Q2 2025 IAC Inc Earnings Call

Hello, and welcome to the AC second quarter 2025 earnings conference call.

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Oh, now I turn the conference over to Christopher Halpin I AC CEO and CFO. Please go ahead.

Thank you. Good morning everyone, Christopher helping here and welcome to the IAC, second quarter earnings call. Joining me today is Neil Vogel CEO of the newly rebranded People Inc.

IEC is published a presentation on the investor relations section of our website today. Entitled Q2 earnings presentation on this call Neil. And I will provide some introductory remarks referencing that 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 laws. These forward-looking statements may include statements related to our Outlook strategy and future performance and are based on current expectations, and on information currently available to us, actual outcome 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 10K, and in the subsequent,

Reports, we file with the SEC, the information, provided on. This conference call should be considered in light of such risks. We all will also discuss certain non-gaap measures which, as a reminder include adjusted IBA, which will refer to today as ibitta for Simplicity during the call. 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.

Covered that. Let's turn to the presentation.

On page 3, ic's businesses, continue to seize momentum and make excellent progress against our goals in the second quarter of 2022.

Dot dash Meredith rebranded, as people Inc, a new name with a storied Legacy that it befitting a company where people that is human experts. Create the premium content that people are consumers and readers seek for entertainment and information.

We truly believe people Inc. Achieves that by providing Superior content across Superior Brands. Using Superior technology.

This quarter despite the volatility and uncertainty in both the macro environment and open web. We're happy to report that people Inc, return to core sessions growth, and Achieve 9%, digital Revenue growth accelerating from 7% in q1 and at the high end of our guidance.

We are also thrilled to complete a 1.4 billion refinancing of our debt at People Inc. In June replacing, the original acquisition capital structure with new Bank, debt and bonds at attractive pricing and 5 to 7 years. Maturity Neil will go into more depth on people in shortly.

MGM reported second quarter, earnings last week and demonstrated the power of its Diversified gaming portfolio with strength and digital. The Regionals and Macau offsetting softness in Las Vegas. We're particularly excited about betmgm strong results, 36% net revenue growth in the second quarter and increased guidance for the full year to at least 2.7 billion of Revenue. And at least 150 million of ibitta.

The digital gaming opportunity to MGM, has always been a core pillar of our thesis and it is great to see those assets. Performing so well.

Our second largest wholly owned business, Care.com, revitalized its product and brand in June, a key step in its comprehensive plan to re-energize growth in its consumer business, Care. We also unveiled a fresh new look and launched a new marketing campaign across its offerings, as we will discuss shortly. While it is early days, we are seeing promising signs across engagement metrics.

Finally across Consolidated IA adjusted ibaa, increased 15% in the quarter, and we are guiding to 247 to 285 million of ibida for the full year.

While also exploring strategic divestitures of non-core businesses to bolster that cash balance. Now, let's go deeper into our 2 largest, wholly owned businesses with that. I'll turn it over to Neil. Thanks guys. Um,

1 of the things we just did which was change our name to people link from dot dash Meredith. I think this is a very good time for us to reset and reflect on where we sit in the market, reflect on the media markets, uh, and give you guys some context as to our strategies and what we're doing. And, and, uh, I think the thing we're most excited about the people like name is

Dr. Meredith was the name of convenience for us. We put together the names of 2 companies. We didn't want to offend anybody. Um, we wanted to live with it and uh, I'll be a bit more generous in our chairman Mr. Diller. Who did not like the name at all. Uh, I was happy to live with it until we until we could really find something better and we did and it turns out the name we wanted with emotion and aspiration, and ambition, and simplicity baked in with people Inc, it's the name of our hero brand. It's sort of been with us the whole time much like great businesses like Coca-Cola. We feel like the the flagship brand should be the name of the business and rather than having to say we're dot dash merediz. And then the first thing you say is where people we can. Now just say that we are people, uh, but I think the thing that got us most excited and it sort of keeps us off into the rest of the story is what people also means. And it means that we are content made by people for people. We are very aware and

Bracing of AI and things.

Other things in the marketplace but it's really important that experiences of our experts. Our writers, our product testers our Paramount, to Our Brands and many of these brands have a 100 Year, history relating to people and people in like a fitting name. And there's a little bit of an Easter egg in there. For, for those of you who like, uh, watch the media inside baseball, it is a little bit of a play on the old timing name, which again, suggests some of the best Brands, uh, in Media.

So, that was slide 4. Let's go to slide 5 and we're going to zoom out for a second. And there are 2 things that we have that we think are going to propel us into the future. 1 is an incredible uh series of iconic Brands and 2 that we have scaled audiences and it's helpful to zoom out and look at media and the type of media that we do. So

Food, home, Tech, travel Beauty style entertainment, 30 years ago, these Brands were exclusively communicated in some form of print, then that changed. And they

The content and uh, the relationships all moved online. And when they moved online, that's when we got in this business and we took great advantage of that transition from offline to online and by making smart Investments and and

By being very disciplined in how we did things. And by recognizing the power and permission of these Brands, we built a really strong, oh, Ando business owned and operated websites. Um, that really, really grew and put us, uh, at sort of like the top end of the brands in each of the categories in which we compete. Now, that business was a Google driven business, right? And if we don't go back too far, Google was 70, 80? 90% of the track on the open web came through Google and we got very, very good at Google.

and um,

We were very successful and we ended up buying Meredith and doing these things. But we also noticed uh around 3 coming out of the pandemic 3 4 5 years ago, Google started to send out less and less traffic to people like us to Publishers and to others who created content and that is Google's prerogative, right? Is it? So so we're like, okay, we need to figure out how we're going to live in a world where Google traffic might not be The Driver of our growth.

And then add to that 2 and a half years ago. Uh,

Chat GPT, but we launched commercially. And we saw that. And we, we had a, we had a, a very fateful meeting where we sat met with Sam almond and we saw chat gbt right before it launched. And we said, you know what,

This is going to be a catalyst for change for us. We need to connect directly to our audiences and we need to connect directly to our advertisers and we need to have leverage here. So knowing that Google is favoring Google results, doing things with Reddit. Knowing the chat. Gbt is coming around is going to be a search answer replacement. What can we do?

And if you look at slide 5, slide 5 is the outcome of a process that we really started 2 and 3 years ago. And if we can go left to right, we have 3

Is going to be the underpinning of our growth going forward. But what we have really done over the past few years is build other assets. We've built a tremendous email business. Our pin business is strong people to make events business is a very big syndication business, and our owned, and operated sites, and our owned and operated assets, are very vibrant to that

We've really added incredible, off-platform audiences across Apple news and YouTube and Instagram and Tik Tok and this is the process of lots and lots of investment. And lots of lots of time from us and the way we run the business now.

Is we, we look at our business and say, okay, we need to aggregate audience, from as many sources as possible. And incredible diversity of audience sources. We have a term we use internally called Google Zero. What happens? If Google goes to zero, what happens if Google no longer sends us traffic? Well, I think we're going to be very healthy and then, um,

The third thing we've done is taken our most valuable asset which is our data. And the first party data that we know about our audiences and we can extend that data across the open web. And we've talked a lot before about our decipher ad targeting that allows us to contextually Target based on uh visits to our own sites.

and,

By allowing us to take that data and spread it across the open web, so we now can Target advertisements off of dot dash Meredith. And what that does in a lot of you guys have asked, is that really expands our addressable Market? We are 4 to 5x in addressable Market, if we can use our data to Target other people's sites than our sites. So you can get our quality of performance and do it around the internet. So if you, if you look at this slide and it's like, okay, we've got

A healthy open web business. We've got all these incredible new assets. Underpinned by our world class Brands, we have these rapidly growing all platform audiences. And we have these addressable audiences well, beyond our own and operated assets.

I like our pool of assets, and I feel like we have what we need, the audiences, the brands, the technical skills, and the products to hit the revenue goals that we've laid out for everybody.

so, if you go to the next slide, um,

This is some.

Factual, uh, background to what we just talked about. And if you look at the left, you can see core sessions and these are sessions to our core sites. And you can see over the last 3 years, in 23 to 25 core sessions have grown while

The percentage of traffic from Google has shrank. Now, there are 2 reasons for that 1. Google is changing their search page rapidly to favor things. Google chooses to favor and 2. That is the impact of AI. When people talk about the impact of AI on our business, they're really talking about search for us because, as AI competes with Google and Google Play on their page or someone chooses to go somewhere else for search. Um,

There's no guarantee we get a link, like the old days like we used to get a link, so you're seeing, uh, our traffic from Google go down while you're seeing our overall sessions go up and that is everything we talked about on the prior page. The second thing, the middle chart is off platform views and we've done an outstanding job across Our Brands, whether it's people or travel and Leisure or food and wine are real simple of building off platform views, and this really started actively investing in the in this, in 2023 2024 and you can see the results so far in 2025. Now, about a third of our digital Revenue comes from, um,

Sources that are not sessions related, that are not sessions based. And then you can go to the far, right? And you can see we've grown digital Revenue, all the while. And we, we are very proud that as we've made this transition from, what was

Uh print-based business 2A, digital owner owned, Google based business to a we have to be everywhere with these assets business. We've grown Revenue the entire way.

just to uh, add on a couple themes there, the going to core sessions, you know, that that decline in the the dark blue box, um from a billion to uh, down to 600 million

That is partly Ai. And also, you know, predating that, the numerous changes that have been made to the surf page over that 10 that time, including Reddit being heavily prioritized, um, as well as cluttering of the search page. So as, as Neil talked about the

Still continue to fill that hole. Uh, the second point, you know, as as Neil said

Those sessions generate, 64% of our digital Revenue, that's a key theme. So when you think about the, the remaining Google search exposure, it's, it's that 28% of that 64%, approximately that, that we're, we're talking about the, the off platform views are a component of our non, uh, non sessions are 36% non sessions based Revenue, along with things like licensing, um, related, uh, you know, Performance, Marketing, Etc. So, we we wanted to get across in this slide relative to the broader. AI question. How much Google searches? Come down and also the diversification in our digital revenues and the various growth factors we have from here and we'll talk about that. Um, it's a good transition to the next slide. Uh, our 3 primary Avenues of monetization advertising Revenue, Performance Marketing, uh, approximate for e-commerce and Licensing.

All of our Revenue sources are growing. Um,

Our Brands are super strong, our execution is good. We feel very good about the advertising business. We're very excited about our decipher plus business that we just talked about a little bit that allows us to use our proprietary data to help people buy across the open web. Uh, we think there's a big CTV opportunity in there as well. Um, Performance Marketing Commerce, we we we work very closely with the biggest retailers online I think in most

Cases. We are their largest referral partner and that's been a really robust business and even in our licensing business which this quarter has uh we're 2/3 lap. The openai deal that we signed last year, just a lot of strength in places, like Apple news and in Walmart and it speaks to the strength of Our Brands.

And uh Chris you want to do the next slide? Yeah. Turning to page 8. Um thanks Neil on the next page. 1 topic. We wanted to proactively cover today is our digital margins of this past quarter people's digital margins have been steadily scaling over the past few years with higher Revenue.

We reached just under 29% in FY 24, as a reminder, on a quarterly basis ibitta margins increase across the year with the lowest margins in the first quarter. And the highest margins in the fourth quarter uh due to revenue scale. And as we've grown digital Revenue we have expected to see incremental digital margin scale. You can see that demonstrated in q1 where margins were up about 100 basis points year-over-year on 7% Revenue growth in Q2, however, digital ebita was essentially flat year-over-year at 63 million. Uh, while revenues grew 9%, representing a 24, just 24%, adjusted IBA margin.

The increased costs and this is featured at the bottom of page 8, that reduced those margins. Derived heavily from the Strategic Investments Neil talked about across new products, technology and channels, everything we're doing to set the business up to grow.

We expect, uh, and are confident in getting Roi off those Investments including, um, in the third quarter that we're in this year. And so we expect adjusted ebit data to grow year-over-year. You can see the guidance on the right in Q3 on 7 to 9% Revenue growth, digital Revenue growth. Um and we expect margins in the 258% range and then get back to to uh Mark real margin scale on the fourth quarter.

So with that, let's turn to care.com on the next page which continues to be the largest Online Marketplace for families and individuals. Looking for household caregivers across children, seniors adults, pets housekeeping, the company offers its services through 2 channels consumer and Enterprise the left side of the page summarizes. The direct to Consumer segments, where care Seekers go online. Sign up, post jobs and are matched with care providers. Despite some consumer Revenue erosion over the past couple years. Care Remains, the clear leader in the online space holding its number 1 brand position with 62% of traffic coming from organic s sources.

Primarily direct navigation on the right side of the page is our Enterprise business where employers contract with care.com to provide backup care days and employee access to care services as a benefit to their employees. Today, care is relationships with over 700 employers, covering 31 million employees

Financially revenue is basically evenly split between the 2 segments. With both offerings, utilizing care.com database of approximately 700,000 caregivers.

Combination of core deficiencies in the product experience, suboptimal marketing, and some macro headwinds.

Turning our the page that brings us to the care.com relaunch in June the outcome of more than a year of work, the new care experience boasts. Fine-tuned search capabilities and enhanced messaging and matching offering care Seekers, a smoother experience as they hone in on the perfect caregiver for their essential job.

In many ways, care.com biggest challenge, has not been liquidity on either side of their Marketplace but instead optimizing the process for families and providers to match, connect and communicate on the platform, we feel good about where the product is today and where it is going.

On the right side of the page, care is held off on marketing over the last few quarters until the product was ready for prime time.

In parallel, with the relaunch.

Care.com has rebooted its visual identity with a new brand and integrated marketing campaign, highlighting the breadth and quality of its offerings. Product and marketing have been a challenge over the last few years. Now they are working in concert to propel the business forward.

In the light green, we highlight further areas for optimization as Care.com continues to refine its product, improve pricing and packaging, and push more aggressively into senior care and pet care—attractive growth areas that we are ready to aggressively pursue. Now that the building blocks are in place.

On the metrics front, it's still early but across June and July. We have seen core consumer metrics, direct navigation, visits signups, and subscriptions, achieve stability and growth really for the first time since 2022. A lot more to do. But we are moving on the right path.

Closing out on Care Page 11 summar is the financial picture a major pandemic boost followed by growth and Enterprise and softness and and in consumer over the last few years profitability is remained solid with 46 million in adjusted. EBA and minimal capex.

The key for care is to reignite revenue and generate the incremental margins. We Believe are possible.

Turning to page 12, we would reiterate that our discount remains pronounced in our mind. While MGM's share price has risen since last quarter, the implied value of our private holdings on the right remains negligible. As we've said before, we will continue to drive IAC forward to unlock, unlock, unlock value from those holdings, drive simplification, and shrink that discount, as laid out in the strategy overview on the following slide. Execution, capital allocation, and catalysts are the pillars of our focus and how we believe we will reduce that discount.

Turning a guidance, we have tightened the range of IAC Consolidated, adjusted Eva for the year, to 247 million to 285 million with the midpoint relatively unchanged versus prior guidance. At PeopleLink. We have reiterated full year digital Revenue guidance at 7 to 10% and brought down the high end of full year. Adjusted ebit. Dog guidance from 350 to 3440 million while maintaining the bottom end at 330 million.

This reflects our confidence in the revenue Outlook of advertising Performance Marketing and license. But with increased spend in investments, in new products like decipher plus my recipes and the People app.

As well as more than 3 million dollars in higher health, care costs hitting Us in the back half of the year.

For care. We maintain guidance, at 45 to 555 million and eighty search. We brought up the low end a bit.

Finally, on corporate, we continue to make progress on lowering our run-rate costs and have reduced the range to $110 million to $115 million, which includes approximately $20 million of one-time costs.

With that. Let's go to Q&A operator, can we have the first question, please?

Yes, thank you. We will now begin the question and answer session.

to ask a question, you may press star then 1 on your telephone keypad,

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Withdraw your question, please. Press star, then 2.

At this time, we will pause momentarily to assemble the roster.

2's, first question comes from John Blackledge with C with sorry with TD calling

Uh, thank you. Uh, so, so really helpful, uh, what you included in the earnings deck on, uh, sources of traffic, and how they build into Revenue. Can you just go into greater depth on how you see, the trajectory of sessions including Google search and off platform views, and kind of how that translates into revenue and margin. And then second question, can you just walk through puts and takes? Uh in the 2q people, link digital revenue and how you think about digital Revenue growth and and digital margins in the third quarter. Thank you.

Thing. Um,

Uh I think you're you're going to see sessions uh uh on o sessions. I think they're going to be the third quarter will be down a little bit. We have a very tough comp but I think going forward flat to slightly up is a fair expectation for us again, we're we're very actively uh, investing and hustling hard to keep on our sessions up and I think our results are results. Proved that I think off platform, you're going to see continued growth. Uh, probably continue to grow somewhere around the trajectory where we're growing now, now the numbers get bigger, the percentages are going to get lower but but um, you're going to see real growth there and it's it's a real, uh, investment area for us. I like Chris will do the know. We'll take the march of business. Yeah, and on, on margins. Um, you know, we view both uh,

On platform and off platform as uh, generating attractive, evidam margins. And and we are um, capable to do that because of the technology and and uh, offerings that we have. When you, I said before, last year, on a Consolidated digital basis, we generated 29%, um, adjustability. But that margins, uh, we we view non- session revenues, um, as uh, slightly accretive to that margin. And then, um, sessions on a, on a marginal on incremental basis session revenues, are are more creative. Uh, 1 of the natural questions. We'll get is all is all this uh off platform.

Form s, non session Revenue being done at low margins. It is not, we feel we feel good about the margins where we can do it and that um, you know we will continue to to scale off that 29%. Adjusted e beta margin and that includes decipher plus uh as well as off platform views on um, on third party. And we'll, we'll address the next question, which is the exposure to the off platform is we have really good diversity across all those sessions. It comes from a whole host of different places and different sources, uh, at different points in the life cycle. So we feel pretty good about when you look at the diversity of what's now uh driving core sessions and the diversity of off platform sections sections. I think the diversity is a real strength for us.

and then, I think you said your second question, John was about Q2 and, and Q3, uh, Revenue, um, in in Q2 digital

advertising group 5%. Um, led by 2% core session growth and some improvement monetization. We knew it was going to be a choppy. Uh, monetization quarter as we signaled, uh, on Advertising last quarter between, uh, giving all the disruptions around tariff and trade, for those, for those interested direct was solid. Direct premium sales were solid led by Health travel and Tech, offsetting not surprisingly, uh, cpg, food, and Bev and home. Programmatic pricing was flat for much of the quarter but began strengthening in June. Uh, and is is continued, currently, we're running up about 10% on pricing.

Year-over-year. Last quarter, Performance Marketing was very strong at 14% and Licensing, uh, also, um, solid at 20%, that that's real strength, in Apple news, you know, um, Neil and team, uh, are doing a fantastic job there. Also, some performance at Walmart and then some some open AI all in all strength. Really from our diversification of the Diversified the digital revenues that Neil talked about previously for the third quarter. We do have some tougher comps on traffic with the Olympics last year and and some entertainment. So we'd expect core sessions to be slightly down off, platform, growth and improve monetization should drive advertising Revenue growth. Despite that Performance Marketing continues to be excellent. Especially, you know, if you want a window into the consumer, the consumer is very strong. Prime day was great for us, in July, and Licensing. Should continue to grow, uh, led by Apple news Walmart and other areas. All in all, we're guiding the 7 and 9 percent digital Revenue growth in q.

Q2 Q3 and reaffirming 7 to 10% for the year. And then on margins, as we discussed previously regarding the 25 to 28%, uh, digital adjusted e, but the margins in Q3

Um, thank you. Yeah, thank you, operator. Next question.

Yes, thank you. That comes from Eric Sheridan with Goldman Sachs.

Uh, wanted to better understand what you look at as the m&a landscape. You're facing right now. So the alternative of returning Capital to shareholders be deploying it into external opportunities and and maybe a quick update about how you see that landscape right now. Thanks so much.

All right, I'll take I'll take the people thing first. So,

if you go to, let's talk about our goal first, our goal for the company for People Inc is We Believe

we can have platform scale with all the benefits of Premium branded publisher environments and we needed a name to reflect that. And again the dot dash Meredith name was quite simply putting together dot dash and putting together Meredith.

I don't think either of those names had any particular uh residents uh, in the marketplace. People does everybody knows what people is, again, it it was always the first thing. You said, uh,

When you're explaining what we did, but what we we really liked about it is. It's simple, it's clear. It has that second, meaning about what we are, where people making content, for people, um, in it is energy and ambition, and simplicity and and look, you can make a million jokes about it, you know, dot dash Meredith. Sounds like an oil company. People Inc, sounds like a media company and if our ultimate aspiration, and where we would like to end up again platform, level scale with, with premium, branded performance, and all the advantages of of these like, beautiful safe environments, both online and offline.

Line, uh, if you want to do that, you need to name it or Flex that and we wanted a name that when people are talking about the, the the, the great media companies. And and the the where we want to be like again, we're obviously not here yet but you have to Aspire to something I'd like it to be meta. Comcast people, right? Google and and it just hangs way better. I think the reception since last week across our clients and our, our advertisers and really importantly, our employees, everybody who's just really happy and really energized and it just

As as Mr. Diller said it just fit, it's easy and it fits. They the only regret I have is we probably should done it a little bit sooner. Uh, I may have been the resistance there but but we're really we're really happy with where it's ended up.

Um thanks Eric on m&a landscape. You know, we we are actively working looking at things, the small and large and as always through 2 prongs through our existing businesses, particularly People Inc, as well as uh, new platforms.

Look, we look for ways to be creative, think differently and find assets. That that we have an a different view on uh or an advantage. We continue to proactively pursue acquisition opportunities, through people link looking to build on its Premier Brands and Technology. I'd say the the more we continue to to as everything Niels said and is doing to make progress there, um, in many ways, the the more opportunities we see

That we have a particular advantage on so that that's a key area of effort on a new platform basis. We've been evaluating both public and private opportunities platform builds, as well as carveout opportunities. The investment Focus, we talked about this last uh, last call can be but putting 2 buckets quality, defensible businesses. Particularly where the first 1 is particularly where um, you know, AI disruption or disintermediation platform Risk. Everything uh, is reduced, we've we've talked previously about experiential businesses that cannot be disarmed, intermediated digital interactive businesses like gaming others, um, where the, the consumer is in the moment. Uh, and you can, uh, you don't have the overhang of of, um, Ai and other products. And then we're also looking at areas where, um, you can find AI applications to sectors that we need.

Know. Well, and with the growth of agentic AI you you can see AI strategies in a host of um, sectors that, that we have, uh, spent time in previously at IAC or others of us in our careers and, you know, we won't get too specific, but our, uh, trying to get to reasonable values on those opportunities. We have not wrestled, the right 1 into the boat yet, but continue to work hard and focus.

And then as I as I said before, hopefully the uh the macro environment will allow for uh more price Discovery. And and uh you know, agreement between buyers and sellers

Great. Thank you, Eric.

Operator. Next question.

Again, the council Corey Carpenter with JP Morgan.

Is there any further color? You could provide on the pause and share purchases in 2q after the disclosure not in April, thanks.

Yeah, AI overviews. Uh, I think we said last quarter, they were on about 35% of our searches, uh, as expected that has rapidly expanded. Its probably on more than half of the searches where our content appears, uh,

Some.

Properties less some properties more, but probably around 50 55%. Um, again, we, we we've run through the math that definitely depresses CTR. But it's the reason why we're doing everything we're doing, and it's the reason why we're investing behind Our Brands is the reason why we are doing things like the People app and my recipes. And some more things you're going to see from us to connect directly to our audiences and directly to our advertisers and uh you know, in spite of this we we we're we're holding sessions steady. We're growing them a little bit. So um but yeah there's look, we don't again, we set up a we we run this business,

As if Google from search is going to go to zero. Now it's obviously not going to go to zero, but that is the discipline with which we are approaching our investment, uh, and how we see the future media landscape and where audiences are going to come from. And, and again, it

Part of being in media for as long as we've been in it is it is a constant state of change and this is just another state of change. And we have been dealing with Google and Google changes and Google disruptions for a long time. And this is nothing new. Perhaps the remedy is a bit different but it feels it all feels very familiar to us.

1 comment and a go to buy back just a second but 1 comment, I'd add um, we've seen research.

That estimates the step down in, um, click through. There was a Pew report of others, the our observation relative to the, to the decline and kick down, click down those reports very much overstate, the decline for a premium publisher, um, like people Inc because there's a whole swath of of searches that have been zero, click for years, um, that never, uh, led to referral traffic from Google. And are not, you know, haven't been sources of traffic for people link, and our properties for years. So, I think some of those, um, you really need to do those studies right normalize, for what was searches, which is why. When we talk about searches that are Germaine, for, uh, people link what are searches, that produced Google, SEO traffic historically, and then what's the change in that? There is a step down, but not nearly as big as we're seeing. Yeah, just

It's almost like you have to look at it as it's, it's like the marginal step down. Yeah, that's that's the, the, the key element there. Um, and again, you know, Google search is, is 28% of our traffic. So it's 55% of, uh, 28%. And then the step down, uh, there. So, um, uh, you know, manageable, um,

Uh, in terms of pause share, we purchases, you know, we tried to Signal some of this last quarter, we announced that we'd completed 200 million in BuyBacks. We said

we were going to focus on m&a opportunities. Uh while continuing to look at our stock price, we definitely see value in our stock and and you know, know we have the opportunity to buy it and take advantage of that of that embedded discount. We are actively exploring opportunities to deploy capital and create compelling returns for shareholders. That way. Um, I know, you know, our our time Horizon may be longer than some shareholders will want, but we we uh believe we've got um, uh, opportunity to to do both at the same time and we will continue to analyze both

And, uh, we, you know, um, definitely as, as we are together, uh, with our chairman, uh, Barry Diller. And, and our leadership team. We are contemplating both, um,

On an active basis.

Thank you. Thanks. Uh, operator next question.

Thank you. And that comes from Stephen, Drew with UBS.

Okay, great. Thank you. Um, I think, uh, your slide 9 talking about care was pretty striking because um, I think you're trailing 12 month, revenue is 36060 million, and that's material, that's not even 1% of the addressable Market that you're calling out of 375 billion. So you know the The Optimist in me wants to think that given the white space ahead of you, uh, you should be going much faster. So you know what what factors are under your control and what needs to happen at the industry level you know what needs to happen from a consumer perspective and what needs to happen from uh an Enterprise perspective. Uh thank you

Thank you, Stephen.

You hit on it. It is obviously a massive Market that care.com participates in, um, has in front of us, addressable Market. Uh, and when you think about the needs of families for care, uh, both in home and out of home across children seniors, adult care, uh, and pets.

It's a it's a national challenge.

That, uh, it is something that um, the the households themselves struggle with and uh, there's a theme of what we call the sandwich generation that sits between an Ever burgeoning number of seniors who require care as well as their own children.

And that is a 2-prong and then and then certainly in certain cases uh their pets as well. That is a demand. It's an ever-increasing um drain on the financial resources as well as the the mental energies of families to to find and maintain care and it is a Tailwind.

For care.com to fully take away, take advantage of that Tam. They need to continue to grow demand of care, Seekers and supply of caregivers on each side of the marketplace, and then get better and better at matching. Uh, those 2 parties and making transactions easier to execute in the platforms. What does that mean in practice? First is Drive, consumers from using

Offline methods to find care and turn to our platform first.

To do that. That is very much, you know, front and center. And what we're doing of improving the product experience to make it easier. There's a, there's a big element of care of repeat visits. Particularly for those who fulfill jobs the first time, the easier you make it the, the smoother, the experience, the higher, the quality of the match, the more likely people are to come back and repeat. Either for another child caregiver, if there's a turnover there or to solve their senior or pet needs, uh, after a good experience on child or vice versa,

the second and this is, this is a key step is bring to Market, New pricing, and packaging that meets consumer needs where they are in the journey when you have the diversity of offerings,

Child senior pet daycare in home, care e, backup care, Etc. You need uh different offerings on a price. Point on a subscription versus transactional Etc. To meet the specific needs of a consumer coming to the platform. We've said this before but we have 1.6 million, non-registered monthly visits, and Care is uh, only monetizing a small percentage of them or only serving truly a small percentage of them. That means a lot of people are showing up and not seeing the entry point or the offering that is optimal for them. That's the opportunity of the business. It's also been the

Biggest challenge, but Brad Wilson and team are focused on creating entree to the platform, uh, limited time, use smaller entry, um, as well as, uh, upsell value packages. Um, as people become more familiar with the product and and uh, can can use it going forward, things like, background checks, Etc to offer, greater flexibility and easier entry and access. And then, finally, I talked about this earlier, we've got to continue to expand our vertical footprint outside of child care, which is our predominant category today, Senior Care is a burgeoning Marketplace and this next Generation, uh, will you will be much more comfortable using digital to line up the caregivers for their, for their parents. And then Pet Care is a massive area, spend. We have liquidity there. Uh, it's really around putting and and we've improved the product. It's really around uh, making the investment there, to to drive growth. So in some cares never lacked for growth opportunities.

The hurdles been our product and marketing. We feel good about where we're going. It's going to be you know uh continue to make progress every day and build the business.

Thank you, Stephen, thank you. Uh, operator. Next question.

Thank you that customer Jason hollstein with auburn Heimer.

Hey, thanks for taking the questions. 2 quick, 1, Neil, how are you thinking about long-term, Revenue growth for people? And I guess how do you get there from the 9%? We're doing today. Just, if you could kind of, you know, maybe bridge bridge, it to the aspirational goal. And then second any thoughts on expanding licensing, Revenue Beyond open AI as it relates to, you know, other llm companies who I'm sure are using your content. Thank you.

Our Oro. Properties, we've talked about where monetization continues to get better as well as all the growth. We have off platform and in advance and all the other things we're doing. So 10% remains our Northstar goal, which we feel pretty comfortable with in the long term. Uh in terms of Licensing Revenue. Uh it is something. We are obviously very interested in. I think there's 2 things going on uh in in the market to to to make more licensing deals happen. Uh sort of 1 of these 2 things is going to have to happen and they're not necessarily mutually exclusive 1, you're going to have to see uh a a change in tenor. Change in approach from the llm uh creators uh and 2. Uh, we're going to have to manufacture some more leverage for ourselves and you've seen that in what we've done uh, with cloudflare where we're now blocking. Uh almost all AI crawlers other than open AI where we have a deal and uh Google where we can't lock them because they use 1 crawler for search and AI which is, which is a different discussion.

But what we've seen uh in the last few weeks and again, nothing is imminent. But we have seen some of the larger players uh approach us and come back to sort of reignite. Some discussions around how these things would work. There's lots of different ideas and lots of different economic models. We are very, very active here. Uh, you've obviously heard uh, Mr. Diller, and me and Chris and pretty much all of us talked consistently about what we believe and we believe that

If people are going to train, use, and display our content, we need to be properly compensated for that. Hopefully, we're heading in that direction, but we will see.

Just can you clarify? Um, the 10% for people is that total or digital? I was asking digital, but if you want to give both, that's that, that's that's yeah, 10% for digital. And um, you know, I think we've said, uh, print will continue to secularly decline. Uh, the good news is as they weighted average percent of our total revenue base. It continues to decline we've we've driven low single digit total revenue growth. The last few quarters, I think that should continue as we drive, you know, 10% plus digital. We said with print it's printable offset our corporate expenses and we, we, we very much manage that business for cash flow and for The Branding marketing value of having, uh, print in the, in the world, which is, which is fairly material

Yeah, thanks.

Thank you. Jason operator. Next question.

Yes. Thanks. That comes from James hearney with uh Jeffries.

Great, thanks guys. Um, search Revenue came in just a little bit later than expected. Can you just talk about, uh, when we should see stability in that business? Uh, how much of that is an intentional pullback versus more Market related weakness. Thank you.

Yeah, on on search you know we we manage that business for margin and there are a number of different revenue streams uh that we are operating in at any given time and within the the broader Google search ecosystem as well as search on. On other platforms, there are different Trends different competitive Dynamics. You know, you can see in our, uh, Q2 print. Despite coming in below our Revenue guidance. We came in above our adjusted ebook guidance and we raised the midpoint of our full year adjusted e, but that that's a reflection of, um, identifying some higher margin channels that we were able to pursue in the quarter and uh, again, we're coming back to to, to to gross, essentially, gross profit on our on the search, um, activities and advertisers, we're driving and then running that against our our um, Opex. I'd say it's been a multi-year decline in search

That's been pronounced on the top line. And and that has flown through to to ebita over the last few years. We are we are seeing stability. Um, you know, it's been second derivative positive uh over the last few quarters.

It, the market is hopefully, finding some some level, but again, the Google search ecosystem is always volatile. Uh, We've we'll feel good about it. You know, at 1 point and then it'll, it'll switch. Again, that's the nature of of what we're doing with. We do feel good about our ability to, to maintain margin and profitability there. Um, and on our guidance for adjusted IBA,

thank you James. Yeah, go ahead.

Nope, thank you. That's all

Okay. Uh, thank you operator. Next question. Thank you. And that comes from Dan carnos with the Benchmark company.

Think about the cipher Plus.

Maybe a good time to kind of refresh how you're thinking about the tan since you alluded to new potential markets, like CTV and kind of how it fits in this decreasing signal loss, but increasingly self selecting environment, especially if agentic browsing picks up and then um, Chris kind of to your point on AI industry reports. I mean, a lot of the recent data actually suggests that traffic can uh click through quality has been improving for certain brands, so maybe just more of a question for you guys on where you sit on the data and analytics side. If you're kind of in a good position to track this Evolution, even as you guys prepare. Uh you know, in case things get worse from a Google perspective. Thanks.

So I'll do, uh, I'll do D+ and then Chris can pick up after that. So uh, we're really pleased with the cipher plus uh, Jim Lawson, who we who is experienced executive, we brought in to run and he's doing an excellent job scaling. I think we've said this before and we believe it, it's going to be a, it should be a material contributor, uh, into 26 numbers and right now quarter over quarter. Uh, the numbers albeit small, they they look really good. And, uh, what we're seeing is again for for those less versed in the story, what Cypher plus does it allows us to use our first party. Uh, intent based, contextual data, uh, understanding the relationship between our content, use that to Target ads on other sites off platform. So we can go and, uh, understand that inventory by it and essentially resell it to, uh, our our pool of advertisers, uh, this

Obviously, uh, greatly expands our total TAM. We did some work, uh, since our last call together because a bunch of you guys have been asking for this. We think it's 4 to 5 times, uh, the existing market size we have on platform, and that doesn't actually include CTV. CTV is very interesting because we found a way to manage to, uh,

We've combined our, uh, signal with the identifiers needed on a household level to target CTV. We've actually run a few of these deals, uh, they seem to be working really well. It's too early to make a call, but we feel very, uh, good about the CTV opportunity. Uh, you said it, CTV targeting, for many reasons we don't need to get into today, is fraud. It doesn't really work that well; it's a little bit messy. This is a very clean way for us to use our data to target CTV. And if we can add it, that just that TAM number is going to get bigger. I think this is really important.

Strategy for us to decipher plus. Uh, because it it's very much in line with what we do. We we are extremely good at getting people to our owned assets, be them websites. The events, the apps be my recipes things. The platform places and we've always had this data product that we use to Target our own ads. What this is, is a great unlock to take what we think is the best first-party data.

Potentially in media, if it is real intent-driven, textual data can be used to target the open web. If this performs the way we anticipate, we're very excited about the future.

um, thank you and and uh you know, on the then when you talk about click-through

There's we have, we have been running our searches. This is the data we've been reporting about frequency. Um, there's it's less clean on traffic that comes via attribution within an AI overview versus a, uh, consumer, just skipping the AI overview and going down to the SEO links. Um, what we'd say is

It is, it is, in many ways, a just a continuation of the cluttering of the search page that's been going on for a number of years, um, with uh, you know, greater sem, um, sort of thrusting.

Reddit directly into the top of the the search results and viewing their YouTube e-commerce. Um, we we agree with you that the step down in click-through is, uh, we I said it before. Not nowhere is dramatic as these reports are citing, it is something. Um but it it it feels like more of a a uh page knock.

Rather than or page fill up rather than a uh, significant change in the search Behavior. I would say and I'll turn it back to Neil in a sec but I would say there is a

Um what we tend to do and and the core of our, or the the the the foundation of our core Brands is much more in-depth premium content where the that you want to go to the actual reference page source and learn more. And so, again, as we've said before the decline in our click-through, uh, may just be fundamentally less than other Publishers that have been heavily. We've been we've been out of the commodity content business. Essentially, for some time this is not a new phenomenon. Remember Google was doing things like answer boxes. That was that was not knocking some of the stuff out years and years ago and again I just go back to the math that Chris shared earlier, right? It's the Google search and course, 28% of traffic. Uh,

Overviews to keep the math easy called on 50%, it's a little bit more than 50% but 50%. Um, and then we we we lose depending on the search somewhere from a very little to, to 202%. Um, but that's basically the Baseline is is lower than that. Um,

Uh, we're, we're, it's very well boxed, and the sort of content we're making is moving away from what is being disintermediated, is the point.

Got it. Thanks guys. I appreciate it.

Operator. Next question. Thank you. That comes from Matt condom with citizens.

Thank you so much for taking my questions. My first 1 is just on the court, aside for product. Do you still believe that there's an opportunity to improve yields in your onl properties? Just do algorithmic improvements or whatnot. And then my second 1, just on care.com understood the Enterprise segments who happen to be more difficult comp there, but still declined 7% quarter over quarter, can you, please talk about Trends, you're seeing on the Enterprise side of that business. Thank you.

Yeah. Um, the answer to that is yes the the the yield opportunity is still there. The smarter we get about our audiences and the smarter we get about targeting the better. Just I forget uh on platform. Um, the more we're going to be able to do also um

the value as, as we've increased, the value of Our Brands and the value of our contents and, and the value of our content, uh, I think we're seeing, uh, in the ability to increase value on on onos was the first question and Chris, it was the

Oh look, Chris has a second question here. Okay. Yeah, I mean the um, on Enterprise uh I think that 7% of your referencing is a sequential decline quarter of a quarter. We There are elements of seasonality, um, when you think about uh, you know, flu season or sickness in the winter produces more um usage of backup days and then it's similarly goes up in the in the

It tends to go up in the summer a lot when uh kids are out of school, those types of things. And then again, in many ways on a sequential basis Q2 is our um lightest Revenue quarter. Um any given quarter, there are uh different elements. You you basically have a subscription and a utilization element in that business. Uh the utilization you'll have Peaks and valleys depending on um where uh different employers are uh and and the pace at which

They're, uh, Bank of backup days, get used. Um, so, you know, long term, the, the sectoral Tailwind of backup care and, uh, access to, to platforms like care. We view is increasingly a table Stakes, uh, employee benefit. Um, but there will be some ups and downs quarter to quarter.

Okay. Uh, thank you. Um, operator 1. Last question.

thank you, and that comes from your gallery and with City,

Hey, good morning, guys. Um, hey, just one follow-up on care and one on, uh...

As 25% shareholders and kind of, like, you could expand on that strategy. A little bit, thanks. Uh, I'll do the, the people question first. Uh, know, the, for for the purposes of these numbers. The the, the, the brands I was talking to in that are sort of the brands that aren't part of the core. So that's it. Any, anything is fully baked and fairly. Uh, it's going to be in a steady state where it is, where it is. Now, is more of a way to explain to people that are the which you guys have known for a long time. Our our biggest invest brands are carrying the water around here and they're getting all the investment. Um,

The second question is, uh, is Jai or whatever going to require more investment, I think.

We are at a point now where I think we've made some really smart Investments. I think they're going to pay back in, measured in quarters, not years. That is Chris said. I think we're going to follow the margin profile Kriss outlined earlier if that's the question I think we've been doing this a long time and we're very good at investing behind success. Not ahead of success. We've never been uh, uh, in in invest ahead of success person. We're going to see if these things are working and we're going to invest. So I feel very comfortable with the margins, Chris outlined and I don't, I don't think there's going to be any outsized investment. Uh, going forward, that would affect that.

Yeah, and um, just a couple things, I'd add on that, you know, core sessions are now, generate 90% of total. So uh, we're sort of in that path to uh, non-core becoming less, and less relevant. Um,

The, uh, in that vein and the only thing I'd say is relative to the Investments that we made, in Q2 the spend associated. With those are baked into the guidance we've done in Q3, uh, as well as our full year guidance. So we have ramped up that investment. Uh, that's a little bit. Why the top end of the range came down? Also uh the other as I said before there's you know 3 million plus of incremental health care costs, due to uh high high cost claims that have flowed through. And we are we are booking in the second half. We will look to uh optimize that going forward. Um on MGM

We are, uh, you know, we own 24%, we are big supporters of the, the management team Bill hornbuckle. Jonathan halkyard and others and also, uh, of the BET MGM management team in the, in the joint venture there of, uh, Adam and and Gary, and others, um, we have, you know, humbly sought to provide our perspectives, uh,

Through Barry Diller and our former CEO, Joe Levin, who was on, who's on the board on ways to to drive Revenue, uh, optimize performance and, and along with the chairman Paul Salem and other board members, uh, make betmgm a successful as possible. We had a, uh, a former joint employee of IE and, uh, MGM who, uh, Gary Fritz, who's gone into MGM full-time, and leads their digital and strategy efforts. And, uh, we feel great about his contributions and are thrilled. He's working so closely with Bill. So we are um, active board members, uh, but uh, really support the management team in in their strategy.

um,

thank you. Uh,

any other questions operators? I think that's it.

Yes. I I would like to return the floor at this time to uh Chris hopper for any closing comments.

Thank you. Thank you to all for, uh, for being on and the questions and uh, have a great day.

Thank you. The conference has all concluded.

Thank you for attending today's presentation. May now disconnect your lines.

Goodbye.