed flat. I think staying flat itself, given the advertising environment and, and some of the dynamics, was not easy, and I think puts us in a different company than, than some of our brethren. At the same time, while we have not acquired at the pace that we have historically acquired at, we've built a balance sheet of, you know, $800 million for us to go ahead and deploy. We still have room from a leverage point of view. So I think, you know, we're poised, and we've got to grow, and we've got to execute against organic growth and inorganic growth. That has been the story of this company. It has been. It was a very strong story for a good period of time. The last two years have been humbling, for sure. But I am very optimistic about our prospects and what's inside the existing portfolio, and what we can do with our balance sheet from an acquisition point of view. Great. We'll end it there. Thank you. Thanks.