Q1 2024 IAC Inc and Angi Inc Earnings Call
Operator: Good day, and welcome to the IAC-ANGIE First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode.
Good day and welcome to the IAC Angi <unk> first quarter 2024 earnings conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity.
Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note This event is being recorded. I would now like to turn the conference over to Christopher Halpin, CFO and COO of IAC. Please go ahead.
Ask questions to ask a question you May Press Star then one on a touchtone phone.
To withdraw your question. Please press Star then two please note.
This event is being recorded I would now like to turn the conference over to Christopher helping C. F. O N C O O of IAC. Please go ahead.
Christopher P. Halpin: Thank you. Good morning, everyone. Christopher Halpin here, and welcome to the IAC and ANGIE, Inc. First Quarter Earnings Call. Joining me today is Joey Levin, CEO of IAC and Chairman of ANGIE, Inc., and Jeff Kipp, CEO of ANGIE, Inc. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter, which is currently available in the Investor Relations section of IAC's website. We will not be reading the shareholder letter on this call.
Unknown Attendee: Thank you good morning, everyone, Christopher helping here and welcome to the IAC and Angi <unk> first quarter earnings call. Joining me today is Joey Levin CEO of IAC, and chairman of emptying and Jeff Kip CEO of Angi <unk>.
Unknown Attendee: Similar to last quarter supplemental to our quarterly earnings releases IAC has also published its quarterly shareholder letter, which is currently available on the Investor Relations section of Iac's website, we will not be reading the shareholder letter on this call.
Christopher P. Halpin: I will shortly turn the call over to Joey to make a few brief introductory remarks, and then we will open it up for Q&A. But before we get to that, I'd like to remind you that during this presentation, we may discuss our outlook and future performance. These forward-looking statements typically may be preceded by words such as, we expect, we believe, we anticipate, or similar statements. These forward-looking statements are subject to risks and uncertainties, and our actual results could differ materially from those expressed today.
Christopher: I will shortly turn the call over to Joey to make a few brief introductory remarks, and then we will open it up for Q&A.
Joseph M. Levin: Before we get to that I'd like to remind you that during this presentation, we may discuss our outlook and future performance. These forward looking statements typically may be preceded by words, such as we expect we believe we anticipate or similar statements. These forward looking views are subject to risks and uncertainties and our.
Christopher: Actual results could differ materially from the views expressed today.
Christopher P. Halpin: Some of these risks have been set forth in IAC's and Angie Inc.'s first quarter earnings releases and our respective filings with the SEC. We'll also discuss certain non-GAAP measures, which, as a reminder, include adjusted EBITDA, which we'll refer to as EBITDA for simplicity during the call. I will also refer you to our earnings releases, the IAC shareholder letter, our public filings with the SEC, and again to the Investor Relations section of our respective websites for all comparable GAAP measures and the full reconciliations for all material non-GAAP measures. Now, I will turn it over to Joey.
Christopher: Some of these risks have been set forth in IAC and Angi <unk> first quarter earnings releases and our respective filings with the SEC.
Christopher: We'll also discuss certain non-GAAP measures, which as a reminder include adjusted EBITDA, which we'll refer to as EBITDA for simplicity during the call.
Christopher: I will also refer you to our earnings releases the IAC shareholder letter, our public filings with the SEC and again to the Investor Relations section of our respective websites for all comparable GAAP measures and the full reconciliations for all material non-GAAP measures now I will turn it over to Joey.
Joseph M. Levin: Thank you. Good morning, everybody. Thank you for spending some time with us this morning. I won't repeat the numbers you've seen posted.
Joseph M. Levin: Thank you good morning, everybody. Thank you for spending some time with us this morning.
Joseph M. Levin: I think we had a great quarter with real progress on growing profit and free cash flow, and that puts us in a solid position to deploy capital from here. The biggest news in the quarter was that we're starting to participate in the new AI ecosystem in a tangible financial way. We announced the deal yesterday with OpenAI where we'll be compensated for enhancing the ChatGPT experience. We'll start to hopefully get some incremental users to our properties from ChatGPT, and we are going to collaborate on Decipher, which is a product inside of dot dash Meredith that we think is the future of advertising on the open web and where we've been growing nicely and, we think, generally taking share on the open web.
Joseph M. Levin: I won't repeat the numbers you've seen posted I think we had a great quarter with real progress on growing profit and free cash flow and that puts us in a solid position for deploying capital from here.
Christopher: The biggest news in the quarter was weak.
Christopher: We're starting to participate now and in the.
Christopher: The new AI ecosystem in a tangible financial way, we announced the deal.
Christopher: Yesterday with open AI, where we'll be compensated for enhancing the chat GPT experience.
Christopher: We all will start.
Christopher: Start to hopefully get some incremental users to our properties from tat GPT and we are going to collaborate on decipher which is product inside of that as Meredith that we think is the future of advertising on the open web and where we've been growing nicely and we think generally taking share.
Joseph M. Levin: And hopefully, that agreement is just the beginning of other opportunities for us in that AI ecosystem. And we're incredibly grateful to OpenAI, who from the very beginning here has been a leader in the category, including with their first product, which really opened the dam for everybody competing in this area, and hopefully, they'll similarly act as a leader as they have done in the agreement with us, starting the opening the floodgates towards new opportunities for us in that area.
Christopher: On the open web.
Christopher: And hopefully that agreement is just the beginning of our other opportunities for us in that AI ecosystem.
Christopher: And we're incredibly grateful to open AI, who from the very beginning here has been a leader in the category, including with their first product would really.
Christopher: Opening to the dam for everybody competing in this area and hopefully they'll bill.
Christopher: Similarly act as a leader as they have done in a in the agreement with us in starting the the opening the floodgates towards.
Christopher: New opportunities for us in that area.
Joseph M. Levin: I also want to welcome back Mr. Kipp. He actually used to be on this call eight years ago and is back in a new capacity as CEO of Angie. I'm not just thrilled about that because it lightens my load at Angie. I'm thrilled about that because I think Jeff has been, or I know Jeff has been, involved in this business in a meaningful way for a very long time. Going all the way back to his role as CFO of IAC many years ago, where he spent an enormous amount of time getting deep with what was the predecessor to Angie, Home Advisor, and then spent the last eight years very much in the details of the business running the international business for Angie.
Speaker Change: I also want to welcome back Mr. Kipp.
Mr. Kipp: He actually used to be on this call eight years ago and is back in new capacity as CEO of Angi I'm not just thrilled about that because it lightens my loaded Angie I'm thrilled about that because I think Jeff has been or I know that has been involved in this business in a meaning.
Speaker Change: Full way for a very long time.
Speaker Change: Going all the way back to his role as CFO of IAC, many years ago, where he spent an enormous amount of time getting deep with what was the predecessor to Angie home advisor and then spent the last eight years.
Speaker Change: Very much in the details of the business in running the international business for Angi and you've seen as we've reported tremendous progress in that business and I'm really excited now that Jeff has the entire anti business and and.
Joseph M. Levin: And you've seen, as we've reported, tremendous progress in that business. And I'm really excited now that Jeff has the entire Angie business and is very focused on the key to succeeding in that business, which is delivering jobs done well, and I expect a job done well out of Mr. Kip. So welcome, Jeff. Let's get to questions.
Speaker Change: Very focused on the the key to succeeding in that business, which is delivering jobs done well and I expected job done well out of Mr. Kipp. So welcome Jeff.
Speaker Change: Uh huh.
Speaker Change: Let's get the questions.
Operator: Operator, first question, please.
Speaker Change: Operator first question please.
Operator: We will now begin the question and answer session. To ask a question, you may press star and then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star and then 2.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two our first question comes from John.
John: Blackledge with Cowen. Please go ahead.
John Blackledge: Great, thanks. Two questions. First, for DDM, overall revenue growth beat our forecast. Could you just unpack the growth within DDM digital revenue across advertising performance and licensing and maybe how that should trend going forward? And then I have a follow-up on the OpenAI deal.
John Blackledge: Great. Thanks, two questions first.
John Blackledge: For Dd's.
John Blackledge: Overall revenue growth.
John Blackledge: Beat our forecast could you just unpack the growth within <unk> digital revenue across advertising performance in licensing and maybe how should that trend going forward and then I have a follow up on the open AI deal.
Unknown Executive: Sure. So we felt great about the performance of dot dash Meredith digital and in Q1. Overall, digital revenue grew 13%, led by 19% growth in digital advertising. And that's due to the combination we've talked about before, 8% core session growth and then improved monetization across both premium and programmatic. Advertiser spending is firming up. It's not a hot market or on fire, but it's better, and it's strengthening.
John Blackledge: Sure.
Speaker Change: So we felt we felt great about the performance of <unk> Meredith digital and.
Speaker Change: Q1 overall digital revenue grew 13%.
Speaker Change: Led by 19% growth in digital advertising and Thats due to the combination we've talked about before.
Speaker Change: 8% core session growth and then improve monetization across both premium and programmatic advertisers spending is firming up.
Unknown Executive: And that drives our premium sales. And then on programmatic, we believe we're outperforming and improving the market and that we're doing better because of our superior tech stack and performance. However, performance marketing only grew 3% in the quarter, and that was really pulled down by a 30% decline in services, which are overwhelmingly financial products such as brokerage accounts and insurance.
Speaker Change: It's not a hot market or on fire, but it's better and it's strengthening and that drives our premium sales and then on programmatic, we believe we're outperforming and improving market.
Speaker Change: And that we're doing better because of our superior tech stack and performance.
Speaker Change: Women's marketing only grew 3% in the quarter and that was really pulled down by a 30% decline in services.
Speaker Change: Such as which is overwhelmingly financial products, such as brokerage accounts and insurance.
Unknown Executive: Performance marketing for e-commerce or goods, as we highlighted, grew 18%. So we recognize we've got to continue to invest in and innovate in performance marketing, particularly on the services side, but we're confident that we'll get back to strong growth there. And then a real bright spot was licensing, which returned to growth at 9%, led by strong performance at Apple News and syndication partners. That area had been a headwind really since we closed the Meredith acquisition, but we now feel it will be a tailwind, and open AI will be a further element there.
Speaker Change: Performance marketing for e-commerce or goods as we highlighted grew 18%. So we recognize we've got to continue to invest and innovate in performance marketing, particularly on the services side, but we're confident that we will get back to strong growth there and then a real bright spot with licensing which returned to growth at 9% led.
Speaker Change: By a strong performance at Apple news and syndication partners that area has been it had been a headwind really since we closed the Meredith acquisition.
Speaker Change: We now feel it will be a tailwind.
Speaker Change: And open AI will be a further element there looking forward, we continue to see 10% plus.
Unknown Executive: Looking forward, we continue to see 10% plus revenue growth in digital each quarter and for the year, with solid execution across all three line items. Advertising will clearly lead the way as we see session growth and improved monetization. And what's your second question, John?
Speaker Change: Revenue growth in digital each quarter and for the year with solid execution across all three line items advertising will clearly lead the way.
Speaker Change: As we see session growth and improve monetization.
John Blackledge: Yeah, second question: could you talk about the DDM OpenAI deal at a high level, including key terms of the deal? And can we expect similar deals with other LLMs like Google, Anthropic, Meta, etc.? And if you don't strike a deal with those companies, are they precluded from training their models on DDM content?
Speaker Change: And what's your second question, John Yes second question.
Joseph M. Levin: Yeah, so the deal, we obviously can't get into the very specific terms. But at a high level, there are three elements to the OpenAI deal. They're displaying content and links attributed to DDM in the relevant chat GPT responses. They're using the historical and ongoing DDM content to enhance their models performance. And then there's partnering with DDM and OpenAI on building out the decipher cookie list intent-based targeting ad solution.
Joseph M. Levin: Thank you.
John Blackledge: Could you talk about the EDM open AI deal at a high level, including key terms of the deal and can we expect similar deals with other <unk> like Google Anthropic matter et cetera.
John Blackledge: If you don't strike a deal with those companies are they precluded from training their models on DM content. Thank you.
Speaker Change: Yes, so the.
Speaker Change: We obviously can't get into the very specific terms, but at a high level. There is there are three elements to the opening of ideal theirs.
Speaker Change: Displaying content and links attributed to DBM in the relevant Chad GPT responses, there was using the historical and ongoing <unk> content to enhance their models performance and then there is partnering with EDM and open AI on building out the decipher.
Speaker Change: Cookie less intent based targeting ad solution.
Speaker Change: That's a first of its kind partnership and we.
Speaker Change: We think that really enhances the future has the potential to enhance the future of privacy protected advertising in and we're excited to collaborate with them on that.
Speaker Change: It's a multi year deal and.
Speaker Change: It involves both the all the elements, we said and that includes.
Speaker Change: Financial compensation.
Speaker Change: And we are we're really excited about that deal in terms of others.
Speaker Change: I think.
Joseph M. Levin: That's a first of its kind partnership, and we think that really enhances the future of, has the potential to enhance the future of privacy-protected advertising, and we're excited to collaborate with them on that. It's a multi-year deal, and it involves all the elements we said, and that includes financial compensation, and we're really excited about that deal. In terms of others, I think, Look, as I said in my opening remarks. OpenAI led the way in showing the world the possibilities of Gen AI and a sort of chat interface, and I think that they can. I'm hoping that they will again demonstrate that they have led the way in dealing with publishers and journalism and content, and I do expect that others will follow.
Speaker Change: Look.
Speaker Change: As I said in my opening remarks.
Speaker Change: Open AI led the way in.
Speaker Change: Showing the world.
Speaker Change: The possibilities of journey II and <unk>.
Speaker Change: That's sort of chat interface.
Speaker Change: And I think that they can they I'm, hoping that they will again demonstrate to have led the way in <unk>.
Speaker Change: Going with.
Speaker Change: Publishers and journalism and content.
Speaker Change: And I do expect that others will follow that May take time, and some may may sort of go through various stages of resisting that.
Joseph M. Levin: That may take time and and some may may sort of go through various stages of resisting that but I do expect that that others will follow over time and the deal is not exclusive which means that we certainly have the opportunity to do a lot more there and and we really are grateful to OpenAI for for figuring out how to get this done and and I think really from the beginning them and under Sam Altman's leadership have had the right tone in thinking about a healthy internet ecosystem and making sure that that OpenAI but AI generally is a force of good for the world and and they've they've continued to demonstrate that so far. Okay.
Speaker Change: But I do expect that that others will follow over time.
Speaker Change: And the deal is not exclusive which means that we certainly have the opportunity to do a lot more there and we really are grateful to open AI for figuring out how to get this done.
Speaker Change: I think really from the beginning.
Speaker Change: And under the same home his leadership has had the right to own and thinking about a healthy internet ecosystem and making sure that debt.
Speaker Change: Open AI, but AI generally is a force of good for the world and.
Speaker Change: And they've continued to demonstrate that so far.
Unknown Attendee: Thanks so much, and congrats, Jeff.
Speaker Change: Okay. Thanks, so much and congrats Jeff.
Jeff Kip: Thank you.
Operator: Operator, next question, please. The next question comes from Cory Carpenter with JP Morgan. Please go ahead. Thank you.
Speaker Change: Thank you operator next question. Please the next question comes from Cory Carpenter with Jpmorgan. Please go ahead.
Operator: The next question comes from Cory Carpenter with JP Morgan. Please go ahead.
Unknown Executive: Sure, thanks, Cory. First of all, just having a full-time CEO is obviously better. And so, as soon as we could do that, we were, I was especially excited to do that. And one of the things that, besides sort of improving the business's fitness and customer centricity over the time I was there, I wanted to understand in depth the issues and the opportunities. And one of the things that became very clear in my time there was what had been accomplished in international business and what what continues to be accomplished there.
Cory Alan Carpenter: Thank you on the CEO transition Joey why was now the right time and Jack would be great to hear your vision and strategic priorities as CEO.
Speaker Change: I have a follow up on I'll, let you answer that.
Jack: Sure. Thanks, Cory I'm first of all just having a full time CEO as is obviously better and so as soon as we can do that we were or I was especially excited to do that.
Jack: And one of the things that besides sort of improving the businesses fitness and customer centricity over the time I was there I wanted to understand.
Unknown Executive: And that was a product of Jeff and an incredible leadership team in the international business that goes deeper than Jeff. And realizing that we both had the talent there and the depth there created the opportunity to elevate Jeff to run the whole business. And I think he's going to do a fantastic job, but I'll let him comment on that. But I don't think that there's really been a change in strategic vision. I think Joey has, rightly,
Jack: I understand in depth, the issues and the opportunities and one of the things that became very clear.
Jack: In my time there was.
Jack: What had been accomplished in the international business in what continues to be accomplish there and that was a product that was GAAP and an incredible leadership team in.
Jack: The international business that goes deeper than that.
Jack: And realizing that that both we have the talent there and the depth there.
Jack: Created the opportunity to elevate job to run the whole business.
Jack: And I think he's going to do a fantastic job but.
Speaker Change: I'll, let him comment on that.
Jeffrey W. Kip: I don't think that there's really been a change in strategic vision. I think Joey has rightly put the customer at the center of what we're doing at Angie. And we have really focused on delivering a better experience online. And, most importantly, delivering jobs well on both sides of the marketplace. And so the work he's done with Removing what's called empty calories and moving the business forward in terms of being customer-first is what I hope to continue. I hope we deliver more jobs done well each year from here on out. We plan to, and there's no real change.
Speaker Change: I don't think that there is really a change in strategic vision I think Joey has rightly put the customer at the center of what we're doing at AMG.
Speaker Change: And we are really focused on delivering a better experience online and then most importantly <unk>.
Jack: Delivering jobs done well to both sides of the marketplace and so the work he's done with.
Jack: Removing let's call it empty calories and moving the business forward in terms of being customer first is what I hope to continue hopefully deliver more jobs done well each year from here on out.
Jack: <unk>, two and Theres no real change.
Jack: Or you had another one.
Speaker Change: Yeah and maybe.
Speaker Change: Perhaps Chris just could you give us an update on your AG revenue expectation this year and if you think you'll need to reinvest ultimately to return the business back to growth. Thank you.
Unknown Executive: Sure, thanks, Cory. Well, first things first, we definitely don't think we need to invest more incrementally in the business at Angie to get revenue stabilized and back to growth. And in fact, you know, Jeff, Jeff can talk about it and continue a lot of the work that Joey's done. We continue to see opportunities on the cost side, and that's why we're confident in our adjusted EBITDA forecast and continued margin improvements, even with the revenue declines.
Chris: Sure. Thanks Cory.
Chris: What was the second part first.
Chris: Definitely don't think we need to invest more incrementally in the business at AMG to get revenue stabilized and back to growth.
Speaker Change: And in fact, Jeff Jeff can talk to it and continuing a lot of the work that.
Speaker Change: <unk> always done we continue to see opportunities on the cost side and is why we're confident in our adjusted EBITDA forecast and continued margin improvements even with the revenue declines.
Unknown Executive: On a revenue outlook basis for the next quarter, second quarter, we guide towards similar percentage revenue declines for total revenue at Angie in and around what we've seen the last two quarters, sort of that mid-teens level. I'd note we took further actions to eliminate low value revenues at Angie this quarter. One specific action we'd highlighted was to shutter an acquisition that was done 11 years ago called craft jack that had its own small pro network that ran alongside the Angie network.
Jeff Kip: On a on a revenue outlook basis for the next quarter second quarter, we guide towards similar to percentage revenue declines.
Jeff Kip: For total revenue at AMG.
Speaker Change: In and around what we've seen in the last two quarters sort.
Speaker Change: Sort of that mid teens level I'd note, we took further actions to eliminate low value revenues.
Speaker Change: At AMG this quarter, one specific action, we'd highlighted was to shut or an acquisition that was done 11 years ago called craft Jack.
Speaker Change: That had its own small pro network that was that ran alongside the Angi network.
Unknown Executive: We thought it'd be a nice add-on, but as Joey, Jeff, and Rusty dug in there, we realized it was not profitable and essentially was a drag on the business. So we'll see some incremental loss of revenue, and most notably for our external metrics with respect to service professionals. You should expect a decline of about 5,000 pros there, but we expect to recapture many of the leads generated through CraftJack previously directly and view it as a margin-accretive shutdown.
Speaker Change: We thought had been a nice add on but as Julien, Jeff and Rusty dug in there we realized it was not profitable and essentially was a drag on the business. So we will see some incremental loss of revenue and most notably for our external metrics with respect to service professionals.
Speaker Change: You should expect a decline of about 5000 pros there.
Speaker Change: But we expect to recapture many of the leads generated through craft Jack.
Speaker Change: Previously directly.
Speaker Change: And view it as a margin accretive shutdown.
Unknown Executive: As far as total revenue outlook, looking beyond next quarter, we want to allow Jeff to continue to develop his own view of the forward path of the business. He talked about how the strategy continues, but the specific application of that, and what revenue opportunities as well as cost opportunities he identifies. All in, though, we'd say this is in the context of the confidence we have in our guidance of $120 million to $150 million of adjusted EBITDA for the year and similar improving margins to the first quarter. Thanks, Cory. Operator, next question.
Speaker Change: As far as total revenue outlook.
Speaker Change: Beyond next quarter, we want to allow Jeff to continue develop his own view of the forward path of the business. He talked about how the strategy continues but the specific application of that.
Speaker Change: And what revenue opportunities as well as cost opportunities. He identifies all in though we would say this is and the confidence that we have in our or in the context of the confidence we have in our guidance of $120 million to $150 million of adjusted EBITDA for the year and similar improving margins.
Speaker Change: To the first quarter throughout.
Speaker Change: Thanks, Corey operator next question.
Operator: The next question comes from Jason Helfstein with Oppenheimer. Please go ahead. Thanks.
Speaker Change: The next question comes from Jason <unk> with Oppenheimer. Please go ahead.
Jason Stuart Helfstein: Thanks. I have two questions. The first, given the stronger first quarter EBITDA of both DotDash and Angie, why not raise the full year guide? Are you seeing anything in your outlook that is giving you pause? And then second, and this will be repetitive over multiple years, you talked in the letter about being frustrated with the stock price. What's the takeaway? You know, are you implying that you'll lean into buybacks if the stock does not start to improve? And just, do you think that the MGM stake is a source of capital or leverage?
Jason: Thanks, two questions first given the stronger first quarter EBITDA at both Dot Dash and Angie why not raise the full year guide are you seeing anything in your outlook.
Jason: And then second.
Jason: And this will be multi year pattern.
Jason: You've talked in the letter about being frustrated with the stock price. What's the takeaway no are you implying that you will lean into buybacks. If the stock does not start to improve and do you think about like the MGM taken the source of capital or leverage if you need it.
Unknown Attendee: Thanks, and welcome back.
Speaker Change: And welcome back Jeff.
Jeffrey W. Kip: Thank you.
Speaker Change: Chris you want to do the 100 I'll do the second perfect.
Christopher P. Halpin: Chris, you want to do the first one, and I'll do the second? Perfect. On full-year guidance, you know, for.dash, we feel confident in the momentum and outlook for the business. Between revenue growth, we are seeing the OpenAI partnership, and visibility on margins. Given the seasonality of the business, however, the full year is always heavily weighted toward the second half.
Speaker Change: On full year guidance on Dot dash, we feel confident in the momentum and outlook for the business between the revenue growth we are seeing.
Speaker Change: The open AI partnership and visibility on margins given the seasonality of the business. However, the full year is always heavily weighted towards the second half. So we thought it prudent at this point to get deeper into the year before revising guidance. That's why we're reaffirming our $2 $80 million to $300 million of adjusted EBITDA for the year.
Christopher P. Halpin: So we thought it prudent at this point to get deeper into the year before revising guidance. That's why we're reaffirming our 280 to 300 million adjusted EBITDA for the year while making targeted investments in areas like content, decipher, and performance marketing. But we would say we feel confident about being in the higher end of that range. And, you know, we'll continue to update the market as the year progresses based on what we're seeing on Angie. We achieved strong profitability in the first quarter despite declining revenues.
Speaker Change: While making targeted investments in <unk>.
Speaker Change: Areas like content.
Speaker Change: Paper and performance marketing, but we would say we are we feel confident about being in the higher end of that range.
Speaker Change: We'll continue to update the market as the year progresses based on what we're seeing on angi, we produce strong profitability in the first quarter despite declining revenues.
Christopher P. Halpin: You know, to us, that demonstrates that many of the revenues that we've removed from the business truly produce limited profitability and value. There's still more work to do in improving both the consumer and professional experience. That's a key priority. So we want to continue to maintain our flexibility to build the best business for the future. We'd say we feel good about $30-plus million a quarter of adjusted EBITDA for the remainder of the year. So we're keeping the guidance at $120-150 million. I mean, do you want to take it? Yeah, so on. Bye back, Jason.
Christopher P. Halpin: To us that demonstrates that many of the revenues that we remove from the business truly produced limited profitability and value.
Speaker Change: There is still more work to do in improving both the consumer and professional experience. That's that's a key priority. So we want to continue to main flexibility to build the best business for the future.
Speaker Change: We'd say, we feel good about 30 plus million.
Speaker Change: Quarter of adjusted EBITDA for the remainder of the year. So we're keeping the guidance at $120 million to $150 million.
Speaker Change: And then do you want to take yet so.
Speaker Change: Buybacks Jason the.
Joseph M. Levin: The Maybe a few things. One, Let's talk about the kind of evolution of thinking about buybacks and what goes into that. And certainly buybacks are on the table, which would be the shortest answer to your question. But the first step was really getting our operations in order and making sure we have a very healthy business fitness. I think we've accomplished that. There are still other things we want to accomplish along those lines. I think we've made real progress, real progress there.
Speaker Change: Maybe a few things one.
Speaker Change: And let's talk about kind of the evolution of thinking about buybacks.
And what goes into that and certainly.
Joseph M. Levin: Buybacks are on the table I guess would be the shortest answer to your question, but the first step was really getting our operations in order and making sure we are very healthy.
Joseph M. Levin: <unk> fitness I think we've accomplished that there's still other things we want to accomplish along those lines I think we made real progress real progress. There second thing is having excess cash and generating incremental cash we feel very good about where we are there.
Joseph M. Levin: The second thing is having excess cash and generating incremental cash. We feel very good about where we are there. We obviously have a prerequisite, which you highlighted already, is having an attractive valuation and believing we'll get a good return on capital. And I think that that box is certainly checked.
Joseph M. Levin: We.
Joseph M. Levin: Obviously, a prerequisite, which you you highlighted already is having an attractive valuation and believing we'll get a.
Joseph M. Levin: A good return on capital I think that that that box is.
Joseph M. Levin: Is certainly check.
Joseph M. Levin: It's also, of course, making sure we have no restrictions on our ability to buy back shares, which happens periodically. And then, and then the maybe harder one is the opportunity cost to our cash, which is that we're always evaluating a lot of things. We're evaluating new M&A for our businesses, and new M&A outside of our businesses. I think the good news right now is we have the ability to afford both.
Joseph M. Levin: But it's also of course, making sure we have no restrictions on our ability to buy back shares which happens periodically and then and then.
Joseph M. Levin: Maybe harder one is the opportunity cost to our cast switches, we're always evaluating a lot of things were.
Joseph M. Levin: We're evaluating.
Joseph M. Levin: New M&A for our businesses, new M&A outside of our businesses.
Joseph M. Levin: I think the good news right now is we have the ability to afford both and that is within your next question a combination of the cash on our balance sheet, the incremental cash, we're generating and and we do have a very very valuable important stake in MGM, we have no.
Joseph M. Levin: And that is to weave in your next question, a combination of the cash in our balance sheet, the incremental cash we're generating, and and we do have a very, very valuable, important stake in MGM. We have no intention of getting out of that stake.
Joseph M. Levin: Intention of getting out of that stake.
Joseph M. Levin: But that is that, if you want to think about our overall liquidity and sources of liquidity, that is, you know, a liquid public currency. And so that that contributes to the overall liquidity picture of IAC. Again, not to imply anything.
Joseph M. Levin: But that is there.
Joseph M. Levin: If you want to think about our overall liquidity and sources of liquidity that is.
Joseph M. Levin: Liquid public currency.
Joseph M. Levin: And so that that that contributes to the overall liquidity picture of IAC again that sort of imply anything we're very happy with <unk>.
Joseph M. Levin: We're very happy with MGM, how it is doing, and the fact that we now own over 20 percent of MGM, thanks to MGM being very aggressive on stock buybacks, buying back more than a third of the company. So, you know, there's a lot that goes into it. But the short answer to your question, Jason, is, yes, that's considering buybacks as the antidote to what I raised and what you highlighted is absolutely on the table.
Joseph M. Levin: <unk> is doing.
Joseph M. Levin: And the fact that we now own over 20% of MTM. Thank the MTM being very aggressive on cyber on stock buyback buying back more than a third of the company.
Joseph M. Levin: So so there's a lot that goes in there, but the short answer to your question Jason is yes.
Joseph M. Levin: Considering buybacks as the.
Joseph M. Levin: The antidote to what I raised and what you highlighted.
Joseph M. Levin: Is is absolutely on the table.
Speaker Change: Thank you for the call.
Operator: The next question comes from Justin Patterson with KeyBank. Please go ahead.
Joseph M. Levin: The next question comes from Justin Patterson with Keybanc. Please go ahead.
Justin Tyler Patterson: Great, thank you very much. I actually wanted to build off of Jason's last question. Joey, now that you're a full-time IAC CEO, no longer wearing two CEO hats, we'd love to hear about just how you're thinking about the evolution of IAC here. I know in the past you talked about looking at marketplaces as your preference for M&A. We've obviously seen a lot of changes within the internet landscape with Jet AI, so we'd love to hear more about just how you're spending your time these days and how you're thinking about the future of IAC. Thank you. Yeah, thanks.
Justin Tyler Patterson: Great. Thank you very much actually wanted to build off of adjacent last question. Joey now that your full five iac's CEO no longer wearing two hats.
Justin Tyler Patterson: Would love to hear about just how youre thinking about the evolution of IAC here I know in the past you've talked about looking at marketplace is your preference for M&A. We've obviously seen a lot of changes within the internet landscape with jet AI. So would love to hear more about just how you're spending your time these days and how youre thinking about the future of IAC. Thank you.
Joseph M. Levin: Yeah, thanks, Justin. It's a really important question.
Joey: Yeah. Thanks, Justin the really important question so certainly.
Joseph M. Levin: So certainly, on the spending time part of your question, very much on capital allocation, both in our existing opportunities and new opportunities, and AI is an area where we continue to try to learn and find opportunities. I think that's probably less likely from an M&A perspective. I think that while there are plenty of opportunities out there, I think that the sort of pure play AI things are currently priced to perfection, which is a hard place to deploy capital.
Justin Tyler Patterson: The spending time.
Joey: Part of your question very much on capital allocation, both in our existing opportunities and new opportunities.
Joseph M. Levin: AI is an area, where we continue to try to learn and and find opportunities I think that probably.
Joseph M. Levin: Less likely from an M&A perspective, I think that while there are.
Joseph M. Levin: Plenty of opportunities out there I think that.
Joseph M. Levin: The the sort of pure play AI things are currently priced to perfection, which is a hard place to deploy capital.
Joseph M. Levin: But many businesses, including our own, as you just saw with Dash Meredith, are in a position to benefit from AI, and that's certainly a factor as we think about new opportunities for IAC. But I wouldn't pick a particular sector right now. We're learning and considering in a lot of different areas, and we are opportunistic. We have historically done well with and liked marketplace businesses. We understand those businesses, but I wouldn't put that as a limiter on the things that we consider.
Joseph M. Levin: But many businesses, including our own as you just saw with that Dash Meredith are in a position to benefit from AI.
Joseph M. Levin: <unk>.
Joseph M. Levin: And that's certainly a factor as we think about new opportunities for IAC I wouldn't.
Joseph M. Levin: Pick a particular sector right now, we're learning and considering and a lot of different areas and we are opportunistic we have historically done well with and like marketplace businesses, we understand those businesses, but I wouldn't put that as a limiter on and the things that we consider.
Joseph M. Levin: Another area that has done very well for us historically is the travel and leisure segment, which we've talked about a bunch of previously and which is sort of done.
Joseph M. Levin: Another area that's done very well for us historically is the travel and leisure segment, which we've talked about a lot previously, and which has sort of outperformed other parts of the consumer wallet, consumer wallet share for a very long time, and we expect to continue benefiting from a lot of the technological trends that you see in the world. So that is an area that has been an area of some focus, but we're looking pretty broadly.
Joseph M. Levin: <unk> outperformed other.
Joseph M. Levin: Parts of the consumer wallet consumer wallet share for a very long time, and we expect to continue benefiting from a lot of the the technology trends that you see in the world.
Joseph M. Levin: So that is an area that has been an area of some focus but we're looking pretty broadly and I think that the the priority for us in terms of M&A is certainly internal opportunities first meaning.
Joseph M. Levin: And I think that the priority for us in terms of M&A is certainly internal opportunities first, meaning more of what we already own, add-ons to those businesses where we can find synergies or have a unique angle on something, and then new M&A. But I do expect that at some point, we will add another leg to the stool, so to speak, on new opportunities, and we're actively looking for those right now.
Joseph M. Levin: Uh huh.
Joseph M. Levin: More of what we already own.
Joseph M. Levin: Add ons to those businesses, where we can find synergies or have a unique angle on something.
Joseph M. Levin: And then new M&A, but I do expect at some point, we will add another leg to the stool so to speak on new opportunities and we're actively looking for those right now.
Speaker Change: Great. Thank you.
Operator: The next question comes from Eric Sheridan with Goldman Sachs. Please go ahead.
Joseph M. Levin: The next question comes from Eric Sheridan with Goldman Sachs. Please go ahead.
Eric Sheridan: Thanks for the question and all the details and also I'll echo welcome back to Jeff and to the new operating role as CEO of Angie. Maybe I'll follow up on Datash Meredith, you know, when you think about coming out of the advertising environment of last year and sort of building some momentum in the advertising environment this year, how should we be thinking about the conversion of revenue into EBITDA and the cadence of that between now and the end of the year measured against the potential volatility up or down on revenue against things that you believe you need to invest in to make sure Datash Meredith, especially on the digital side, is set up for success on the longer term?
Eric Sheridan: Thanks for the question and all the details and also I'll Echo welcome back to Jeff into the new operating role as CEO of Angi.
Eric Sheridan: Maybe I'll follow up on that dish Meredith when you think about coming out of the advertising environment of last year and sort of building some momentum in the advertising environment. This year, how should we be thinking about the conversion of revenue into EBITDA and the cadence of that between now and the end of the year measured against the potential volatility up or down.
Eric Sheridan: On revenue against things that you believe you need to invest in to make sure Todd Meredith, especially on the digital side to set up for success on the longer term. Thanks, so much.
Unknown Executive: Thanks, Eric. So a few things on that front, you know, first, last quarter, just to re-anchor folks, when we provided the full year guidance of 280 to 300 million of adjusted EBITDA for 2024, we said we expected essentially all of the consolidated EBITDA to come from digital. Printy and corporate expense should roughly offset each other this year, with corporate expense pretty consistent in each quarter, around $10 million. As we expected, print started off the year at a low profit level, $2.9 million, due to seasonality and secular revenue declines.
Speaker Change: Thanks, Eric so.
Eric Sheridan: So a few things on that front.
Eric Sheridan: Last quarter, we just to re anchor folks when we provided our full year guidance of $280 to $300 million of adjusted EBITDA for 2024, We said, we expect essentially all of the consolidated EBITDA to come from digital.
Unknown Executive: Print EBITDA and corporate expense should roughly offset each other this year with corporate expense pretty consistent in each quarter around $10 million.
Unknown Executive: As we expected print started off the year at a low profit level $2 $9 million due.
Unknown Executive: Due to seasonality and the secular revenue declines, we expect Q2 print to EBITDA to be 9% to $11 million, and then about $13 million to $15 million a quarter in the third and fourth quarters turning to digital.
Unknown Executive: We expect Q2 print EBITDA to be $9 to $11 million and then about $13 to $15 million a quarter in the third and fourth quarter. Turning to digital, we like seeing the profit scale this past quarter with adjusted EBITDA for digital growing nearly 50% and increasing adjusted EBITDA margin. Looking forward on the revenue side, we continue to feel about 10% plus revenue growth each quarter this year. And again, that's a combination of traffic growth, improved monetization for both advertising and performance marketing, and licensing growth.
Unknown Executive: We like seeing the profit scale this past quarter with adjusted EBITDA for digital growing nearly 50% and increasing adjusted EBITDA margins.
Unknown Executive: Looking forward on the revenue side, we continue to feel good about 10% plus revenue growth each quarter of this year and again thats a combination of traffic growth improve monetization.
Unknown Executive: For both advertising and performance marketing and licensing growth.
Unknown Executive: On the cost side, we're making specific targeted investments in strategic areas. Those are clearly content that we know will perform, decipher, and grow the capabilities of that strategic product and performance marketing. And we talked about our initiative to reposition performance marketing growth for growth, particularly in the context of services. And we think those investments will build on our strengths and position us to grow for years. The impact of those investments will be most felt in Q2.
Unknown Executive: On the cost side, we're making specific targeted investments in strategic areas. Those are clearly content that we know will perform decipher and growing the capabilities of that strategic product and performance marketing and we talked about our initiative to.
Unknown Executive: Reposition performance marketing growth for growth, particularly in the context of services and we think those investments will build on our strengths and position us to grow for years the impact of those investments will be most felt in Q2, we're forecasting incremental.
Unknown Executive: We're forecasting incremental adjusted EBITDA margins of 30% year over year in Q2, and then that'll be followed by 50% plus incremental margins for the third and fourth quarters, as we would expect in the ordinary course. The result is EBITDA growth each quarter and improving margins, and the first half, second half waiting for the year, which is very comparable to the one-third, two-thirds of adjusted EBITDA that we saw last year. (Inaudible) The perfect. Operator, next question.
Unknown Executive: Adjusted EBITDA margins of 30% year over year in Q2, and then that'll be followed by 50% plus incremental margins.
Unknown Executive: For the third and fourth quarter as we would expect in the ordinary course, the result is EBITDA growth each quarter and improving margins.
Unknown Executive: And the first half second half weighting.
Unknown Executive: For the year, which is very comparable to the one thirds two thirds on adjusted EBIT that we saw last year.
Speaker Change: Thanks, operator.
Unknown Executive: Operator next question. The next question comes from Brian Fitzgerald with Wells Fargo. Please go ahead.
Operator: The next question comes from Brian Fitzgerald with Wells Fargo. Please go ahead. Thanks, guys.
Brian Nicholas Fitzgerald: Thanks guys, a couple from us. Maybe more broadly on AI, as we've seen Google scaling up their own search generative experience, are you getting any visibility and changes, if any, in terms of referral traffic to you, either as AI is integrated more deeply into traditional search?
Brian Nicholas Fitzgerald: Thanks, guys a couple from us maybe more broadly on AI as we've seen Google scaling up their own search generative experience.
Brian Nicholas Fitzgerald: Are you getting any visibility and changes if any in terms of referral traffic to you either as AI is integrated more deeply into traditional search.
Joseph M. Levin: I'll take that one. I think it's hard to see specifically. So the short answer is not really, but I'd say long term, Google is taking more of the page and, you know, holding more traffic for themselves. That's basically been a, I don't know, multi-year, if not decade, trend. And so I do expect that to continue. And I think we've done a nice job in navigating that through our history. And, and we actually on the dot dash America side continue to grow inside of Google because we have, you know, I think the best content where we've invested more than others and do a very nice job of addressing users' needs with the content that we've created. And so I think we're in a pretty good position there, but I expect over time that Google will continue to try to keep more for themselves, but we have not seen any direct impact of that yet.
Brian Nicholas Fitzgerald: I'll take that one I think it's hard.
Brian Nicholas Fitzgerald: To see specifically so the short answer is yes.
Joseph M. Levin: Not really but I would say long term Google is taking more of the page.
Joseph M. Levin: <unk>.
Joseph M. Levin: Holding more traffic for themselves that's basically been.
Joseph M. Levin: I don't know multi year, if not a decade trend in.
Joseph M. Levin: So I do expect that to continue I think we've done a nice job in navigating that through.
Joseph M. Levin: Our history and we actually.
Joseph M. Levin: Both management side continued to grow inside of Google because we have I think the best content, where we've invested more than.
Joseph M. Levin: Others in and do a very nice job in.
Joseph M. Levin: Addressing users' needs with the content that we've created.
Joseph M. Levin: And so so I think.
Joseph M. Levin: We're in a pretty good position, there, but I expect over time that.
Joseph M. Levin: That debt, who will continue to try to keep more for themselves, but we have not we have not seen any direct impact of that yet.
Unknown Attendee: Got it, thanks Joey. And then Angie, Jeff, we wanted to ask kind of what ideas or portions of the international playbook you expect to bring to bear on Angie as you take over there.
Speaker Change: Got it thanks, Joey and Andy Jeff We wanted to ask.
Speaker Change: Kind of what ideas or portions of the international Playbook, you expect to bring to bear at Angie as you as you take over there.
Jeffrey W. Kip: So just stepping back, if you just go back a few years. Five years ago, we had a market leadership position in Europe, it was put together through the acquisition of four different companies, four different platforms. But we were losing $10 million; we had four different products, four different business models, and again, four different technologies.
Unknown Attendee: So just stepping back if you just go back a few years.
Jeffrey W. Kip: Five years ago.
Jeffrey W. Kip: We had market leadership position in Europe. It was put together through the acquisition of four different companies for different platforms.
Jeffrey W. Kip: What we are losing $10 million, we had four different products for different business models and again, the port of <unk> technologies.
Jeffrey W. Kip: We went through a process where the first thing we did was pivot our product to really be focused on homeowner choice and pro-online enrollment. I think the second thing we did was restructure, in particular, our performance marketing and our unit economics, both operationally in terms of technology, and we executed there. Thirdly, with a foundation of business, we refactored, rebuilt, and migrated to core technology. Today, we have just finished migrating the fourth business in the UK.
Jeffrey W. Kip: We went through a process where the first thing. We did was we pivoted our product to be really be focused on homeowners choice and pro online enroll I think the second thing. We did was we restructured and particularly our performance marketing on our unit economics, both operationally and in terms of the technology and we executed there.
Jeffrey W. Kip: Thirdly.
Jeffrey W. Kip: The foundation of the business, we re factored rebuilt migrated the core technology.
Jeffrey W. Kip: We've improved each time we've done one of these, and we're on a single platform with a single organization that's much more efficient. And we've been able to really put our focus on the core experience, which is really the offline experience, which is when a homeowner who places a job on the platform hires a skilled pro on the platform and gets the job done well. A year and a half ago, Joey probably took a more difficult hand in the United States in some ways.
Jeffrey W. Kip: Today, we just finished migrating the fourth business in the UK, we've improved each time, we've done one of these and we're on a single platform with a single organization, it's much more efficient and we've been able to really put our focus on the core experience, which is really the offline experience, which is when a homeowner who who places a job on the platform hires of skilled pro.
Jeffrey W. Kip: On the platform and gets the job done well.
Jeffrey W. Kip: Effectively.
Joey: I would say.
Jeffrey W. Kip: A year and a half ago jewelry, probably took a more difficult and actually in the United States in some ways.
Jeffrey W. Kip: There was more empty calorie revenue that was both a low quality experience and low or negative profitability in there, and he's had to pull some of that out. But he and the team have done a big part of this lift for me, so I'm lucky to come in now.
Jeffrey W. Kip: There was more empty calorie revenue that was both low quality experience and low or negative profitability are there.
Jeffrey W. Kip: And he has had to pull some of that out.
Jeffrey W. Kip: But he and the team have done a big part of this lift for me so I'm Lucky to come in now obviously the markets a little different but it's also a lot bigger than the brand and share is stronger here.
Jeffrey W. Kip: Obviously, the market's a little different, but it's also a lot bigger, and the brand and market share are stronger here, so I've got a little more to work with. But in any case, we need to follow the same path Joey and the team have been on. I think basically the key elements, the key ideas, or components of what we did in Europe are in play in the United States in the right way.
Jeffrey W. Kip: So I've got a little more to work with.
Jeffrey W. Kip: But in any case, we need to follow the same path, Joe and the team have been on.
Jeffrey W. Kip: I think basically the key elements the key ideas or components of what we did in Europe are in play in the right way in the United States and.
Jeffrey W. Kip: And I would just add the note, which is, you know, by 2022, we turn the business north on finally growing profit after a few years of flops, finally growing revenue after a few years of flatness. We now have the business at close to 20 percent revenue growth in the first quarter and close to 20 percent EBITDA margins. And God willing, if the creek don't rise, we're going to do the same thing in the United States in good time.
Jeffrey W. Kip: We need to finish the job.
Jeffrey W. Kip: And I would just add to note, which is by 2022, we turned the business nor on finally growing profit. After a few years the swap volume growing revenue after a few years of <unk>.
Jeffrey W. Kip: Flatness, we now have the business.
Jeffrey W. Kip: Close to 20% revenue growth in the first quarter of close to 20% EBITDA margins.
Jeffrey W. Kip: God willing and the Creek don't rise, we're going to do the same thing in the United States in good time.
Unknown Attendee: Great. Thanks, Jeff.
Speaker Change: Great. Thanks, Jeff.
Operator: The next question comes from Dan Kumos with The Benchmark Company. Please go ahead.
Jeffrey W. Kip: The next question comes from Dan <unk> with the Benchmark company. Please go ahead.
Daniel Louis Kurnos: Great, thanks. Close. Welcome back, Jeff. Joey, a little in the weeds for you, maybe, but just on the Decipher benefits around the ALGO from the AI partnership, thoughts on incremental data signals, a shift to incrementally more probabilistic and what that kind of means in terms of driving out performance relative to sort of the publishing peer group with that asset, and then maybe just an update on CARE.
Daniel Louis Kurnos: Great. Thanks, close there welcome back Jeff Joe a little in the weeds for you, maybe but just on the decipher benefits around the algo from the AI partnership.
Daniel Louis Kurnos: On incremental data signals, a shift to incrementally more probabilistic and what that kind of means in terms of driving outperformance relative to sort of the publishing peer group with that asset and then maybe just an update on care would be helpful. Thanks.
Unknown Attendee: Sure. I'm not sure I totally understood the question. But let me try the first question. This is a was your question about deciphering?
Daniel Louis Kurnos: Sure.
Speaker Change: I'm not sure I totally followed the question, but let me try the first question. This is <unk>.
Unknown Attendee: The Cypher Library? I think it would be the Cypher, yeah.
Joey: Question about decipher the site.
Joey: I think it would be decided.
Unknown Attendee: Okay.
Unknown Attendee: So.
Joseph M. Levin: Right now, one of the things that we've done with DotDash Merits with Decipher is we basically mapped intent across a subset of the internet, not just on our properties but on other publishing properties to understand where intent exists and measure that performance relative to what we've seen very closely on our own properties. And I think what the collaboration with OpenAI will enable us to do is scale that to a much bigger portion of the internet, have that mapping, and have those intent signals so that we can use them, bring them back, and sell them to advertisers. Again, very much all with the view of cookie lists, privacy protected, and focusing on the intent of the content, not the individual user or the privacy of the user.
Unknown Attendee: <unk>.
Joey: Right now one of the things that we've done with it that that mirrors with decipher is we basically mapped intent across a subset of the internet not just on our properties but.
Joseph M. Levin: Other publishing properties to understand.
Joseph M. Levin: We're intent exists and measure that performance relative to what we've seen very closely on our own properties.
Joseph M. Levin: And I think what.
Joseph M. Levin: The collaboration with open AI will enable us to do is scale that towards.
Joseph M. Levin: Bigger.
Joseph M. Levin: A portion of the Internet and have that mapping and have those intense signals. So that we can.
Joseph M. Levin: Use them bring them back and sell that to advertisers.
Joseph M. Levin: <unk> very much all with the view of cookie less privacy protected and focusing on the intent of the content.
Joseph M. Levin: Not the not the individual user.
Joseph M. Levin: <unk> of the user and so so we look forward there is.
Joseph M. Levin: And so what we look for there is significantly more scale. So accessing significantly more scale inventory with the same data for intent-based targets. And if we can pull that off, we think that that's potentially a real accelerant to the business. And it is, as we said, it's already working well so far. So we view this as only upside in that area.
Joseph M. Levin: Significantly more scale, so accessing significantly more scale inventory with the same with good data for intent based targeting.
Joseph M. Levin: And if we can pull that up we think that that's potentially a real accelerant to the business and it is.
Joseph M. Levin: You said, it's already working well so far so should we view this as there's only upside in that area.
Unknown Executive: Yeah, just one incremental area that excites us, which OpenAI is able to bring to Decipher that we don't have the scale to do, would be additional media. So beyond just text, image, and video and those things that are part of a user's experience, being able to draw intent-driven linkages and monetize against them and drive performance. And we expect to have a number of those flowers bloom as the two teams work together.
Joseph M. Levin: Incremental area that excites us, which open AI is able to bring to decipher that we don't have the scale to do would be additional media. So beyond just tax image and video in those things that are part of a user's experience being able to draw intent driven linked with.
Unknown Executive: Linkages and monetize against them and drive performance and we expect to have a number of those flowers Bloom is the two teams work together.
Operator: Dan, does that answer your question?
Speaker Change: Dan does that answer your question.
Unknown Attendee: It does, and it's just an update on CARE.
Unknown Executive: It does and then just an update on care.
Joseph M. Levin: Oh, yeah, look, care is very healthy right now from a profit perspective. I think the enterprise business is growing nicely. We're really focused now on driving growth in the consumer part of the business. And we have a number of good projects in the works there, both on just business, optimizing some fundamentals around marketing, but also on the new product side in terms of improving access to instant booking and improving the customer experience with instant booking.
Dan: Oh, yes.
Dan: Care is.
Joseph M. Levin: Very healthy right now from a profit perspective I think the.
Joseph M. Levin: Enterprise business is growing nicely, we're really focused now on driving growth in the consumer part of the business and.
Joseph M. Levin: We have a number of good projects in the works there both.
Joseph M. Levin: Optimizing some fundamentals around marketing.
Joseph M. Levin: But also on the new product side in terms of.
Joseph M. Levin: Improving access to instant booking and improving the customer experience and instant booking and so so we've got.
Joseph M. Levin: And so we've got optimism for where we think care can go from here. And in addition to both consumer and enterprise, there are also the other segments of care, which are right now doing nicely. So senior care and pet care are opportunities for growth from here, and we're starting to see some green shoots in those businesses too.
Joseph M. Levin: Optimism for where we think here can go from here.
Joseph M. Levin: And in addition to both consumer and enterprise. There's also the other segments of care, which.
Joseph M. Levin: Our right now doing nicely, so senior care and pet care, we think our opportunities for growth from here and we're starting to see some some green shoots in those businesses.
Unknown Executive: Yeah, I think, you know, we've seen on the consumer side, we've seen a slowdown for a while. We needed, we know, we said in prior quarters, we knew, we needed to improve our marketing and improve our product. Under new management, we feel like we have the roadmap there and have a new chief technology officer, chief product officer, and chief marketing officer. There's some macro, we never want to blame macro, but there's definitely some macro on childcare versus daycare going on right now.
Joseph M. Levin: Yes.
Joseph M. Levin: I think we.
Joseph M. Levin: We've seen on the consumer side, we've seen a slow down for a while we needed. We know we've had in prior quarters, we know we needed to improve our marketing and improve our product.
Unknown Executive: Under New management, we feel like we have the roadmap there and have.
Unknown Executive: New Chief Technology offers officer, Chief product Officer, Chief Marketing Officer.
Unknown Executive: Theres, some macro where we never want to blame macro, but there's definitely some macro on childcare versus daycare going on right now.
Unknown Executive: Some.
Unknown Executive: Childcare down little babysitting.
Unknown Executive: Take care and senior care and pet care, where we're growing up but we'll lap that and it's really specific to us on the blocking and tackling on marketing and product and we.
Unknown Executive: And some, you know, childcare down, a little babysitting, daycare up, and senior care and pet care where we were growing up. But we'll laugh about that, and it's really specific to us on the blocking and tackling on marketing and product, and we feel very good about the opportunity.
Unknown Executive: We feel very good about the opportunity.
Speaker Change: Super helpful guys. Thank you.
Operator: The next question comes from Brent Thill with Jeffries. Please go ahead.
Unknown Executive: The next question comes from Brent Thill with Jefferies. Please go ahead.
Brent John Thill: Good morning, Joey. In the past, you've talked about the M&A environment being somewhat irrational and full of multiples. I'm curious if you could just update us kind of on what you're seeing now. If some of these expectations come back to earth, are you still seeing a similar environment?
Brent John Thill: Hi, good morning, Joey in the past you've talked about the M&A environment being somewhat irrational in multiples I am curious if you could just update us kind of what youre seeing now.
Brent John Thill: Some of these expectations come back to Earth or are you still seeing the similar environment.
Joseph M. Levin: I, Brent, think there are opportunities now. I think there are, we've gone through periods where, you know, things are priced for perfection and, and things are insane from our perspective, or we've gone through periods where everything's priced for failure. And there are big opportunities from our perspective; that was probably the era where we bought into MGM. But right now, I think that it's a balance. I think there are areas that are probably overheated, like AI. All of these AI companies are not going to be multi-billion dollar companies; some will, but certainly not, not all of them.
Joey: Hi, Brian I think there is opportunities now I think there is we've gone through periods where.
Joseph M. Levin: Things are everything is priced to perfection and things are in <unk> from our perspective, where we've gone through periods, where everything is priced for failure and there is big opportunities from our perspective that was probably the era, where we brought into MTM.
Joseph M. Levin: But right now I think that it's a balance I think there are areas that are probably overheated like AI. All of these AI companies are not going to be a multibillion dollar company and some well, but certainly not.
Joseph M. Levin: And, and, and there are plenty of areas of rational opportunity. And, and that's where we're focused. So I'd say it feels, you know, pretty balanced in the middle right now. You could say that's maybe a harder time to deploy capital, because it's not obvious that you should be in or out. But we think we think we'll find some opportunities.
Joseph M. Levin: Not all of them.
Joseph M. Levin: And there are there are plenty of areas of.
Joseph M. Levin: Rational opportunity and that's where that's where we're focused so I'd say it feels.
Joseph M. Levin: Pretty balanced in the middle right now you could say, that's maybe a harder time to deploy capital because it's not obvious that you should be in or out but.
Joseph M. Levin: We think we think we will find some opportunities here.
Unknown Attendee: Okay, great. And just a quick follow up on the merging business. Anything else to call out that you're really energized by in terms of what you're seeing in the momentum and the other parts of the portfolio?
Speaker Change: Okay, Great and then just a quick follow up on the emerging business anything else to call out that you are you are really energized by in terms of what youre seeing in the momentum in the the other parts of the portfolio.
Joseph M. Levin: The one I'd highlight in that we talked about care already, which is, I think, a category leader and a great business with Solid Fundamentals. The other one in there, actually, I'll talk about two.
Unknown Attendee: The one.
Unknown Attendee: A highlight and we talked about here already.
Unknown Attendee: I think a category leader and a great business with solid fundamentals.
Joseph M. Levin: One is Vivian, which is a very good product for the market that it's in, which is matching healthcare professionals, primarily travel nurses, which is where it started and has the greatest share, but matching healthcare professionals with employment. I think that's a category that, in the long term, has really nothing but tailwinds, given a supply and demand imbalance of nurses, but also for healthcare professionals generally. And Vivian has done a very nice job of matching that with very healthy revenue growth and not really consuming much capital at this point. AI tools to enhance the chat experience between the healthcare professional and the employer.
Joseph M. Levin: The other one in there.
Joseph M. Levin: Ill talk about two one is vivien, which as.
Joseph M. Levin: Very good product for the market that it's in which is matching our health care professional primarily travel nurses, which is where it started and has the greatest share, but matching healthcare professionals with employment at the category that long term has.
Joseph M. Levin: Really nothing but tailwind.
Joseph M. Levin: Given a supply demand imbalance of nurses, but health care professionals generally and Vivian has done a very nice job in matching that with very healthy revenue growth and not really consuming less capital at this point.
Joseph M. Levin: And Vivien is also done by the way a very nice job in deploying.
Joseph M. Levin: AI tools to get the enhanced.
Joseph M. Levin: The chat experience between the.
Joseph M. Levin: Health care professional and the employer.
Joseph M. Levin: We're seeing some fun things on engagement there. And then the other one, which is IAC, but as media things do, they make a lot more noise than the size of their business. Great real leadership with incredible experience at Daily Beast now with Ben Sherwood and Joanna Coles. They're making real changes at the business. They're bringing a ton of energy to the business, and, you know, who knows where they will go with that. But I'd say that there's an exciting reboot happening there, and we'll be interested to see how that turns out.
Joseph M. Levin: We're seeing some fun things on an engagement there.
Joseph M. Levin: And then the other one which is.
Joseph M. Levin: Very very small for IC, but as media things do they make a lot more noise than the size of their business. We've got great real leadership with incredible experience at daily Beast, now with Ben Sherwood enjoying a cold.
Joseph M. Levin: We're making real changes at the business are bringing a ton of energy to the business and.
Joseph M. Levin: Who knows where they where they go with that but I'd say that there is exciting.
Joseph M. Levin: Exciting reboot happening there and.
Joseph M. Levin: We will be interested to see how that turns out.
Operator: Thank you, Brent. Operator, one last question.
Joseph M. Levin: Okay.
Speaker Change: Thank you Brent operator, one last question.
Thomas Steven Champion: The last question comes from Tom Champion with Piper Sandler. Please go ahead.
Joseph M. Levin: The last question comes from Tom Champion with Piper Sandler. Please go ahead.
Thomas Steven Champion: Hi, good morning. Maybe just two quick ones on DDM, maybe for Chris. Just looking at core sessions growth of 8%, you know, certainly solid and consistent with the fourth quarter, but there was an extra day in the quarter, all else, fairly easy comp year over year. Just curious if there was any one-timer or headwind or anything else that we should think about that in the context of a trend that was previously. Improving sequentially. And then just any comments on the Amazon partnership; I would love to hear about that. Thank you.
Thomas Steven Champion: Hi, good morning.
Thomas Steven Champion: Maybe just two quick ones on <unk>.
Chris: Maybe for Chris.
Thomas Steven Champion: Just looking at core sessions growth.
Thomas Steven Champion: Of 8%.
Thomas Steven Champion: Certainly solid and consistent with the fourth quarter, but.
Thomas Steven Champion: There was an extra day in the quarter.
Thomas Steven Champion: All else fairly easy comp year over year, just curious if there was.
Thomas Steven Champion: Any any one timer or headwind or anything else that we should think about that in the context of a trend that was previously.
Thomas Steven Champion: Improving sequentially.
Thomas Steven Champion: And then just any comment on the Amazon partnership would love to hear about that thank you.
Unknown Executive: Yeah, definitely, Tom. Thanks for the question. We actually did want to talk about core session trends. So the decline from 10% core growth in Q4 of last year to 8% growth this quarter is entirely driven by declines in traffic to our properties coming from Facebook. This has been a significant trend across the publisher ecosystem since the middle of last year. It's hit the whole industry hard. Thankfully, for us, it's a small part of our growth, which is why we can keep growing.
Chris: Yes definitely Tom Thanks for the question, we actually did want to talk about core sessions trends.
Unknown Executive: So the decline from 10% core growth in Q4 of last year to 8% growth. This quarter is entirely driven by declines in traffic to our properties coming from Facebook. This has been a significant trend across the publisher <unk>.
Unknown Executive: <unk> systems since middle of last year, it hit the whole industry hard thankfully for us. It's a small part of our growth which is why we can we can keep growing.
Unknown Executive: But they really ramped it up again from what we can see mid-quarter. For the first quarter, our Facebook traffic was down 50% year over year in the first quarter as they aggressively kept seeking more audience on their own platform. Again, Thankfully, Facebook only represents about 4% of our traffic today, down from 7% a year ago. So we feel that this quarter, it will continue to attrit, and we feel great about how everything else is growing and the ability to keep growing sessions. We also note we're seeing excellent growth at Apple News, which does not show up in our sessions numbers because that consumption happens on their platform. Instead, it shows up in our licensing line.
Unknown Executive: But they really ramped it up again from what we can see mid quarter.
Unknown Executive: For the first quarter, our Facebook traffic was down 50% year over year.
Unknown Executive: In the first quarter as they aggressively to keep to seek more audience on their own platform.
Unknown Executive: And thankfully Facebook.
Unknown Executive: Facebook only represents about 4% of our traffic today.
Unknown Executive: Down from 7% a year ago. So.
Unknown Executive: We felt that this quarter it will continue to attract and we feel great about how everything else is growing and the ability to keep growing sessions. We'd also note.
Unknown Executive: We're seeing excellent growth at Apple news, which does not show up in our sessions numbers because that consumption happens on their platform instead it shows up in our in our licensing line.
Unknown Executive: So it's a bit of movement from one platform, not exactly, but we've got declines in one platform that are pretty small at this point, and then growth in another where we see a lot of opportunity. I'd say in some, we feel great about session growth across the portfolio. And also, when you talk about comps, we're optimistic for our entertainment properties as we move further into the year, given we'll be lapping the strike
Unknown Executive: So it's a bit of.
Unknown Executive: Movement.
Unknown Executive: <unk>.
Unknown Executive: One not exactly but we've got declines and one platform that's pretty small at this point and then growth in another where we see a lot of opportunity.
Unknown Executive: In sum, we feel great about session growth across the portfolio and also when you talk about comps we are optimistic for our entertainment properties as we move further into the year, given we will be lapping the strikes.
Joseph M. Levin: I just want to add one thing on that, which is whether 8% versus 10% or one more day in the quarter or whatever, 8% growth in core sessions is excellent. You know, we're primarily US businesses; generally, the internet is not growing right now in terms of users. And so what you're seeing happen is the folks who have invested in content, and we've invested an enormous amount in content and will continue to invest an enormous amount in content, are being rewarded with an increasing share of audience, and we feel very good about that. And, and, you know, again, whether it's eight or 10, or whatever, growing in that environment and growing healthily in that environment is a real testament to winning products.
Speaker Change: I just want to add one thing on that which is whether 8% versus 10% or one more day in the quarter whatever 8% growth in core assertion is excellent.
Joseph M. Levin: We're primarily a U S business is generally the internet is not growing right now in terms of users and so what you're seeing happen is the folks who have invested in content and we've invested an enormous amount in content and continued to invest an enormous amount of content.
Joseph M. Levin: Are being rewarded with increasing share of audience and we feel very good about that and and.
Joseph M. Levin: Again, whether it's eight or 10 or whatever.
Joseph M. Levin: Growing in that environment and growing healthily in the environment as it is.
Joseph M. Levin: <unk> is a real testament to winning product.
Unknown Executive: And then, and then Tom, you know, question on Amazon and the demand side integrations for Decipher. Look, I think, I think it's credit to Neil and his team that they positioned us to be in the spot we are with Decipher given the industry trends. The data science there, the technology that underlies it, is very strong. And we know, whether it's Amazon as a brand or the brands that it represents through its retail media network, or when you look across the whole brand ecosystem.
Joseph M. Levin: And then and then Tom's question on on Amazons, and the demand side integrations for decipher.
Unknown Executive: Look I think I think it's a credit to neon team that they've positioned us to.
Unknown Executive: To be in the spot we are with decipher given the industry trends.
Unknown Executive: The data science, there the technology that underlies it are very strong and we know why.
Unknown Executive: Amazon is a brand or the.
Unknown Executive: The brands that it represents through its retail media network or when you look across the whole brand ecosystem company.
Unknown Executive: Companies are focused on privacy-friendly solutions and getting to cookie-less platforms whenever that rolls out. We continue to have productive conversations with other large demand-side platforms and are creating the capabilities in their infrastructure to utilize Decipher and offer cookie-less based targeting. We also think the integration of generative AI will be positive in the perception of investors, and it's just head down, blocking and tackling, executing the integrations, and explaining the story, but we are very bullish on the dynamic.
Unknown Executive: Companies are focused on privacy friendly.
Unknown Executive: Solutions and getting too.
Unknown Executive: <unk>.
Unknown Executive: Away from getting too cookie lists platforms whenever that rolls out.
Unknown Executive: We continue to have productive conversations with with other large demand side platforms and creating the capabilities in their infrastructure.
Unknown Executive: Infrastructure to utilize decipher.
Unknown Executive: Offer cookie based targeting.
Unknown Executive: We also think the integration of generative AI will be a positive in the perception of investors and its just head down blocking and tackling executing the integrations.
Unknown Executive: And explaining the story, but we are very bullish on the dynamics.
Unknown Executive: Yeah, integration of generative AI. This meant advertisers, not investors, although perhaps both. Oh, yeah.
Unknown Executive: Integration of generative AIG chrisman advertisers not investors, although perhaps though.
Unknown Executive: Sorry, investors. I have investors on my mind, but I meant advertisers. Advertisers.
Unknown Executive: But I have investors on my mind, but I think advertisers advertising.
Operator: Thank you all very much for joining us. I know it was a busy morning, and I appreciate the questions and support. We'll talk to you next quarter.
Speaker Change: Thank you all very much for joining us I know, it's a busy morning, and appreciate the questions and support and we'll talk to you next quarter. Thanks all.
Operator: Okay.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.