Q2 2022 Angi Inc and IAC/InterActivecorp Joint Earnings Call
About the trends through the quarter and the ads leads and also the services business and on services, specifically, hoping to hear more about the optimizations youre, making around unit economics, and how that impacts growth.
And then second I think probably for Chris just pulling it all together how should we think about the right level of overall growth and profit for angi in the second half of the year. Thank you.
Thanks, Corey good to see you.
So let me start at the top overall, we're incredibly happy with the.
Performance was strong in Q2.
If you rewind a year ago, when we started the rebrand.
And we said, we'd get the ethylene business back to back to growth.
At this rate I think that would have been I would have been a great outcome. So we're very happy to be here very happy that we've got the ethylene business.
Strong placement growth.
And we want to continue to see that improve the drivers of that growth.
Primarily we're around pro engagement pros' willingness to pay pros, becoming more active in the market, which has been incredibly helpful.
In terms of services, we have had an incredibly strong run on services again in Q2.
With the focus as Joey said on profitability coming to the forefront we made some tradeoffs within that business that or.
For the most part have been very very positive where the profitability in that business.
As.
I would say the profitability businesses led to overall increases in profitability or energy overall.
When you put down and you look at some of the underlying things, we definitely had some challenges, particularly in roofing.
So as we've lapped the roofing acquisition.
It's important to say on pack a couple of things. So we can put the overall growth rate together, if we remove roofing from the services number we get to a 34% growth rate for the underlying.
Organic growth rate of services that would obviously tell you that roofing shrank.
In July <unk>.
Taking a step down in growth rate just to put some more numbers around that 15.
$15 million or $14 million, sorry average in Q2 revenue for roofing.
Down to about $9 million in July and you comp that to last year. It was about $11 million in July .
You can see that we've had some some pretty some pretty significant operational challenges in roofing.
<unk> been primarily around pricing where in our other categories. We turned the pricing dial and we've dialed in and we got to the right number on book now on retail and manage projects. We've had much more success on roofing, we stumbled a little bit and thats caused us to to hit that hit the brakes, a little bit in terms of growth. We expect it will take us.
Couple of quarters to get growth back on.
Back on track on roofing.
So overall you put all those pieces back together again, you've got our largest business add to leads growing mid to high single digits.
Got are net of service net of roofing services business growing in the 34% range in July so assume that stays around there and we get our.
Our roofing business back to growth over some period, we do expect to get back into the 15% to 20% range.
And again this is with increasing profitability. So you look at the underlying profitability across all of these business units worked incredibly happy with the trend incredibly happy with how it adds up and you can see that's why that's why we overachieve that profitability in in Q2, and we expect we expect to go forward and have increasing profitability.
Sure.
Thank you Corey.
With respect to overall profitability.
We were very happy with where Q2 came out.
<unk> $9 7 million of adjusted EBITDA for for Angie.
That is inclusive of.
$2 million lease impairment, so run rate profitability of the business is higher.
One of the things that we were cheered by was 10% overall growth gross profit growth.
Across the Engie portfolio some of that is due to growth at the higher margin.
As it leads business, but it's also a function of the take rate and margin improvements.
<unk> and team are driving across services when we looked for the rest of the year.
High single digits ads leads revenue growth will again drive revenue.
The bottom line and continued margin improvement.
Services, we said last quarter that we are past.
Peak investment in services, and we said in the Q, we expect to.
To have continued sequential improvements in services investment throughout this year.
<unk>.
As we go so we're we our view on overall adjusted EBITDA within AMG is for.
Higher.
The aggregate EBITDA in the second third and fourth quarter than what we produced in the second quarter and we feel very good about the profitability picture and momentum in the business.
Our next question will be from Ross Sandler at Barclays.
Hey, guys.
I guess a closure for Neil.
Obviously, we see what's going on with the broader digital AD space and the deceleration, but if we look at it.
MTV digital the 7% decline how much of that is just the macro environment versus.
Self inflicted.
Differently.
It was down seven have been if you will.
Not be monetize in reclassifying some of the sites in Q2. So that's the first question and the second question is just looking at the monthly trajectory.
It seems to trend.
<unk> digital could be down low double digits to 15% or so in the back half.
And that combined with the over 300 million.
And EBITDA comment points to about a 30% EBITDA margin for that digital business. So how much do you see the margin expanding in 2023 once all the re platforming is done what kind of incremental margin might we see.
MTV digital given the new run rate thanks, a lot I.
I think I can remember all that I'll unpack it. Thanks Ross So the first thing is about that.
AG market and the AD market is definitely challenged I think self inflicted is actually a good word because a lot of it is self inflicted I think.
<unk>.
If you have again I think it's probably $60 50, it's really hard to unpack.
There is a secondary thing going on in from Joey talked about it if you've been a little slower on the migrations that we would have liked it's all for good reasons, you want to make sure.
Internet is complex, it's hard hiring people and all that stuff.
But we feel very very good about where we are now so if you look at the AD market, it's hard to look at it as a whole right.
I think we have some pretty good diversity as you saw after the pandemic I think help us decent finances decent travel is actually excellent is not that big of a category beauty is good I think youll see a lot of the concentrated problems for advertisers around.
Retail was problems have been well talked about by you guys food and CPG, which links together the assets that we bought.
The Meredith assets over index in those categories based on the brands that they are so theres a little bit of a knock on effect of us being a little later than we wanted to be on some of these migrations means we're going into a tougher period without our full arsenal of tools. So one of the things we had the pandemic with dot dash is when things got tricky, we still did okay, because our stuff.
Performance.
Because we haven't quite moved over.
The Meredith assets as quickly as we could we didn't have the performance sites fast enough. So it's a little bit of a knock on effect that will probably go over explaining it but I would say, it's safe to say 50, 50 or 75% of our traffic is migrated now we feel very good about where we are in the rest of it should be done by the end.
And the next quarter.
We're very optimistic, but what I would say is.
No.
The pool of assets and the offering that we have put together this combination of scale and incredible brands and intent driven performance traffic.
We're still learning how to use and we are having now that were migrated and we can show some results.
<unk>, we're having a lot of very interesting initial discussions we had large advertisers tell us we are talking to Google we are talking to a matter. We are talking to you because we can deliver at scale and we can deliver performance, we deliver in a brand safe environment, and we deliver against the publisher and against contact with different kinds of offerings.
So what I'm, saying.
The market is bad.
It's probably 50 50, but we like our chances from here.
The second question is has to do with margins and growth I'll start I'll, let Chris finish.
I think youll see.
For the rest of the year from US you should see.
The improvement now it may not be sequential it is going to be lumpy. If you remember we said the last few times. We've spoken this is still a transition year and it is turning to be all of that given the challenges in the market that we couldn't have foreseen in January but I think what youll see is.
<unk> and as we get into the fourth quarter on a monthly basis Youll see us sort of turned the corner and get the profitability in terms of margin I'll, let Chris take that to answer that one for certain.
The margin we are.
We're most focused on obviously is digital.
Profitability and EBITDA margins.
You have seen.
Youll see steady improvement over the year fourth quarter is always the biggest revenue year seasonally for the business and also highest margins just given.
The scale on a fairly fixed cost base in the digital business.
We feel good very good as Joey.
Articulated in the shareholder letter about the level of cost savings that we've identified and driven.
In Meredith through the integration parts of those though however, obscure just by the lower digital revenues than we had hoped for at this point given some of the headwinds that that.
Neil just spoke about within the advertising market as we get back to growth and continue to scale digital revenues, we look forward to increasing EBITDA margins dot dash historically.
Was in the low to mid thirties, Theres every reason to believe.
This business on a stabilized basis can get back to that level and when we think about.
Getting to four.
$450 million of EBITDA as we said in the shareholder letter that is not in the cards for next year on digital.
The key there is getting to about $1 three of revenue.
And then mid Thirty's EBITDA margins and we will be at that $4 50. So it's really now in our mind as we get back to growth.
And get through this period, when we get to that $1 three of digital revenue and achieved $450 million of EBITDA.
Probably.
Six to 12 months delayed on that given the AD market in a few of the migration.
Slowdowns, but as Neil said.
We are.
Confident we'll be there by the end of Q3.
Our next question is from Eric Sheridan Goldman Sachs.
Thanks for taking the questions maybe a few if I can.
Looking at the shareholder letter I think the thing that stuck out was.
First on the macro side Youre bifurcation of the market between enterprise and consumer trends.
Can you flesh that out a little bit in terms of what youre seeing and how you are preparing some of your consumer business is for what your assumption is about how the consumer spending habits might change in the back part of this year and into 'twenty three second after letter bought back stock for the first time in four years, but there was also sort of an application that <unk>.
In a market might move back more in your favor when you see compression in sort of public versus private valuations would love to get an update on the broader capital allocation strategy versus what youre seeing in your own stock versus the broader M&A, maybe if I could just sneak in one last one on care I thought it was interesting to call out elements of how <unk>.
It might pick up in September when you get back to work back to school and the elements of how you are planning for an improvement in demand and investing behind care broadly the platform. Thanks, So much guys.
Fair enough.
I will take office as far as the macro environment.
<unk>.
This has been a very clear disparity we've seen so far.
Presumption is that corporations are ahead of the consumer on this.
Meaning youre expecting the consumer to get worse, and therefore preparing for that and we don't know what that ended up being the case or not but being prepared just means that we're being much better on expenses.
We're focused on margins that we have that flexibility if consumers are spending less.
And thats entirely possible. It also means thinking about our products in the context of what that means in consumer spending less we've talked about angi <unk>.
Not a terrible securing major brands, you because and service requests come down the service professionals are more.
Interested in our platform and more interest in what our platform can deliver and therefore, we have to make sure that he has always brought up that servicing that part of the market and is well prepared for it.
And as you go through business by business, but the main theme is tight.
<unk> expense is tighter Marvin leave ourselves room for.
As we get to spend less so that we can operate in that environment.
As it relates to M&A or share repurchases.
Always both are on the table today those are on the table.
M&A is evaluated against share repurchase.
And.
These things happen to be highly correlated meaning at the M&A market cheaper. So does our share price and we will look at both of those things at the same time.
Make decisions benefit and share repurchases as of course, we know those businesses very well and how theyre doing and what their prospects are and what their issues are.
So we can do that well.
But we are interested in finding new business, Brian and we're going to continue to look there and we have the capital to do it.
So so looking there is very much something that we're looking at M&A is very much something that we will be active in and I still think that the public markets.
Those opportunities are much more attractive than the private markets. It takes time for the private markets catch up and they haven't really yet good companies raised enough money, where they don't have to worry about a favorable outcome.
So I think the opportunities are aggressively.
Public markets today.
As far as care.
We.
The back to school is always been a big moment for the care business also important actually for historically.
But is a big moment, because thats when seasonally a lot of people are looking for fair.
And it's very hard to see trends right now given the impact of the pandemic and so it may be that if some of that was pushed out a little bit where we saw the demand.
<unk> come down or not accelerate as much as we expected in July that seems to have started to actually come back in later in July .
In early August so.
Very hard to read the trends.
The things that will matter in driving that business is product.
How quickly are you Sir.
Family confined the caregiver and.
How easy that match assets and the work we've been doing over the last few years is to improve the efficiency of that and we've seen that getting better.
Instant book with a great.
A handful of that product, which is now live.
There are people can find a caregiver instantly for a specific time on a specific date and.
And we think that things like that can drive frequency on to the platform, which is good for both sides.
Marketplace.
When you're in kind of books of instantly and more importantly, when you know that you can find it somebody else will need the platform more often.
And so that product is now idle and we'll see how that goes.
And the other product that's new right now.
Contributing in the second half newish competing.
Yes.
Matching.
Families with daycare centers and trying to see momentum on that.
And that will start to contribute.
And then better prize business.
As a E also picked up momentum recently.
Seasonally in the back half of the year is where we will really see that but.
We now see employees and enterprises, increasing utilization increase.
Increased utilization meaningfully and we think that will be a big driver.
Okay.
Our next question will be from Jason <unk> at Oppenheimer.
Hey, guys. Thanks, just want.
To dig a bit more we're getting questions from clients just on angi and the monthly trend. If you can unpack it and so with the slowdown that you saw in July .
Maybe you can kind of reconcile that versus June do we think about the business being kind of a high single digits and ads in Leeds in the back half.
Kind of be low teens, and then just maybe help us understand some of the marketing decisions youre thinking through machine.
As you are kind of thinking about growth versus margin for the back half. Thanks.
Sure. Thanks, Jason So in terms of the ads and leaves business, where obviously.
Bunch of stuff going on in terms of lapping the rebrand we've got Angie brand continuing to be.
<unk> to grow pretty aggressively.
Outperforming I think the expectations that we had so the consumer demand can lean in that brand continues to be strong the home advisor brand continues to be a drag.
In terms of consumer demand net net.
You put that together with the pretty stable revenue that we get from the ads business.
I think we expect things to improve from here. So I think overall on ads and leads.
More positive than we were a year ago. When we started the rebrand and certainly more positive than we were a quarter ago.
And overall, that's flowing as Kristian said down into profitability because that business continues to be incredibly incredibly profitable you put that together with the services piece as a impact in the beginning.
Services business.
Serious headwind on roofing that took us down from the 34% into the 18% range as that fixes itself and we fix the roofing business will take US a couple of quarters to do it probably.
We expect to get back into ultimately get back into the 15% to 20% range.
At some point in the next year so overall.
We feel like the tradeoffs, we're making on growth versus profitability are the right ones, we certainly dialed the levers more toward profitability, particularly in the underlying businesses or services. So those are our book now business, our retail business, our managed projects in our roofing business. So each of those individual business.
Units definitely dial more toward profitability and that's had an impact on the growth rate, but we think it's the right thing to do in terms of marketing we havent yet.
Haven't yet deployed any meaningful marketing dollars against services all the marketing dollars, we deploy continued to be against the ads and leads business and the services business simply still drafts off <unk>.
Dropped off.
The excess demand created by the by the ads and lease business. So those three products together add leasing services you put them together they still represent the best product in cloud in terms of.
How to serve frozen how to drive business, there's nobody else with those three products. We absolutely believe that the combination of ultimately drives more revenue more market share and eventually more profitability.
And overall I think we're making the right trade offs between growth.
Revenue growth in revenue profitability and how we're deploying those marketing dollars I think the question that typically comes with when will you deploy.
When will you deploy marketing dollars against services and that still remains to be seen it's still isn't something we need to do if we get to a place where consumer demand.
Is it more.
Much more imbalance with our pro supply across the three businesses and we will we will lean into that we haven't we haven't had the need to do that.
It had the need to do that just yet but it is something we continue to evaluate all the time.
The only thing I'd add.
With respect to services monthly trends.
It was a stark hit in to growth in July from from roofing as Ashish said before.
Roofing did about $9 million of revenue in July it had been averaging $14 million a month across Q2.
And that is not in our mind macro that's not due to any decline in demand.
We just got ahead of ourselves and aggressiveness on price and some other operational.
Challenges that our sheet and team are focused on and really that's the focus on price started in early June so.
They have an own goal there, but we feel very good about the overall growth rate of the rest of the services portfolio, we feel great about the long term growth rate of services.
And we just got to get roofing chugging as evidenced by the.
The $14 million revenue earlier in Q2, which was up substantially on a pro forma basis. So that's the point of focus right now along with continued growth and profitability and as it meets score fewer own goals correct. Okay will always hold strategy.
Working on that.
Thank you.
Our next question will be from John Blackledge with talent.
Great. Thanks, maybe two on Dr. Meredith for Neil.
Can you provide some further color on the digital optimizations of the Meredith brands, which brands have been converted and then kind of what results are you seeing and then secondly, any color on the brand versus performance mix.
Meredith.
How is brand versus performance relative to the pro forma digital down seven <unk> and down 12% in July . Thank you sure. So let's do.
But due to the migration when first first question first and then.
So just taking a step back and remember the migrations are to unlock.
Two things for US one it unlocks all the audience growth are.
<unk> weapon delivery to make things great sites. The second thing is it unlocks performance, meaning we get the ability to have extremely fast sites and fewer ads that perform better which means better ROI for advertisers, where they come in programmatic or premium and it unlocks our ability to do commerce.
<unk>.
We've migrated now and I have the list here seven sites health first people. Most recently parents instyle travelling leisure shape, better homes and gardens and they skewed towards most recently and when people. We did last week. So we can look at the curves that we've seen in the past what we've done and if you take a bath.
<unk>.
Bertie invested PD.
<unk> Dot com, which is a good cross section of different types.
It'll migrate here if you look at traffic grows our audience. It was just keep it simple traffic growth to keep them busy and four months, we typically see on average they're a bumpy. So your blended up call it 10% to 15% growth.
A year you blend without worrying about 30 18 months Youre close to 50.
<unk>.
That is from on.
On the more performance site you just build a much better experience for you all the things that we've done and it's worked.
We launched first health is very comfortably August curve, the others because there have been a little late are a little harder to read suggesting two recent I would say parents is probably on the curve as well as we get that one in late may but most everything else was done in June July so.
Early reads are positive I think the one thing that we can say with confidence is.
These brands have exceeded our expectations in terms of when you make changes how consumers will respond algorithms will respond how advertisers more response.
These brands have a superpower people better homes and gardens as its 100th anniversary. It is a significantly more substantial brand and spruce, which we made the largest home site on the internet. So the baked in opportunity there is really compelling.
So that's sort of both on the on the scale side on the monetization side to answer other questions. There's three ways that we make.
One we.
We sell premium ads to we do a lot of programmatic ads and three we do performance marketing e-commerce and various transactions, helping people source goods and services.
Programmatically.
<unk> first we essentially put the two stacks together. So we are brand new and we are learning what I mean, but we are learning as we now have this incredible scale of this really valuable et cetera to contract and every time you migrate a site that gets more powerful because you're always things gets better the ads get more performance as we go through that its almost like starting from scratch we have to learn.
What AD units to use set up on all the old Meredith flex is totally different so what units are using what AD types are we accepting how are we doing floors, how recording with demand sources. So we're really learning and we're very optimistic of our ability to take up yields programmatically premium I mentioned in the first answer.
This incredible opportunity, we have something other people cant replicate nobody can do our performance at scale on these brands. It is our job to tell the story and we are out now telling your story.
<unk>.
AD integrations or heart, we knew it was going to be hard.
Definitely heart, but it's also really fun and it's working and it's fun to be received by clients and it's fun to be received by the big agencies and the reception. We're getting is outstanding yes, obviously, the headwinds of the market, but frankly in the longer term, it's not going to be in the next month or in the next quarter, but in the longer term.
I believe we should outperform the market because we have an offering that is significantly better than the rest of the market. We can address branding. We can address performance. Our sales guys are learning how to sell this.
We have to bring the hustle across the portfolio, but we're doing that we feel very good about it. The first thing we're going to do for yield while we feel very good about this is the commerce piece markets and the transactional piece of our business and remember we talked about this.
When we did the deal the primary way that we've done transactions and commerce historically has been sort of like very detailed guidance ratings reviews that stuck sort of things.
Despite all of the brands they've had never really engaged in this sort of commerce. The only thing that they really leaned into what sort of like the news and deals commerce, how do I buy what kind of brands or last night on people.
But on the.
But the real opportunities on these incredible sites, but real simple the peoples of better homes and gardens food and wants how do we do our type of commerce, there and as soon as we get the migration done real unlock our capabilities as we get going so.
A long answer of saying.
We feel very good about the supply side, we feel very good about the demand side with market is obviously bumpy and a drag on that but we just got to execute.
It's kind of put it all together.
The second question was how do we view ads and performance marketing what I would say generally what Joey wrote in the letter seems to be true, it's not totally predictable.
I hope so yes.
It seems to be true for us it actually is progressed where.
The transactional business.
In categories, that's how long fairly well year over year. The AD stuff has been more challenged I would say we have some specific things baked into our results like we had a huge business, helping people with peripheral accounts last year. That's obviously not what happened we had a couple of outliers that.
Maybe nicked us to the downside, but overall.
The commerce business. The transaction. This is the primary business has been fairly strong.
And just a few points that we'd add.
The overall arc of Neil's summary of the business.
One.
As we go month to month, and obviously, we produce monthly metrics. So you have great insight into our trends I think across these youre going to have noise month to month. So.
<unk>.
Holidays et cetera, but as we move throughout the year, our comps at Dot Dash Meredith do get each year.
In the fourth quarter.
The.
Especially at the Meredith properties, which were quite slow at the end of last year, probably due to distraction due to the acquisition, which put us.
Behind where we want it to be entering this year.
But we are for all the reasons that Neil highlighted.
We are seeing.
We feel good about revenue improvements as we go along.
He will be overall environment in the fourth quarter, and where people are on holiday advertising holiday spend.
But we feel.
Momentum against the comps in that period. The other is unprofitability basis, the cost savings that.
That we've driven.
<unk> phase in as they are annualized each quarter and so we do expect to see continued margin improvement in the fourth quarter.
Thank you our.
Our next question will be from the use of quality assurance.
Okay.
Great. Thank you very much so a couple of questions from me, maybe staying with Neil there.
Can you maybe just talk about the base case for growth for <unk> digital.
As you exit the year I think before we have talked about continuing to 20%.
And then maintaining that through 2023. So how are you thinking about that now and then on the print AD business up 3% into the quarter that was nice to see but can you speak to the puts and takes there and how do you think how sustainable is that is that is that positive growth. There. Thank you.
I'm just happy we've got a great question.
But I have to ask.
I appreciate that.
So again I think we said when we bought this thing that we're going to approach it differently and I think.
What print can be for us it.
It is not going to be economic drivers of the business, but it is a very important brand driver for everything we're doing and we've seen that in line with its continued success, we have seen that better homes and gardens, we have Harry styles of the cover it really helped rebrand better homes and it carries over to everywhere else. It as a brand leader now it can be.
Nice profitable business and Chris can talk about I look at it and what we think the EBITDA can do what we did was we made.
The hard decisions very quickly we shot.
Series of properties as you know we've got down to seven titles, we have outstanding publishers outstanding editors.
We improved each of the products like Youll see to do better.
Paper quality, it's a little bit more of a luxury good I mean again I don't want talk too much about print, but more paper books were sold in electronic books last year or so.
People still buy vinyl records people love these things on.
We're doing really well and theyre good brand leadership.
The.
Fewer properties has definitely helped.
The AD business, but also.
Quality and it.
It's working and frankly when you go from 15 to 17, you got to keep an all star team people, obviously, but we have are essentially the all star team.
Ben.
So really positive.
And frankly, it's been a really positive morale thing for our company because we've said that we keep saying is we have brands. We have the best brands in the world, whether it's tick talk whether it's print whether it's Instagram whether it's the web that's what we have and that's what we're doing and if we're going to do something we're going to be the best at it and I think thats really internally been a big win.
For Us talk about base case for growth for the year I think we mentioned it a little bit I think we're going to see hopefully monthly improvement now hopefully we will see monthly improvement for the rest of the year again as Chris said, it's going to be bumpy, it's probably not going to be linear given decisions, we're making given frankly ics patience with us.
US and encouraging us to do the right thing to do the right thing.
<unk> cut which had been very frame for US you guys understanding the transition here has been very helpful.
But I think by the end of the year, we should be back to growth in the 15 to 20 percentage in play for next year and I'll, let Chris give you more color on that yes, I think with respect to print.
We have always positioned it as we'd like the EBITDA for adjusted EBITDA from print to cover our corporate expense give or take in any quarter and year.
With the profitability trends that we're seeing in the strong performance in print.
On an adjusted EBITDA basis, there is a lot of noise in print given the restructuring that occurred in February and ongoing.
Nonrecurring costs associated with that but on a.
Recurring adjusted EBITDA basis, we feel good about that coverage of corporate and our cheered by the momentum we see in advertising and print for the core titles in the portfolio.
More broadly on the cost structure.
We just look to see continued scale in digital.
One of the key things we look at is the marginal profitability of a dollar of digital revenue.
Our targets are to get to to maintain 50% to 60% and north of that drops to the adjusted EBITDA line.
And we feel good about what we're seeing the key there is then is.
Neil said previously is to drive the consumption the engagement and the premium sales. So that is the business plan keep bringing digital revenue in.
Maintain that incremental profitability on a dollar of digital revenue and have it dropped to the buy online and we are very much in that path.
Our next question will be from Daniel.
Mark.
Great. Thanks, I guess I'll stick with that point, you might get two quick questions here.
Just maybe even even for Chris too.
No that Meredith national portfolio tends to reprice kind of going into year end.
Sort of a big setup here.
You guys have clearly taken an aggressive stance.
On cost reduction there so if things get a little bit worse, I guess I'd just like to hear your answer on that.
Do you believe you have.
Youre not going to be impaired by anything that happens in freight and your ability to invest in underlying DBS and attached to that.
When you guys made the acquisition I may have referenced that you might find a few more dollars in the seat cushions.
The sort of underlying synergies and you've already started to acknowledge that so.
You gave some good color, Chris just around that to get to the $4 50, but.
I mean, if those do we think of that incremental synergy as additive to that or that's just broader.
ADM and not necessarily digital related on the synergies.
Hello up sort of more operationally for Neil.
Sure. So let's talk about pretty question first the answer is no.
What we are doing footprint, because we are making.
Products and property assets that help our brands.
I think we have significantly derisked.
Print business from where we started and we will print in 2023 wheel print probably a little bit.
Fewer than half.
The number of megabit to predict 2021, so we are.
I think we are very realistic of what we think can be we think that could be a very nice business and we're being extremely judicious with expenses, we're making smart investments to if youre going to do something you have to be good at it.
But I think where appropriate with the type of rigor you would expect if you followed us certainly followed ISC for a while.
Good about it.
C questions question.
I think theres someone with public company for a while.
Before we bought it because that is correct and I think we said, we'd there'll be about 50 and synergies were I think plus or minus a 100 now.
Is there more is there less I don't know, but we are approaching this with.
Sure.
A lot of rigor and look it's a good fresh eyes on something that has that fresh eyes on it for a long time to find things and.
Where we are so I don't know Chris takes us over the rest of it.
Yes, I'd say, we wouldnt make any decision with respect to <unk>.
<unk> investment in digital.
We do have a view, having medium and long term value for that core business and.
And not do it because of headwinds in print that's just not how IAC thinks that that Meredith, thanks, and our belief in.
The long term value thats being generated there.
Perspective.
Cost savings and long term profitability of the business I think I understand your question certainly those were a key element of the $450 million EBITDA target and they are just because as you drive efficiencies and you drive margin scale that.
That is a key boon to profitability.
But.
We knew 2022 is going to be a noisy year with.
Restructuring.
Some of the Dot dash title Meredith titles back when we migrate them to allow them to run even faster.
As Neal has articulated post migration.
Layered on is the <unk>.
AD slowdown that we've all experienced really in May June .
Into July as a number of companies, especially in retail and CPG put on the brakes, but we have significant confidence that well all of those cost savings are not appearing right now in the P&L because of the digital compression or the digital slow down our revenues they will as those dollars come back.
Because we have.
Real cost scale in the business and we have a tight.
Machine at Dot Dash Meredith digital.
I think we're answering that question.
I would go back to you for follow up.
Yeah. Thanks, that's helpful. Neil kind of part fair part unfair just gave some good color on sort of the E com, which we knew was underpenetrated at Meredith and I really want to get a sense from you.
The unfair part is youre not even done with the migration, yet asking you questions about whether or not you're finding a way to leverage Meredith licensing capabilities, but clearly you have more to go there and then secondarily a little bit more on the fair we've seen a lot of guys aggregates, but the reviews angle I think of the market you guys clearly have a differentiated.
Scale and it's taken market leadership in a number of different verticals. So I'm. Just wondering what you guys are doing to sort of differentiate and how you look at this marketplace and good people and say hey look.
We can provide incremental traffic and or purchased our sales to you in a downturn. So just maybe some incremental thoughts on E.
E Com.
I think the second question first which is my favorite question.
But we can actually sort of a vital but a big driver of why we're so excited about this transaction is Meredith has not historically done type of commerce transaction sourcing that we've done and remember our the way we got into Commerce was not we decided that we need to get into commerce. It was because our brands have talked Ashford very trusted.
The next step of making the blueberry pie is figuring out what when do you need to make it and then we thought we should start to recognize whether it's.
From that sort of like humble start three or four years ago, which happened very organically, we now have.
50, or 60 test kitchens.
The numbers slightly wrong.
10, or 15 video.
Tiger three studios fully blown out product testing labs and in north of 200 person crew of people that rigorously measure test and try every single thing that we recognize so.
Our advantages.
We're good at the Internet and.
We are.
Very rigorous at all of the things somebody wants to trust to make a purchase now for whatever reason people don't trust retailers. They don't trust their views on retailers that are trusting straight with them. So this middle layer that we are now is becoming increasingly important and what we have set up to do and we actually took Joe.
Barry go see.
See it where do we do in Birmingham, Alabama on Iowa.
It is incredibly rigorous and it is our advantage the advantage of scale and our ability to do these things at scale and to test every single thing that we put on the Internet with pictures and with videos is a real real advantage that we do.
Done that adopt dash has worked.
Barely scratched the surface, we have not started to roll. These things actually just started to roll. These things out in a few of the properties as they migrate like better homes and gardens. We think has a massive opportunity I mean part of the reason this Bruce has been so successful as some of the other guys. In this space upon paid attention space is big enough for two or three or four or five of these guys are selling catalog.
So.
We feel really really good about this opportunity it was a big driver of what we're interested in it works when you look across the portfolio. It works a traveler leisure and it works out to Hawaii.
<unk> works with people that works everywhere, so we feel.
Really really good about it and I think that probably got both of your questions.
That was close enough and you got to Prince I'm, sorry, Joe I don't have a search question for you. So thanks everybody.
Alright.
Our next question will be from Brad Erickson at RBC.
Yes.
Hey, Thanks for taking the question. This is Logan on for Brad.
Just a couple of quick questions on the July growth metrics that you guys did the 10% total consolidated do you guys have that number ex roofing.
Just kind of curious on that one.
Then any sort of one off items in July .
Aside from what you've already mentioned that you would extrapolate or could we kind of.
Consider the July growth rate as a proxy for for the rest of the quarter and then just on margins. How are you guys thinking about.
Second half EBITDA I know you guys said it would be slightly above 21, just kind of curious if you have any more color on that.
That margin expansion. Thanks.
Excellent.
Ex roofing.
Overall angi growth would be.
Just over 12%.
And.
That and that is driven by you talked about the decline.
John I think the first yes, so just to.
Unpack that a little more X roofing the overall LNG growth as Chris said would've been 12 X roofing the services growth would've been 34, we expect we.
We expect our services business to continue to grow in or around that rate, perhaps a little faster, perhaps little slower obviously, the some of the metrics are volatile and as we recover as we recover in roofing, we will we'll get the overall growth rate overall growth rate back up.
In terms of the sorry the.
Part of the question was around can you repeat the other part of the question.
Logan.
Yes, sorry, I was just saying.
Is it fair to extrapolate kind of July trends through the rest of the quarter and then the last question was just on the two H EBITDA is that still kind of in line with your original guide or slightly above 21.
So the trend that we're seeing right now is for increased profitability from where we are we've said that 'twenty two profitability.
Other than 'twenty, one, we've obviously overachieve and overachieve in Q2 in terms of profitability we expected.
We continue to see positive trends as we discussed in services, where we're past the proppant into our past peak investment, we expect profitability to improve and the <unk> business as we get it we get it back towards high single digit from mid single digit growth.
Talking about before that pretty much drops that drops rapidly to the bottom line. So we're.
Very happy with the profitability, we expect for the balance of the year.
And.
We expect things to improve from here.
Our next question will be from Brent Thill of Jefferies.
Thanks, Joey on care.
Was it only growing 10% in Q2 can you provide your view and aspirations for longer term growth overtime.
Yes.
It is a very large market that we're still underpenetrated and so I think sort of a second half of the year.
For the 10% to 20% and I think we've tried to accelerate from there.
That will depend on getting enterprise going with new sales and.
Okay.
The impact of the instant book business and again, it's not so much that we drive dollars an instant bookings, but it is we drive frequency subscription product from people having the ability.
Gains on there and how that impacts your behavior.
But thats, what we look for because we think we are in.
A very big market with with a lot of room and a leading product.
And.
The only thing the only thing I'd add.
As we disclosed in the letter first.
Four months of the year, you really had consumer growing it.
Plus minus 30% and enterprise flat.
Joey point.
We will lap we will lap the challenging COVID-19 comps.
Early 'twenty, one and care, we will get it back to growth and it'll be less of a drag on the business. So.
First half was tough, but we feel good about the long term opportunity in the enterprise space.
And a quick follow up on the capital allocation I mean, it was good to see the buyback come back in but many would ask you have 7 million authorized shares why not be more aggressive is that.
Youre, implying you want to do a larger transaction is it implying that you are still worried about the core business still I think there are some questions why not why not why not lean a little harder here.
I think you can always ask that question. There is always room for more than and we ask ourselves that question. When we look at it I certainly would not read into it that.
We're worried about the business I mean, you heard from Neil Ashish today.
Businesses are in a good spot.
Tough macro environment for the businesses are in good spot exactly what we need to do it at that area and we have I think the best product in most of the categories, where we published.
We know exactly what we need to do enhancing the leading product in that category and the full suite of products in that category and we are starting to drive profitability in that business. So we like where.
The businesses are right now.
Yes.
Overall market I'm probably.
Negative on just from the underlying thing.
Going on in the world, but.
So thats why were sort of patient on spending money, but.
Our business is great right now and share repurchases is something we always have evaluated and will continue to evaluate and again at any point when you talk about how much we bought we always good about more or less.
It's hard to read anything into.
Yes.
Thank you.
And we've got one last question in the queue.
Yes can we go to.
Tom Champion at Piper Sandler.
Okay. Thanks, Thanks, guys I'll be quick.
Okay, maybe you could just talk about demand specific to home services.
How do you think the consumer is holding up and maybe you could reconcile that with maybe de prioritizing.
Spend on on the home just curious if inflation is having an impact and then just last one quickly.
Date on <unk> subs.
In the quarter, where that ended up thank you.
So I'll hit them in reverse order thanks for the question.
<unk> key over 300000.
Angie key members right now continue to be very engaged continue to have.
Okay.
I guess.
Retention and engagement characteristics above where we are.
Where we would have expected them to be versus normal consumer so very happy with that.
We are continuing to build out that product and expect to add more features to it we're testing a couple of new things on it but it's still a pay to save pay to save membership program that we're very happy with.
In terms of overall demand I think the point that Joey made which is we have this suite of products is really important. So we've got this adds leads product or adding these products, where we make money when pros need more work and we've got a services product, where we make money on the back of consumers driving towards convenience purchase.
Those two things together in a slower environment.
<unk> product actually goes better so as as pros need more work every incremental MSR that we have is worth more money to them and that's a really important topic that perhaps gets lost sometimes but as the macro environment slows down whether its because homeownership or home transactions slow down.
A little bit and home services slow down a little bit it's really important that we maintain our share of the overall home service requests.
A moderate slowdown in home services is actually really good for the demand for our pros using our product and we've seen that so we've already seen that in the last couple of months, where our pros are more engaged they are active for match more so that means they're turning their leads on more their willingness to pay per lead has gone up and overall, we think that.
Moderation in demand is a very positive thing.
For the largest part of our business.
The only thing I would add also.
Being newer to the business.
We knew April and May would be substantial comps in terms of the demand.
Across the U S for home improvement and overall services.
We said in the letter.
Sort of 5% to 10% top of funnel a little bit lower conversion.
It feels that just reduced activity around home.
Macro pressures those would be probably less of a factor in that magnitude given how elevated last year was.
But the other part of this is the health of a two sided marketplace.
She has commented and more of a match between supply and demand accrues to the benefit of the AMG marketplace and now we've just got to keep improving product and experience and capturing pro demand.
With that I think we will wrap up the call and we thank all of you for your time.
And wish you a good day thank.
Thank you.
Thanks.