Q1 2025 IAC Inc Earnings Call
[music]
Welcome to the IAC First Quarter 2025 earnings conference call.
Christopher: Now I'd like to turn the conference over to Christopher helping C O O and CFO. Please go ahead.
Speaker Change: Thank you.
Speaker Change: Good morning, everyone, Christopher helping here and welcome to the IAC first quarter earnings call. Joining me today is Neil Vogel CEO of Dot dash Meredith or as we refer to it today on the call D D M.
Speaker Change: I see as published two presentations on the Investor Relations section of our website today, a new investor presentation, and our Q1 earnings call presentation.
Speaker Change: On this call we will be reviewing the ladder, which comprises of few key slides from the longer investor presentation.
Speaker Change: I'll begin with some introductory remarks that'll referenced that earnings call presentation, and then open it up to Q&A before we get to that I'd like to remind you that during this presentation. We may make certain statements that are considered forward looking under the federal Securities Law. These federal these forward looking statements may include statements related to our outlook strategy and future for.
Speaker Change: <unk> and are based on our current expectations and on information currently available to us actual outcomes and results may differ materially from the future results expressed or implied in these statements due to a number of risks and uncertainties, including those contained in our most recent annual report on Form 10-K.
Speaker Change: And then the subsequent reports that we file with the SEC and.
Speaker Change: The information provided on this conference call should be considered in light of such risks will also discuss certain non-GAAP measures, which as a reminder include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during the call.
Speaker Change: I'll also refer you to our earnings release Investor presentations, our public filings with the SEC and again to the Investor Relations section of our website for all comparable GAAP measures and full reconciliations for all material non-GAAP measures.
Speaker Change: Now that we've covered that I want to say thank you for joining us on this call as we commenced this next chapter in <unk> history.
Speaker Change: As an overarching comment I want to say Q1 was a solid start to the year.
Speaker Change: To Echo our chairman Barry Diller's published comments IAC is back to doing what we do best.
Speaker Change: Angie is officially on its own our businesses are executing with focus and effort and we are deploying capital including into the company. We know best ourselves through the repurchase of four 5 million shares. We've also increased our share repurchase authorization by 10 million shares.
Speaker Change: The macroeconomic outlook is uncertain, but we are reaffirming full year 2025, adjusted EBITDA guidance across all of our D C.
Speaker Change: Turning to the Q1 earnings call presentation, you'll see on page three of the businesses and assets that comprise IAC. Today. These include four leaders in large and growing categories and in Q1, we had a truly productive quarter executing on a number of fronts on March 31st we completed the full span of.
Speaker Change: Angie to shareholders, representing the 10th Independent company Iac's created with the spin Joey Levin transitioned from IAC CEO to Angi executive Chairman.
Speaker Change: Where he's working with CEO, Jeff kept to drive Angie to be the industry leader in home services are companies executed strongly D. D. M grew digital revenues, 7% in the quarter and increased EBITDA of 46%, that's excluding a onetime lease gain that lease gain however represents a different type of win as we were able to.
Speaker Change: Terminate a long term lease for two floors at <unk>, New York headquarters for $43 million in cash payments, representing about three times save cash flow and generating a $36 million book gain.
Speaker Change: Kerr keeps making progress through a single minded focus on improving its product to drive better customer experience conversion and retention.
Speaker Change: MGM reported solid earnings last week and in the words of CEO Bill Hornbuckle his quote well prepared for the rest of 2025.
Speaker Change: Taro, the leading car sharing service has withdrawn its plans for an IPO and is fully focused on driving growth and seizing on the opportunities in front of us.
Speaker Change: Vivien is implementing AI into its products and processes and truly innovative ways, which combined with the $2 million clinicians on its platform as the opportunity to potentially fundamentally change health care staffing.
Speaker Change: At search we renewed our contract with Google and the business is showing signs of stability. After a challenging couple of years and the daily Beast grew revenue, 72%, while achieving profitability.
Speaker Change: At corporate we've taken steps to rationalize our cost structure. Additionally, during the quarter. We also reached agreement in principle to settle the match separation litigation with IAC only needing to contribute $200000 beyond our insurance coverage.
Speaker Change: But despite all this progress turning to page four our shares are still trading for less than the value of our 23% stake in MGM and the $900 million of cash at IAC Port apparent importantly, and as a reminder, we have 800 million of Nols that essentially would offset the taxable gain presently on our MGM stay.
Speaker Change: Okay.
Speaker Change: So as you can see on the right our collection of wholly owned businesses as well as our 32% preferred equity stake in turo and our unencumbered headquarters building are trading at an implied value of negative $100 million.
Speaker Change: We obviously think this represents a massive value disconnect and.
Speaker Change: Turning to the next page, we're working every day on our strategy to create equity value and shrink that discount.
Speaker Change: The first piece of the strategy is obvious continue to execute and drive growth across the businesses. Neil will talk today about everything he and his team are doing to seize on dms opportunities as the largest digital publisher care Vivien search in the daily Beast management are similarly, improving their product content and technology to accelerate their <unk>.
Speaker Change: Canoe and profitability and in the case of care and the Beast, we brought in new leaders who've Reenergize those companies.
Speaker Change: And then we're also the largest shareholder with active board members at MGM Antero, helping those industry leaders sees on their market opportunities. The second prong is capital allocation, our chairman Barry Diller said last quarter that after working through the challenges of the past few years capital allocation is front of mind.
Speaker Change: As an initial step we completed the buyback of $4 5 million shares of IAC and refresh our authorization as mentioned earlier.
Speaker Change: We've demonstrated our conviction in our own stock underscoring the deep value, we see in our businesses and we will continue to actively evaluate share buybacks going forward.
Speaker Change: To the right M&A is a key element of Iac's DNA and success in Russia, <unk>, our head of M&A and strategy <unk> is driving an active effort to find investment opportunities both through our existing companies and new platforms more on that in a second.
Speaker Change: And then finally as we said two quarters ago, we will continue to pursue strategic divestitures of our smaller holdings should they arise freeing up capital and simplifying IAC where attractive.
Speaker Change: The final area is major catalysts significant events to crystallize value have always been part of the IAC playbook spinning Angie was a key step in our strategy last quarter looking forward, we can't say, what such catalyst may be but we will be fearless and pursuing them. If we believe they will benefit our shareholders.
Speaker Change: Regarding M&A. We included the next slide to present, an overview of how we are approaching capital deployment, our foundation, our interest and our advantages a number of us have been active in capital investments throughout our careers and fundamentally believe we have real advantages through our permanent forever capital capital and ability to invest at any stage of our company.
Speaker Change: We've always been unique in the marketplace for capital given our structure deep industry experience flexibility and operational Knowhow and these strengths continue to serve US well, we're actor actively pursuing acquisitions and investments small and large and hope to be discussing new additions to IAC.
Speaker Change: The final slide summarizes our guidance, bringing us back to a discussion of the macro environment. We've been following trends actively across EDM and care as well as garnering insights from our other companies in holdings.
Speaker Change: Consumer spending through <unk> performance marketing has been solid clearly bucking the weak consumer confidence numbers, we've all seen.
Speaker Change: That may represent consumers pulling forward spend ahead of tariff impacts or it may represent real solidity, it's too early to tell.
Speaker Change: At care, we've seen early signs of consumer pressure around the edges through ebbing conversion, but not yet any material moves on.
Speaker Change: On the DBM advertising front, we've been closely watching the trends given the news flow, but premium demand has remained generally stable strength in pharma tact and beauty has helped to offset weakness in areas like food and beverage.
Speaker Change: One element we are thankful for in our advertising base is that team who sheehan are the de minimus exemption players have never been direct advertisers on our platforms.
Speaker Change: Programmatic pricing Conversely has definitely softened essentially running flat year over year after being up for much of the year.
Speaker Change: We're analyzing the disconnect between direct revenues on one hand and programmatic on the other to see which provides better insights on the forward trends and advertiser demand, but right now it's too early to say and some we'd say we are carefully monitoring the macroeconomic gnomic environment for signs of either stability or weakness among.
Speaker Change: <unk> in brands and we're thinking carefully about discretionary spend in that context.
Speaker Change: <unk> that backdrop, we're reaffirming our adjusted EBITDA guidance for the year for each of our companies with the core assumption of no significant recession recession that assumption derives from what we're seeing in our businesses, but we know we are living in unpredictable times. All we can control is our focus and execution with that let's go to Q&A.
Speaker Change: Operator can we please have the first question.
Speaker Change: Yes.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
Speaker Change: And your speakerphone, please pick up your handset.
Speaker Change: The keys to withdraw your question. Please press Star and then two.
Speaker Change: Our first question comes from Jason <unk> from Oppenheimer. Please go ahead.
Jason: Thanks for taking the question.
Jason Oppenheimer: Can you talk about the key priorities and I guess it would be probably the key product priorities that could drive 2000, and 2006 Tdm revenue growth and then secondly, how should we think about capital allocation going forward obviously.
Jason Oppenheimer: A lot of stock repurchases in the quarter first time in a while but going forward how should we think about allocation between purchases and M&A is there a minimum gross cash level that you think about thank you.
Neal: Hey, Jason it's Neal.
Neal: First for those of you in New York Allergies, or just destroying me I'm sorry, it sounds so awful.
Speaker Change: But yes to answer your question.
Neal: Chris can take the second one I'll take the first one.
Neal: 2026, something Russia pretty excited about I think one thing we were talking about before this call as we came into this year.
Neal: We are executing at an exceptionally high level and a big part of that is.
Neal: As.
Neal: Looking down the field and figure out what we need to do for the future and we've got a number of really big projects I'm sure you've seen the people App, we launched which we're very excited about we're going to meet audiences, where they are younger audiences.
Neal: Haven't yet downloaded and use it we're really proud of it it's one of the best things that were built.
Neal: We have a very big project around recipes called my recipes.
Neal: I believe comscore.
Neal: Probably at least 40% of the traffic on the open web.
Neal: To recipes and food content. So it's a really modern take on the recipe locker, which of your chef your home Cook you find very very valuable we're excited about that.
Neal: But probably the thing we're most excited about is decipher plus which allows us to take decipher, which we've talked about which is <unk>.
Neal: Using our intent driven contextual data that produces AD targeting that beats cookies and pretty much anything else on space and extending it across the open web so.
Neal: You cannot only use deciphered target exceptionally our own.
Neal: Inventory about target the whole web it between those three things, we're really excited about where it can go we're also.
Neal: Not new but we're really investing and our event businesses and this is not some new strategy. It's just the continued growth of things like the food and wine classic <unk>.
Neal: Had really good strength in off platform audiences across social.
Neal: We've got a couple of more.
Neal: You've probably seen my reality show turn on the Instyle showed the interim but where we're building really fun audiences in different places that advertisers really really value and we're just excited we're long term very excited about this business great brands, great audiences real emotional connection to our.
Neal: So people use our products and we feel pretty good.
Speaker Change: Thanks, and then Jason on capital allocation.
Speaker Change: We bought back four five goal is by $200 million of our shares.
Speaker Change: We have our remaining $900 million of corporate cash were also generating cash down at DBM.
Speaker Change: Our goal now is to look at M&A opportunities as we talked about nothing forecloses additional share purchases, but we.
Speaker Change: We're interested in M&A, our chairman Barry Diller is.
Speaker Change: We're looking at things large and small.
We think the the volatility of the current period can lead to new opportunities. There one of the things Russ and number of us have talked about a lot is.
Speaker Change: These private equity and VC backed companies have kind of hung on for a long time waiting for the market to return to exceptional levels.
Speaker Change: That really hasnt happened in that world and also.
Speaker Change: Their investors their limited partners are.
Speaker Change: Are in greater need of liquidity. So we're cautiously optimistic we'll see more opportunities shake out of the private market. We're also looking at earlier stage opportunities, but again.
Speaker Change: People have challenged us that you can walk and chew gum when it comes to capital allocation for a while you can buy your own stock and do M&A and we believe that.
Speaker Change: But we definitely see value embedded in our share price.
Speaker Change: And we will continue to calibrate as we go.
Speaker Change: Thanks, Jason Operator next question.
Speaker Change: Question comes from Jason Excuse me, John Blackledge from TD Cowen. Please go ahead.
Speaker Change: Great. Thanks, two questions.
Speaker Change: Sticking with Tdm digital can you talk about the <unk> trends revenue trends at DBM digital look like advertising was a bit lighter than expected offset by higher performance and licensing revenue any further color there would be great and then on the <unk> <unk> digital revenue guide of 79% can you talk about the puts.
Speaker Change: And takes for the Rev Guide across the three segments.
Speaker Change: Is the current macro with tariffs impacting.
Speaker Change: Advertiser brand spend and then second question on the <unk> cash flow to IAC could you just talk about the dynamic.
Speaker Change: <unk> hits, a certain leverage ratio and the cash is accessible to IAC like how does that benefit IAC and its shareholders. Thank you.
Speaker Change: Yes, sure John I'll start and then and then Neil will will definitely.
Speaker Change: <unk>.
Speaker Change: Q1.
Speaker Change: We guided last quarter that there were a few elements that would lead to slower growth in traffic and revenue in Q1, specifically, we had tough comps in January and February.
Speaker Change: In 24 that were running over there was one less day in the quarter, which is about a 1% decline and then Easter which is an important quarter for us sorry important holiday.
Speaker Change: <unk> fell into the second quarter of this year as it played out the new cycle wasn't our friend between the fires in La and then political news seemingly crowding out most other information and peoples attention.
Speaker Change: These factors combined.
Speaker Change: Core traffic declining 3% in the quarter and digital advertising only being up 1% and that 1% premium was actually pretty solid we just with fewer impressions, we had less programmatic to sell which was a headwind.
Speaker Change: But things within just traffic and advertising improved across the quarter.
Speaker Change: March was solid at 8% digital advertising growth for example, and April Similarly was.
Speaker Change: Was in that in that vein.
Speaker Change: For the first quarter licensing led the way with 30% growth.
Speaker Change: Thanks in part to the open AI license, but also due to real strength that Apple News performance marketing was also excellent at 11% growth and we continue to see solid consumer spending.
Speaker Change: On commerce.
Speaker Change: And that really got us to the to the 7% for the quarter. So we were not really surprised by that number for the second quarter, we've guided to 7% to 9% digital revenue growth.
Speaker Change: That will come from a combination of stable traffic, we've already seen that easier comps definitely so far we've seen stability in premium demand with some particularly strong categories offsetting those were tariff uncertainty is more pronounced.
Speaker Change: And continued solid performance marketing offset again by by soft programmatic licensing will have a tougher comp as we lap the opening of ideal but will still grow and then we spent a lot of time analyzing the advertiser demand and the impact of tariff uncertainty we do constantly.
Speaker Change: At 7% to 9% digital for Q2 is our best view of where we are right now and the trends New Orleans.
Speaker Change: To the to the.
Speaker Change: Yeah.
Speaker Change: The market perspective on this I think there is.
Speaker Change: Before we came into this.
Speaker Change: Really strong and executing really well.
Speaker Change: I think we have seen our premium revenue hold together really like really really well so far.
Speaker Change: I think anyone who doesn't think the mood of the buyers is changing is not paying attention, but we haven't seen any significant huge cracks in that yet I guess it all remains to be seen we are very focused on control. What we can control I think we're really well positioned because of our scale and because of our focus on performance.
Speaker Change: And again it goes out of things like the <unk> and it really intent driven traffic you got a much better chance to hang in there when youre really perform so well see but.
Speaker Change: Again its control what you can control and we'll see I think Chris touched on this a little bit.
Speaker Change: I think there is a little bit of a disconnect between what is essentially advertising spot market, which is the real time.
Speaker Change: Programmatic markets, which are probably were running for a long time for us we're particularly good at it up 20 ish percent, we're back down to sort of flattish year over year, and that's not really moving.
Speaker Change: I think that is definitely a little bit of uncertainty.
Speaker Change: And the buyer is a little slower to pull the trigger.
Speaker Change: What I would also say about the future as well.
Speaker Change: <unk>.
Speaker Change: We're not seeing much more than you guys are seeing right, there's new things coming out every day and we're reacting in reading and reacting every day, what I would say in the long term.
Speaker Change: Great brands, great audiences, great execution will be fine, we've got to get through whatever short term lumpiness hits and if it applies to us is going to play to lots of other people as well.
Speaker Change: And then on the cash flow question. So.
Speaker Change: So everyone understands.
Speaker Change: We have entity level depth at Dash Meredith.
Speaker Change: Institutional term loan in two tranches as well as our unfunded revolver under the credit agreement.
Speaker Change: That debt IAC can dividend cash up to itself the parent from DBM.
Speaker Change: If total lever if the total leverage ratio is.
Speaker Change: Below four times total debt to EBITDA.
Speaker Change: And Thats on a credit agreement definition of adjusted EBITDA, which is I guess more favorable and slightly different than what we report publicly in any case through debt Paydown and increased EBITDA Neil and team.
Speaker Change: We have steadily reduced leverage at DBM and we went below that four times test ratio as of 12 31, 24 that means IAC has access to <unk> cash for any IC corporate purposes should we so desire it's.
Speaker Change: The increase to our financial flexibility and it was a real objective of ours essentially since the acquisition close to get to get below both from a.
Speaker Change: Just from a total leverage perspective, but also for access to that cash. We'd also highlight that on a go forward basis <unk> leverage ratio should only improve through the combination of improving EBITDA, but also it's a great cash flow producer and end in that free cash flow generation.
Speaker Change: Thank you John Operator next question.
Next question comes from James <unk> from Jefferies. Please go ahead.
Speaker Change: Alright, great. Thank you guys could you just talk about the appointment of Jim walk in as the President of decipher just be interested to hear about his strategic objectives for that particular product. Thank you.
Speaker Change: Sure.
Speaker Change: Jim for Us.
Speaker Change: <unk> was a true of a higher I've known Jim personally for a while.
Speaker Change: Team has owned for a while if you are in the.
Speaker Change: The AD Tech space, Jim Jim had been the CEO of a public company called adherent, which had.
Speaker Change: <unk> recently been acquired adherent is particularly appealing to us as a partner of ours now and B. They do a lot of the same things to allow advertisers to reach consumers that we're doing with the <unk>.
Speaker Change: Jim Just star you had lots of opportunities I think we convinced that's adobe CEO of other things.
Speaker Change: We did a good job of convincing them, how big and exciting decipher could be.
Speaker Change: And he is coming to hit the ground running and building a team.
Speaker Change: Commercial.
Speaker Change: Do we have a great business.
Speaker Change: People at our place Lindsey Van Kirk John Roberts, who has done an incredible job building. This we needed to bring a real commercial CEO into this and it shows our focus on the business.
Speaker Change: So the market and B.
Speaker Change: It's just the nuts and bolts skills that we need to build a team that can fully sell and execute on the potential of using our data, which we have more first party data than any other publisher to target. The open web and we know that our data and architectural targeting beats cookie at other targeting and Jim believes that.
Speaker Change: Two and we're off to the races again, I think we've talked a lot about I think youre going to see minimal contribution this year, but we're really looking towards 2006 as this is a big part of our future.
Speaker Change: Plus I'm sorry, if it does have a plus.
It's interesting the last thing I'll say about <unk> of our Tulsa, what we're talking about it.
Speaker Change: The actual core decipher business that was in more than half of our premium deals. It's doing really well those deals are 60, plus ish percent bigger than deals that don't have the cipher and those clients are growing faster than clients that don't use the cipher. It is also our ticket in the door. It's one of the few really new innovative things.
Speaker Change: AD targeting.
Speaker Change: Jim one of the great skills. He has as a communicator and he can communicate what we're doing into this AD Tech universe. It isn't our native language.
Speaker Change: We are a publisher at our core we make amazing content and build amazing things he really understands our data product that we've built and.
Speaker Change: Really looking to leverage.
Speaker Change: As you can tell from my tone, we're very excited about this.
Great. Thank you Neil.
Neil Vogel: Thanks, Josh.
Speaker Change: Operator next question next question comes from Cory Carpenter from Jpmorgan. Please go ahead.
Cory Carpenter: Hey, good morning, Thanks for the questions, maybe sticking with insight for Neil could you just talk about the impact or lack of impact can Google no longer chasing that competes we today announced a few weeks ago.
Speaker Change: And maybe.
Speaker Change: Could you talk about the announcement you made a few weeks ago with our house.
Cory Carpenter: Thank you.
Chris: Sure I'll do the cookies part first and then Chris can go.
Speaker Change: To give you a little bit more there is a little more in my opinion I'm sure you're going to get different takes on this I don't think it's that big of a deal at all.
Speaker Change: Don't think anybody really saw cookies are going away for the last 12 months.
Speaker Change: You guys like to say, it's baked in there was baked in already.
Speaker Change: For us we.
Speaker Change: We're neutral on this I think if anything it might help us it really helps US lineup, what we can do with contextual targeting versus cookies, and how much more performance or decipher and decipher plus driven offerings are so it's pretty good. We also look we have a lot of clients that want to buy.
Speaker Change: Parts of their programs, even all of their programs based on cookies for whatever reason and we can execute those also.
Speaker Change: One thing it will do that as positive as it will probably eliminate would've been.
Speaker Change: Thrash it in the market to get from a to a true post cookie world, but I don't think in the long term it makes any difference for us.
Speaker Change: Yes.
Speaker Change: Hi.
Speaker Change: And just to align that to some of the prior conversations we've had on this topic.
Speaker Change: If there was going to be a hard cut.
Speaker Change: Say, if it's going to disrupt everyone, but this April would be a winner kneeland.
Speaker Change: Neil and team have highlighted the fear of a hard cut helped highlight decipher to a number of brands and agencies, which was great for them.
Speaker Change: Getting them to trial and then see the experience where we are now.
Speaker Change: Stability in the market, where we can just outcompete other offerings is ideal.
Speaker Change: Well I think advertisers now really understand.
Speaker Change: Cookies are profiling individuals and there are varying levels of discomfort for that we're not we just look at behaviors and when you look at what cookies are backward looking theyre trying to guess whats youre going to do based on what you did where real time, we know exactly what you're doing and I think thats very simply why we're better and why we don't mind cookies still.
Speaker Change: Hanging around is the comparison, yes.
Speaker Change: The last thing I'd say.
Speaker Change: Power.
Speaker Change: Powerpoint is not the answer to anything but we tried in the <unk>.
Speaker Change: Investor presentation spent a lot of time with <unk> team to really lay out what decipher is and then how it decipher and decipher plus work off of what it is in this slide in the presentation.
Speaker Change: And we would encourage investors to look at what we're doing with context connecting it to data and predictive analytics and then going.
Speaker Change: <unk> inventory and off.
Speaker Change: Got the real time first party data of the biggest publisher in America across the biggest consumer categories. In America. So we feel really good about where we are.
Speaker Change: Thank you and then Corey with respect to <unk>, joining our board and the announcement with Arc House Archives, and IAC Investor who has a really strong believer in the economic value embedded in our shares.
Speaker Change: Highlighted that publicly we've had constructive dialogue with arc house.
Speaker Change: Our nominating committee believes Mr. Brahmins background in technology and capital markets as well as his board service experience.
Speaker Change: In a number of public companies.
Speaker Change: We will be valuable as IAC continues to execute its strategy. We're excited to have him join the <unk> board and work with US he is filling.
Speaker Change: The seat that had been held by Joey Levin.
Speaker Change: And we're excited to move forward with them on our strategy.
Speaker Change: Thank you Corey operator next question.
Speaker Change: Next question comes from Ross Sandler from Barclays. Please go ahead.
Speaker Change: Great.
Speaker Change: The bigger slide deck talks about.
Speaker Change: New direct to consumer experiences.
Speaker Change: Just curious.
Speaker Change: Could you just elaborate on what you guys are doing there.
Speaker Change: How many other.
Speaker Change: Meredith sites might be open to something like this and kind of what kind of impact that's going to have on growing your owned and operated inventory. Thank you.
Speaker Change: Yes sure.
Speaker Change: Good question.
Speaker Change: So one thing we've said.
Speaker Change: One of these calls in a bit, but we've been saying that anybody who listen as our objective as a business is.
Speaker Change: With our brands and our audiences and our strengths and the emotional connections we have we need to focus more on connecting directly with our audiences indirectly with our advertisers and.
Speaker Change: One of the things we've been able to do is we've really been able to do that we've been doing it quietly I mean, theres a fund statistic around here that we.
Speaker Change: We can share with you on this call is when we.
Speaker Change: And it goes to why we're going direct when we put <unk>, Josh and Meredith together about 60% of our traffic with some Google search right now, it's a little bit more than a third and we've grown all the way through that and Thats, because we are able to really connect with users and that doesn't even account audience as we built on social that's just traffic to our <unk>. So when you look at what we've done.
Speaker Change: <unk>.
Speaker Change: We've taken our biggest properties are the biggest areas, which is entertainment with people, which is a food and recipes with my recipes and which is our superior AD targeting with decipher plus and all of these are ways to connect directly with audiences and advertisers and what we've seen is a really strong take up for this just like we've seen over.
Speaker Change: Really strong pickup for participating in our events because I consider really shrunk tick up for advertising on our social.
Speaker Change: And it's a long term strategy look if you do what we do.
Speaker Change: You have to pay attention to the market. We've been at this a long time I've been here almost 12 years, the media landscape looks entirely different than it did when we got here and we have done nothing but grow and adjust the whole time and.
Speaker Change: We feel very positive that we're going and the second part of your question was what else Youre doing you guys should expect to hear from US new projects of the size and scale of our my recipe or people app.
Speaker Change: I'm not going to say every quarter, but with great frequency and we've got a one of the things. We've done is we've pivoted our organization, which is not that easy to do.
Speaker Change: To really focus much more on innovating these things than we have focusing on the old business model. If we're not careful we got real innovators dilemma that old model that works, but would decline, but we've had this forever. There's been growing on 10 years like this so we're constantly doing new things, we're really trying to be.
Speaker Change: Innovation, new ideas forth I think again.
Speaker Change: Launching the people out launching my recipes launching decipher plus it teaches us and it teaches the AD market that you should expect new things from us and excitement from us and energy from Us and we really like where we are and what I can say is stay tuned theres going to be some more.
Speaker Change: Thank you Ross.
Speaker Change: Operator next question next.
Operator: Next question comes from Justin Patterson from Keybanc. Please go ahead.
Justin Patterson: Great. Thank you very much good morning.
Justin Patterson: Approaching a one year adopt ash working with open AI could you talk about your learnings from this partnership and perhaps more broadly for Chris how youre thinking about AI opportunities for the rest of IAC portfolio I know you called out there being a potential beneficiary in the prepared remarks.
Speaker Change: And then just a big picture one for Neil.
Speaker Change: Obviously, the other big AD industry news and it's just the Google Doj trial, how might the world looked at differently for Dot Dash, if we see some divestitures and what opportunities that might create for you. Thank you.
Speaker Change: I'll do the open agile.
Speaker Change: They have been.
Speaker Change: A really good partner for us.
Speaker Change: Now what I would say is we do not have productive relationships with.
Speaker Change: Other people in their space, but with open AI, they've been great where our engineers are cooperating we're really helping them rollout some of their products are helping us rollout our products. They were very big help with some despite for targeting.
Speaker Change: With some of the AI things, we can do around modeling, it's been very very positive and I think.
Speaker Change: The choice we made it said we want a seat at the table with these guys that are at the tip of the spear on these things I think for the first year, we were right and it's been really really helpful. For us in terms of how we are moving AI into our processes.
Speaker Change: And getting a say in the future health of Stuff's working.
Speaker Change: In terms of larger deals I'll, let Chris talk about that yes. It is.
Speaker Change: Like a lot of things, where there is so much buzz.
Speaker Change: And then when Theres really substantive increasingly substantive applications people are almost tired of hearing about it so we're in that stage.
Speaker Change: Cross the portfolio.
Neil Vogel: We have essentially a bit of a lab, where neil's team, we'll apply it on certain things.
Speaker Change: Vivian I actually think is the most <unk>.
Speaker Change: Recipe and creative in how they've applied AI is doing it but you've got care.
Speaker Change: There are opportunities at Taro.
Speaker Change: And at our search business.
Speaker Change: They've done applied AI.
Speaker Change: Through real time bidding and other activities.
Speaker Change: What's clear is.
Speaker Change: Where you have.
Speaker Change: Massive datasets, where youre doing optimization at opt.
Speaker Change: Optimization activities, so things like smart matching or fraud detection.
Speaker Change: You've got you've got real advantages there we've seen that occur.
Speaker Change: <unk>.
Speaker Change: Clearly customer service and you've heard the comments from Sam Altman, and others that sort of level one level two CSR activities.
Speaker Change: We're probably going to go rapidly to voice voice, driven AI and if done right. It's a better experience when we debate. This all the time, but I think of it as the.
Speaker Change: The ATM experience at the bank, where most of US never want to go into a bank teller again, I think once you have a sort of.
Speaker Change: Pseudo omniscient AI <unk>.
Speaker Change: Efficient.
Speaker Change: <unk> activated call service representative Youre not going to go on I want to go back to a human using a dropdown screen and searching for information.
Speaker Change: What it's done for decipher is clear.
Speaker Change: And then also.
Speaker Change: We're seeing interesting things on Onboarding and indefinitely on marketing I think over time there'll be a.
Speaker Change: Through agenda AI real changes to our marketing creative is generated tested optimized placed.
Speaker Change: You're still going to have humans involved it's not going to be a cycle of machines, but much faster cycles that.
Speaker Change: We will have benefits overtime, yes ill go to the Doj Google.
Speaker Change: So I think theres two answers to that first the legal case itself, but I assume youre talking about sort of the daily mail related.
Speaker Change: Legal case the settlement vertically just came out.
Speaker Change: Yes.
Speaker Change: What I would say is were.
Speaker Change: We're looking very closely at it we're trying to figure out.
Speaker Change: How we actually participate in this in some way or don't.
Speaker Change: I don't have any real news on that we're obviously very close to it but I think from a business perspective I mean this is like my favorite line from my favorite to show the wire, which is great line is Baltimore gentlemen, the gods will not save US right like nothing is.
Speaker Change: We will function and always have functioned as if we are on our own and we need to have great relationships with advertisers great relationships with audience really compelling offerings really compelling brands and we will be fine.
Speaker Change: We will continue to operate obviously the ecosystem changes I feel very confident we'll be at the front end of reacting, but we'll have to see I think.
Speaker Change: <unk>.
Speaker Change: Full outcomes remain to be determined obviously.
Speaker Change: Also I would just say that to continue the wire analogy, we will defend our turf totally.
Speaker Change: Our IP and that's.
Speaker Change: Yes, the corners only in legal matters, but we will do that.
Justin Patterson: Justin does that answer.
Speaker Change: That question.
Justin Patterson: That's perfect. Thank you both.
Speaker Change: Okay. Thank you operator next question next question comes from Tom Champion from Piper Sandler. Please go ahead.
Tom Champion: Good morning, guys.
Speaker Change: Chris maybe you could talk about care for a little bit, particularly.
Tom Champion: Tumor side of the business.
Speaker Change: How is how is leadership.
Tom Champion: Yeah.
Tom Champion: Working on the challenges there.
Speaker Change: Neil maybe just a quick one for you I would love to.
Tom Champion: Have you talk a little bit more about what youre seeing in the spot market.
Tom Champion: The growth there relative to what you've seen in the past what what do you. What do you think is driving that performance why why would that not be a.
Tom Champion: Say, a leading indicator.
Speaker Change: For the market. Thank you.
Tom Champion: <unk>.
Speaker Change: Spot market, you've been really erratic and I think that is in line with what.
Speaker Change: Everyone sees feels right like a lot of advertising is confidence.
Speaker Change: And Sunday as people filling covenant and sometimes theyre not.
Speaker Change: I wish I had more definitive insights for you I'm reluctant to do it because I got a 50% chance of being wrong, depending what happens tomorrow.
Speaker Change: Again, it is true obviously look spot markets are very good window into what is happening.
Speaker Change: It's very moment.
Speaker Change: I'm not totally sure it's indicative of tomorrow, if the spot market gets better tomorrow.
Speaker Change: If you are looking for a song.
Speaker Change: We're getting better we're getting worse.
Speaker Change: I just.
Speaker Change: Im reluctant to say either way.
Speaker Change: And the only thing I'd add keep me honest here Neil.
Speaker Change: We have no T moves sheehan or de minimus exemption in our direct base.
Speaker Change: On the broader programmatic market. They were a player I mean, especially on mobile apps and all of those variables. The math of those guys coming out of the market because they spent a lot of money. Although it was generally below they can't afford our sites basically.
Speaker Change: <unk> expenses.
Speaker Change: Well were expensive because we perform relative to what they buy but when there's.
Speaker Change: Big chunk of demand comes out of the market.
Speaker Change: Prices are going to go down so that definitely could be a factor in this as well that would be something.
Speaker Change: Specific to the programmatic market, but especially given our endemic base of advertisers across our brands, we would have a different dynamic on premium for sure sure.
Speaker Change: We're not.
Speaker Change: Absolutely Tom it's just more those are the kind of questions we're working through.
Speaker Change: On care.
Speaker Change: Thanks for the question on that we broke her out as a segment.
Speaker Change: Earlier this year for the first time.
Speaker Change: Yeah.
Speaker Change: Set the backdrop.
Speaker Change: It is the number one provider in its area of consumer.
Speaker Change: Care access information childcare senior care pet care.
Speaker Change: Keeping et cetera.
Speaker Change: We got the most liquidity on both sides of the platform including.
Speaker Change: Demand and caregivers.
Speaker Change: And it's.
Speaker Change: It's a good brand a great brand.
Speaker Change: We bought the company in 2020 and at the time of the acquisition IAC knew there were core issues with the platform with the product and the experience.
Speaker Change: A lot of time was spent.
Speaker Change: Early on improving the base platform for.
Speaker Change: <unk>.
Speaker Change: Resiliency.
Speaker Change: Quality of a consistency of experience and putting the pieces in place to eventually improve things up the tech stack like the.
Speaker Change: The product.
Speaker Change: Pricing packaging and payments.
Speaker Change: But because of that in that period the product didn't improve.
Speaker Change: But also in the vein of.
Speaker Change: You might start to think you're better than you are the pandemic was.
Speaker Change: A real post pandemic period was a real boost for the business as.
Speaker Change: There was major demand for child care and senior care as people came back to work and a lot of ways that mast deficiencies in the product in the 'twenty two 'twenty three period.
Speaker Change: And then as that tailwind subsided and frankly, given some of the wage increases that have occurred.
Speaker Change: The realities there has been more pressure on the category of care.
Speaker Change: The realities of the product came to the fore.
Speaker Change: Brad Wilson went in as CEO.
Speaker Change: Less than two years ago, and he and his team.
Speaker Change: Significantly.
Speaker Change: Upgraded the team and brought in new talent had been working to steadily improve the product and experience as well as pricing packaging. So where we are right now on the consumer side, we have three core priorities this year the product.
Speaker Change: And they've made some improvements last year, but this year. They are really rolling out major improvements in matching.
Speaker Change: So getting the most accurate match of a caregiver based on the specs of the care seeker messaging. The product was very antiquated in terms of one to one cross messaging of seeker and caregiver to figure out if it's the right match.
Speaker Change: Search on the platform very basic things, we're catching up and moving the ball forward, there and fulfillment. So thats the product the second is optimizing pricing and packaging.
Speaker Change: <unk> basically been a one size fits all product of a subscription.
Speaker Change: With the improved platform and product they can rollout.
Speaker Change: Different entry points.
Speaker Change: And offerings to meet care seekers, where they are and what they need and then finally once you once were.
Speaker Change: Happy with the product and packaging is marketing and that's both Reenergizing the brand of care and then also improving spend efficiency. One of the learnings was we had an always on model that was pretty inefficient relative to there are significant periods during.
Speaker Change: The year when the preponderance of care of acquisition of House care household care occurs so we've seen improvements already in responsiveness and fulfillment in the product versus the old as they continue to ship.
Speaker Change: Improvements were excited about that it's going to be around Q3 early Q4 before the price of the product will always continue to improve but we really have the product where we want it we are pricing and packaging rolling out and then we will have improved marketing.
Speaker Change: And we will step up the spend.
Speaker Change: In Q3, which is a big search period, so a lot a lot of work to do.
Speaker Change: We feel confident we will get.
Speaker Change: The consumer business back to stability and definitely we think it will grow in 2026, and Brad and team are taking the right steps.
Speaker Change: Thanks for the comments guys.
Speaker Change: Thanks, Tom Operator next question.
Speaker Change: The next question comes from Youssef Squali from Truest. Please go ahead.
Speaker Change: Hi, guys. This is Robert Taylor on for Youssef Squali, Thanks for taking our questions.
Speaker Change: On the Google partnership I'm curious, if there was any cloud hosting savings as well with that and.
Speaker Change: What impact do you guys are seeing to traffic if any from search algo changes as well as google's transition.
Speaker Change: And then on programmatic I just wanted to unpack the drivers behind the softness I think you guys.
Speaker Change: You mentioned some impression.
Speaker Change: Ontario earlier, and I, just wanted to reconcile that with.
Speaker Change: Strong advertisers, leaving the market and the pressure on Cpus as well sorry can you just can you just explain that last question one more time, we've got I've got the first yes.
Speaker Change: Yeah sure on the programmatic I'm just curious I just wanted to unpack the drivers behind the softness a little bit I thought I heard you guys say that impressions were lower earlier on the call. So I just wanted to reconcile that with what you said about human machine exiting the market and driving CPM stem as well, Okay got you.
Speaker Change: I definitely understand that question on the first question the Google contract is for search.
Speaker Change: So there was no cloud component to that Thats, just the long term.
Speaker Change: AMG search partnership with Google related to its business. We have we use all of the cloud services and our companies.
Speaker Change: But there was no bundling of vendor relationship there just standalone search.
Speaker Change: Yes.
Speaker Change: No impact.
Speaker Change: For those of you don't know Thats, the Google AI answers at the top of the page.
Speaker Change: Right now though.
Speaker Change: I'll show up on about a third of our searches.
Speaker Change: You see a little performance decline on those pages, it's very hard to get a handle on exactly how.
Speaker Change: How much because theres so much else going on that page also there are so many other features and search features and read it and Google going so much with that page.
Speaker Change: I don't want to editorialize from a user point of view, but it's a very confused page.
Speaker Change: Page right now and as I said earlier.
Speaker Change: When we put the businesses together, 60% of our traffic was from Google search now, it's probably a little bit more than a third and we've managed to grow all the way through and we've said many many times in our history.
Speaker Change: We are extremely happy to get traffic and audience from other algorithms and interim sources, but it is entirely incumbent upon us to manage those sources and be sure that we're meeting users where they want our content and we've been able to do that so.
Speaker Change: It's hard to say what the actual impact is I actually don't think for us it's.
Speaker Change: Jai yet.
Speaker Change: It might be a little bit.
Speaker Change: And it's more in the context of a whole search page so I'm not overly concerned about it yes, I mean I would think about it. It's Google search is about a third of our traffic and you are seeing in AI overview on 35% of that and then you've got.
Speaker Change: A small decline in click through its not a significant part of our traffic yeah exactly it's much clearer way of saying it that I said it the other way.
Speaker Change: The other thing we see.
Speaker Change: Is.
Speaker Change: As cluttered as the search pages as IAC wide.
Speaker Change: Cluttered as the search page has become with red It an L.
<unk> and <unk>.
Speaker Change: E Commerce and everything.
Speaker Change: <unk> still do well and being.
Speaker Change: It's sort of this.
Speaker Change: Massive.
Speaker Change: Spreading where top one two.
Speaker Change: Three brands in categories are doing that much better so.
Speaker Change: So we see it also in our noncore.
Speaker Change: [noise] titles at <unk>, where we are.
Speaker Change: Investing behind them, but also.
Speaker Change: The weaker brands just get washed out to the ocean.
Speaker Change: And at least in the.
Speaker Change: A search for a context of a search basis theres still value with consumers there is still value with advertisers, but you've seen.
Speaker Change: A huge spread in search so we're still we're still.
Speaker Change: Feeling very good about our top brands and again that theme of brand and consumer Trust continues across all elements of the business on programmatic. Thank you for the question, it's really bifurcated between.
Neil Vogel: Neil's comments.
Speaker Change: We're on pricing and then I was talking about.
Revenue for <unk> for <unk>, so on pricing.
Speaker Change: Programmatic prices have been up strongly for a while.
Speaker Change: With the recent.
Speaker Change: Concerns about tariffs and such it's essentially gone to flat pricing year over year.
Speaker Change: That has some impact on programmatic the point I was making was.
Speaker Change: How are.
Speaker Change: Programmatic inventory or quantity works is we have our sessions and we sell as much as we can through premium direct given the.
Speaker Change: The improved CPM and also it's strategic for us to provide that inventory to our direct.
Speaker Change: Through our direct partners and help them execute on their campaigns.
Speaker Change: If you have some slight slight.
Speaker Change: Traffic declines as we did in core in Q1 that just means there is less.
Speaker Change: Traffic for programmatic so think of it in Q1 is.
Speaker Change: Some less traffic for programmatic, partly because of the overall traffic declined slightly but also because premium soft up more and then.
Speaker Change: In Q.
Speaker Change: Two as we see traffic coming back to stability and maybe some slight growth in Q2, but programmatic prices are no longer a tailwind given some of the market disruption we've seen.
Speaker Change: Operator, Thank you operator next question.
Speaker Change: The next question comes from Nick Jones from citizens JMP Securities. Please go ahead.
Speaker Change: Hi, This is Luke on for Nick Thanks for taking the question I guess, just double clicking a bit more on care Dot com I know, it's a tough.
Speaker Change: Tough macro environment, but.
Speaker Change: At a high level what are the key strategic priorities there to kind of help accelerate growth in the coming quarters or years. Thank you.
Speaker Change: Yes, thanks for the question.
Speaker Change: I would say.
Speaker Change: At the end of the day care on the consumer side as India as an industry lead is the industry leader and on the enterprise side is definitely one of the top companies with clear advantages.
Speaker Change: We've got liquidity on both sides of our marketplace.
Speaker Change: Just care seekers, the consumer on one and then caregivers.
Speaker Change: Chile, SR pet et cetera on the other.
Speaker Change: So it is really around execution.
Speaker Change: And making the product the experience the matching as good as possible.
Speaker Change: And continuing to through that drive initial conversion recapture because right now it's a subscription product so.
Speaker Change: People go on get a caregiver may lapse or cancel their subscription comeback on get a senior caregiver or a new child caregiver. So.
Speaker Change: Theres a number of elements of initial subscription and then recapture and re engagement and you've got to keep making the product and experience as good as possible that is where we have missed the most over the last few years and we feel good about the path. We're on next as pricing and packaging as I said in the third as marketing and we've known <unk>.
Speaker Change: <unk> was inefficient.
Speaker Change: And sub optimal but we came to the decision to hold off on.
Speaker Change: Really pushing behind it reinvigorating the brand until we had the product where we want so it's really been a it's a serial game plan that we have.
Speaker Change: On the enterprise side.
Speaker Change: It's it's a it's a true cultural shift post pandemic.
Speaker Change: They're backup care and that service.
Speaker Change: Is increasingly a base consumer sorry based employee benefit.
Speaker Change: And we've benefited from that.
Speaker Change: We think cares care for businesses offering.
Speaker Change: <unk> backup care customer.
Speaker Change: Support access to the.
Speaker Change: Take care.
Speaker Change: Database of caregivers.
Speaker Change: <unk>.
Speaker Change: Our light service through life care life service offering.
Speaker Change: The offering is truly differentiated so for us on enterprise, it's really three pronged one make help employees, who have access to care for work with care for business no what they have and utilize it to.
Speaker Change: To continue to improve the product to make it as easy to book backup care as an employee as possible and then three acquire new logos and Thats new sales of Fortune 500 companies all the way down to small business through our own sales force. So we're heads down and continuing to execute but the tailwind the dynamics of.
Speaker Change: Pressure on.
Speaker Change: Households for both senior care and child care is not going away and.
Speaker Change: It's really as we've said before in the four corners of care to execute.
Speaker Change: Thank you operator last question.
Yigal Iranian: Our last question comes from Yigal Iranian from Citigroup. Please go ahead.
Yigal Iranian: Hey, guys. Thanks for squeezing me in.
Speaker Change: We spent a lot of time talking about the programmatic side maybe thought.
Yigal Iranian: Talking a little bit more about the premium side and strength youre seeing there.
Speaker Change: Are those commitments.
Yigal Iranian: Kind of multi quarter.
Speaker Change: What are you seeing there.
Speaker Change: I think Neil you mentioned, okay premiums strong but.
Speaker Change: Advertisers are.
Speaker Change: Looking around at the environment.
Speaker Change: What's what are the trends what are your advertisers, saying as we look forward a couple of quarters.
Speaker Change: And then.
Speaker Change: I'm not sure if there's anything to add here, but if there is we would love to hear just around on the M&A environment.
Speaker Change: Can you kind of move to this stage any change or focus on areas that you'd kind of want to look into from here. Thanks electricity have anything I'll do the.
Speaker Change: Premium our premium business coming into this year was super strong.
Speaker Change: First quarter was.
Speaker Change: It was very good as Chris said.
Speaker Change: Second quarter.
Speaker Change: Where we would hope to be.
Speaker Change: <unk>.
Speaker Change: Again, I think a lot of it is relative to the market. We've got really good offerings. We've got really good brands and get really good audience or stuff performs decipher is really helping.
Speaker Change: Again.
Speaker Change: I would love to be able to answer your question more thoroughly and more eloquently, but we just don't know if again if if.
If things hanging on where they are I think we feel pretty good about.
Speaker Change: We're going to be going.
Speaker Change: Before I hand, this macro to service at the end of last year, we felt fantastic we're executing at a high level, having great conversations and I guess look.
Speaker Change: Advertisers are people to look at markets.
Speaker Change: They look at it like.
Speaker Change: The way you guys are looking at their analyst right.
Speaker Change: Ceos and Cmos are analysts so.
Speaker Change: It's just the way of saying we don't.
Speaker Change: Really no but.
Speaker Change: But as of right now there's nothing to suggest that we won't do find the rest of the year.
Speaker Change: Essentially good the rest of the year, but we will say, yes, and I would say this.
Speaker Change: It goes a bit to our.
Speaker Change: Our approach to guidance and how we thought about it.
Neil Vogel: Neil said, it well which is.
Neil Vogel: We are looking closely at the data to identify trends and patterns.
We're very thankful again, the <unk> and <unk> are not in our base that we have to comp against partly that was because as Neil said, we price them out of our inventory, but but.
Neil Vogel: It's great.
Neil Vogel: Broader IC.
Neil Vogel: We're looking at care and others, we've seen some some recent softness in conversion, but that can be volatile from quarter to quarter in a volatile, but no material moves on enterprise for care, we're looking to see if employers lay folks off.
Neil Vogel: Or significantly reduce havent seen that yet, but we're we're cautious on the world.
Neil Vogel: Where we sat to Neil's point, when we did our original guidance for the year in February.
Neil Vogel: We factored in some volatility for the unknown it seemed like every year I've been here we've had some.
Neil Vogel: Unknown unknown come out of the woodwork and hit US we had some factoring in there by the end of March.
Neil Vogel: We were seeing in our business is trending to the high end of our guidance ranges.
Neil Vogel: <unk> for example.
Neil Vogel: March April saw digital revenue growth of 13% and 18% respectively across across all digital.
Neil Vogel: And we would we were pacing to be up low double digits for the second quarter now we're at 7% to 9%. So we're factoring in some economic slowdown in the rest of Q2 and Q3 in our guidance, but no significant recession.
Neil Vogel: And also our businesses are thinking about cost actions they can take.
Neil Vogel: Which.
Neil Vogel: If things were going great you would continue to invest in your business macro, but they can take to be thoughtful around their cost structure. So this is the approach we're taking in into our guidance based on what we're seeing right now as Neil said.
Neil Vogel: With respect to.
Neil Vogel: The second question.
Neil Vogel: M&A environment.
Neil Vogel: We've.
Neil Vogel: We're we're we're.
Neil Vogel: We're excited.
Neil Vogel: We're looking at different things, we highlighted some of the industries that we're that we're thinking about.
Neil Vogel: We've always asked ourselves how do we build a big business or concept into something much bigger.
Neil Vogel: That can be through early seed investment it can be through roll ups consolidations or it can be through buying.
Neil Vogel: Underappreciated larger businesses that we have a different thesis on.
Neil Vogel: Digital is definitely tough.
Neil Vogel: Tougher than it was 10 to 20 years ago, but we still see opportunities.
Neil Vogel: And we're looking across experiences digital enablement of experiences what we have seen an MGM.
Neil Vogel: Through the in person experiences digital gaming like live dealer through bet MGM others.
Neil Vogel: You can see where the puck is going.
Neil Vogel: And the opportunities as things become even more real time and personalized.
Neil Vogel: And then there's always idiosyncratic things we're interested in how AI is going to influence consumer interactions gaming et cetera.
Neil Vogel: To reveal too much but.
Neil Vogel: We are we are working away and think we will have some interesting opportunities.
Neil Vogel: Thank you al Thank you.
Neil Vogel: I believe that's it operator.
Speaker Change: Yes that was the last question. Okay. Thank you all for your time and engagement and <unk>.
Neil Vogel: <unk> have a great day.
Neil Vogel: Thanks.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yeah.