Welcome to the IAC and Angi Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Christopher Halpin, Executive Vice President, CFO and COO of IAC. Please go ahead, sir.

Thank you, operator. Good morning, everyone, Christopher Halpin here, and welcome to the IAC and Angi Inc. Third Quarter Earnings Call. Joining me today are Joey Levin, CEO of IAC and Chairman of Angi Inc.; and Jeff Kip, CEO of Angi Inc. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter, which is currently available on the Investor Relations section of IAC's website. We will not be reading the shareholder letter on this call. I will turn the call over to Joey to make a few brief introductory remarks, and we'll then open it up. Before 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 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 annual -- most recent quarterly report on Form 10-Q and our most recent annual report on Form 10-K and in the subsequent reports that we file with the SEC. The information provided on this conference call should be considered in light of such risks. We'll 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. I'll also refer you to our earnings releases, the IAC shareholder letter, our public filings with the SEC and, again, to the Investor Relations section of our respective websites for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. And now I'll turn it over to Joey.

Thanks, Chris. Obviously, the big news today is that we are contemplating a spin of Angi, which if we complete it would be the first spin out of IAC in 4 years, and obviously join a very long line of spin-offs out of this company. Besides creating 2 separate focused companies, this move would allow Angi to stand on its own, have a more liquid currency and a stand-alone ambitious strategy, whether that's M&A or capital allocation generally. But key to making this possible is the fact that profits and cash flow in the business have improved meaningfully. Consumer experience has improved meaningfully, and jobs done well has become a true driving obsession of everybody in the business. And Jeff and I believe strongly the business has revenue growth, again, in its future and profitability will be stable from here. So we're in a position to do this, a strong position to do this, and grateful for the opportunity to have another spin-off out of IAC. I'm sure we'll have a lot of questions on all of this and IAC's generally, which we think was very good this quarter. And people worked hard, we're very proud of the work everybody did this quarter. And so let's get to the questions to talk about it.

Operator, first question please.

Our first question will come from Cory Carpenter with JPMorgan.

Joey, could you expand on why now on exploring the Angi spin? And then second question related to that, which you just mentioned, what's giving you the confidence in Angi returning to revenue growth? And is there any impact you're expecting next year from the FCC's 101 content rule?

Yes. I'll take the first one, and I'll let Jeff do the second, but I can weigh in there. The answer to why now is, as we've said through many spins we've done in the past, it's not a particular formula or a specific kind of automatic trigger on these things. It's a confluence of things. And one is the business being spun and the other is the impact on what's left behind. And in the case of Angi, the business being spun, the key is, is it stand-alone, strong and healthy and capable of being on its own in the public markets. And business is now comfortably profitable, comfortably generating cash flow. And we think on the right path strategically. It has all the pieces it needs to really deliver for the consumer, and there's a lot of execution ahead in terms of product, but there's also a lot of execution behind it in terms of product and seeing that come through on things like retention and customer satisfaction. So we like the path that Angi right now and like Jeff's ability to execute against that. There also is benefits to a more liquid currency. There's more direct investor access. There is the ability to use that liquid currency, whether it's for M&A or compensation. I think being spun off and standalone, those things can help. And of course, this is also a tax-efficient concept in the sense that the spin, if we do it, would be tax-free. And the other piece is that it allows IAC to focus. We've really been on a campaign of slimming down, focusing, and we think that, that can allow us to do fewer things better. And that's what we plan to do with IAC.

Yes. In terms of our confidence in the stability and future growth of the business, I'm going to start by going back 2 years to when Joey took over the business with tremendous opportunity to improve at the time. Joey and the team committed to improving the quality of the business, the customer experience and returning the business to profitable growth. We've moved a fair amount of lower quality traffic off the ship. We removed some of our lower-quality third-party traffic, and we moved a significant portion of the business to consumer choice, which I'll come back to in a minute. The result has been that our jobs done well rate has grown about 30% in the last year. Pro retention has risen materially each quarter, and we've referenced that. Homeowner NPS year-over-year is up by almost 60% in this last quarter. So those are big markers and a tribute to what's been accomplished to drive the long-term experience and growth of the business. We've also taken our unit economics apart and put them back together. We've rightsized our sales effort to drive long-term ROI, and we've reengineered our paid marketing to drive material profit growth despite revenue declines. You can see it in the near 30% paid channel profit growth in the last quarter. We delivered profit growth in 2023 despite revenue declines. We're doing so again this year, and we'll hold our profit again next year, as Joey referenced, as we make the next major investment in our customer experience by moving really the vast majority of our traffic that comes through our core customer journey to consumer choice. Yes, I'll come back to this in a minute. We've really been progressively moving our business towards consumer choice because we believe it's the best way to drive the…

Thank you. Operator, next question.

Next question will come from Jason Helfstein with Oppenheimer.

Just one question, then a housekeeping question. So just to elaborate on that, I guess, for Joey and Jeff. I mean many of us have covered Angi HomeAdvisor for a long time, there's always been this big promise of a TAM you talked about it in the letter. And it's historically been hard to unlock, whether it's just word-of-mouth, Google, social media. Fully appreciate the improvement in efficiency in the business that you've been able to do. But I guess, why should investors get excited now that you finally figured out how to kind of really unlock the growth that has been elusive for kind of 15 years, basically, in this vertical? And then a follow-up, just remind us the basis of the MGM stock and what's the tax treatment if you were to potentially sell that stake?

Thanks, Jason. Chris will take the second one. But the first one is the fundamental difference right now, which hopefully you've been hearing for a while, and we see and have shared a lot of the underlying metrics of this, is an absolute obsession with customer experience. The folks have succeeded at disintermediating Google, which is obviously a very tall order, or going after things like word of mouth are the ones who have absolute customer obsession in an jobs done well. And I think that change in our mantra is what's going to drive both pro retention that changes the economics of the business and allows us to reinvest in compelling ways. And homeowner repeat rate, homeowner satisfaction which allows us to reinvest in compelling ways. That is the difference, and that we're doing on a brand that is entirely dedicated to home services. That doesn't really exist in the market and that, I think, just sides with us. And I think throughout the past, there has been probably an overemphasis on more shorter-term results and less on the longer-term investment of an obsessive customer experience. And that's what we've put in place. That's what we continue to put in place. And if we do continue to do that, I think that we can build a compelling direct brand with homeowners that goes after those other portions of the market that you mentioned. You want to add to that, Jeff?

No, I completely agree.

And then, Jason, on the MGM stake, we currently hold 64.7 million shares of MGM. Our basis is just below $1.3 billion. IAC has net operating losses in excess of $1 billion. It was $1.4 billion as of end of last year. We'll probably use -- well, we know we'll use some this year to offset profits. But at current trading levels of about $1.1 billion gain, we've got more than enough NOLs to offset. So we think about it, and you can see it in the sum of the parts as the market value of the shares is the appropriate way to think about our holdings because we can offset any taxable gain right now. Thank you. Operator, next quesion.

Next question will come from John Blackledge with TD Cowen.

On DDM Digital revenue, can you talk about the drivers of the overall revenue outperformance, notably ad revenue accelerating at a faster pace than expected, while performance marketing and licensing were a bit lower? And then for 4Q, can you unpack the mid- to high-single-digit revenue guide relative to our -- we had kind of like low double-digit revenue growth in 4Q? And then as we look into 2025, just any color there on DDM Digital top line growth?

Sure, John. Thank you. third quarter digital performance was excellent across both traffic and monetization. Digital Advertising revenues grew 26%, led by 14% growth in core sessions. And we're happy to see overall sessions were positive for the quarter for the first time in a while. Traffic growth was particularly strong in our entertainment, food properties, and we continue to see momentum there. Digital -- or sorry, direct ad sales were strong as well, perhaps even aided a little bit by advertisers pulling some spend forward into September ahead of the election. And then programmatic was superb, with rates up 30% plus in the quarter. Performance Marketing disappointing, at down 7%, with continued weakness in financial services, such as insurance and brokerage. That segment has improved this quarter, and we expect growth in the fourth quarter across Performance Marketing broadly. And then licensing continues to be solid, driven by both our OpenAI partnership in Apple News, up 17% in the quarter. So overall, it added up to 16% digital revenue growth. Our best quarter since acquired Meredith. And we were also happy with how that flowed down to adjusted EBITDA. We would highlight aggregate adjusted EBITDA only grew slightly in the third quarter, but that growth rate is dragged down by an $8 million favorable tax release related to the Meredith acquisition that benefited our corporate expense a year ago. Digital EBITDA grew 28% this past quarter, and incremental margins were 42%. When you look at fourth quarter, October month was softer on both advertising spend and traffic than we expected, resulting in Digital revenues were only up 7% in October for the month. We knew there'd be some challenges with the election, but consumer distraction and advertiser caution exceeded our expectations. We'd note for those who are newer to the story, that Dotdash Meredith does not sell digital inventory on its titles to political advertisers. So there's no benefit from the election and just headwinds for the properties. Good news, DDM was -- the election was rapidly decided and things are shaping up to come in during November and December with advertisers steadily returning. We know Thanksgiving is a week later, so things are tighter in the overall holiday shopping period. DDM is pushing hard across its properties to drag both advertising and performance marketing, but we thought it prudent to guide fourth quarter Digital revenue to the mid- to high single digits at this point. Now looking to 2025 and beyond, we are still confident in 10% Digital revenue growth as the baseline for the DDM business. That will be, as we've said before, driven roughly half by traffic growth and half by improved monetization. And I'm sure we'll talk about the D/Cipher, which is key advantage tool for us in monetization. Individual quarters may bounce around above and below that 10% target, but we still have confidence in that as the long-term driver of the business. Thanks, John. Operator, next question.

The next question will come from Eric Sheridan with Goldman Sachs.

Two, if I could. First, with the decision to break out Care as a reported segment, I want to know if you could hit the refresh on where that business and how you're thinking about the market opportunity set ahead for Care in the years to come. And then secondarily, Joey, there were sort of some cross currents in the letter, the depressed valuation of IAC ex NG and MGM, but you also talked about the M&A environment being challenging from a valuation standpoint. Any reset or refreshed view on capital allocation broadly against what you see as the opportunity set?

Thanks, Eric. So on Care, we've been thinking about this for a while and certainly with -- or especially with an Angi spin, if that happens, breaking out Care as its own segment makes a lot of sense. It's a scale business, $365 million of revenue and $45 million of adjusted EBITDA over the last 12 months. I think, by far, category leader in terms of online digital marketplace. Bigger in terms of brand, bigger in terms of audience, bigger in terms of providers and families, but in order of magnitude relative to any competitor that we're aware of. And so that is the basis of, I think, a lot of potential in the business. When we look at the opportunity, just to put some numbers around it, near term or even longer term, the site receives 7,000 to 10,000 job posts a day and 70,000 to 100,000 applications a day, and we're only converting a very small fraction of that into paying customers. And what that tells you is we have the liquidity, both on the supply side and on the demand side, and I think you have the potential. And our new CEO has been there about a year, Brad Wilson, who's been very focused on this. We have the potential to improve the product and customer experience, especially using tools like AI and machine learning to get those matches better -- to use conversational UI to get better information out of both the family and the caregiver to make those matches better. And if we can do that, we think we can drive conversion and also do a better job optimizing pricing and packaging there. The other thing that's been a nice tailwind for the business. I think COVID was some volatility in the business. It might…

Thanks, Eric. Operator, next question.

The next question will come from Ross Sandler with Barclays.

Great. Back to DDM. Guys, on D/Cipher, there's a bunch of new information in the letter about how that's driving some improvement. Could you just talk about how the approach has changed with OpenAI now powering some of the number crunching at D/Cipher and how quickly you can roll that out to all your advertisers? And then more broadly, as we look out over the next, like, 5 years, how can you take this technology to off DDM inventory? And how big of an opportunity might that be?

Yes. It's a really important question. I'll start, and then I'll turn it to Chris. But I'd say that the approach has changed with respect to D/Cipher. I'd say what we add to D/Cipher with the OpenAI integration is the ability, as you referenced to, start to address the off-DDM inventory. So we've, for a little while now, have had DDM's inventory mapped nicely to outperform generally the market on intent given the nature of DDM's inventory and the data we have, the unique inventory and the unique data that we have surrounding that. And driven performance that's driven outsized growth in CPMs and some of the stats we talked about, about how D/Cipher advertisers perform relative to non-D/Cipher advertisers. What what the OpenAI integration did was take that same mapping that we have inside of DDM and map that to, I think, something like 30 million more URLs or somewhere in that neighborhood. And so now the ability, whether through partnership or we can just buy some of that inventory, to upsell that inventory to advertisers to increase the size of their buy with us and to deliver better scale packages, and that's something that we think we can deliver in 2025. And we expect to be a driver of growth unbound by the size DDM's existing inventory. Do you want to add to that?

Yes. No, I think the only additional element there when you think about third-party properties, you've got the demand and the supply side. Right now, of DDM's existing inventory, D/Cipher can address 100% of our supply. We significantly increased the supply through the capabilities that OpenAI has brought to the product to score and then we can now transact across that those incremental 30 million websites that are in categories similar to DDM. So the effect of supply that we can D/Cipher-ize will only increase. On demand side, and Joey talked about this in the letter, right now, in terms of how our advertisers and agencies buy, only about half of the $640 million of Digital Advertising revenue is going through demand channels that were D/Cipher as addressable. So as of right now, we -- demand that comes through essentially forward contracted orders from advertisers and agencies, D/Cipher can be utilized right now, about half the revenue is coming from D/Cipher inclusive campaigns and about half non-D/Cipher-inclusive campaigns. We said in the letter, the former, where D/Cipher is an element, are growing 25%; and the latter, growing about 5%. So you can see the growth driver that D/Cipher is. But that's only on about half of our Digital Advertising demand. The other half are either direct programmatic orders essentially to Dotdash Meredith or programmatic -- fully programmatic orders across open ordering. The road map for D/Cipher is to make this offer applicable to those channels and really increase the addressable portion of the demand. So it's all in the road map, and OpenAI was a key step. And we continue to grow the supply side and then we also think we'll continue to grow the addressable demand side through product investment and development. Thank you, Ross. Operator, next question.

The next question will come from Dan Kurnos with The Benchmark Company.

Chris, can I just follow up on that? Are you fully -- as fully distributed as you want to be within the ad tech ecosystem? And do you need to make any incremental investment? We obviously know it was a pretty heavy lift to get Meredith up to Dotdash standards. But are there -- is there any more lift you need to do in order to achieve kind of full to cyber coverage on programmatic? And then, Joey, obviously, we've been here forever on this. You used the word, I guess -- well, the word de-conglomeration. Is that a long-term philosophical change for you in terms of M&A companies in the portfolio, time to spin, increased focus? And what does it mean for things like stakes in Turo and MGM?

Sure. No, it's not -- Dan, it's a good question. It's not a long-term change. We've always been de-conglomerating and re-conglomerating. I think right now, we're focused on -- we want to focus on fewer things, simplifying and executing strongly against those things. And that's our near-term priority. It is possible in the future that we add new legs to IAC, but for the moment, we are focused on slimming and executing. But we have a large cash balance, obviously. We have the, I think, wherewithal to do other things, and we're going to remain curious and remain interested in other things that are possibilities for IAC that are either already in the portfolio or could be new things. So that really hasn't changed. But I'd say short term, certainly with the step of Angi, it is more slimming than expanding.

Dan, thanks. On the DDM question, break it down into a couple of elements. Post -- as you mentioned, post combination of Meredith on to the Dotdash platform, we feel excellent about our state -- the state of our programmatic stack and programmatic nations broadly. So the ability for us to transact with the inventory that we don't sell directly and get excellent monetization there. We feel great about the state of our ad tech stack and optimizing price and survey, frequency, et cetera, and that Neil and his team have done a tremendous job building that out. The 2 continuing efforts, which we've talked about in the past, one is continuing to have D/Cipher integrate into demand-side platforms. We've talked about the Amazon platform previously and chipping away at others. The key step there is for them to accept non-cookie-based targeting and ad buying within their DSE. So for some, it can be natural or a relatively easily executable step. Others everything they're doing is cookie-based, so it requires them to look at their algorithms differently. But we're chipping away on that and allows D/Cipher to go more broadly. The second is further integrating ourselves directly into the workflows of agencies and then the large advertisers that transact directly through themselves. And for us, that's a focus on developing the managed service capability that DDM can offer, where D/Cipher is increasingly productized and programmatic-like on a direct basis. So we talked about some ad tech acquisitions may help in that last case. All of them are part of the D/Cipher road map and a core focus of DDM management. And the company is, heads down, executing to make D/Cipher addressable to even more of the ad market. Thank you. Operator, next question.

The next question will come from Tom Champion with Piper Sandler.

Maybe for Jeff, I was wondering if you could elaborate a little bit on the comments in the letter on the Ads Pro product and the Leads Pro product unification. Is this a test? Did it already happen, maybe something you did in Europe? And then curious if you could talk to the relationship with the jobs done well metric, any connection there? Or would this amplify that trend?

Sure. So right now, the Ads and Leads business exists as 2 different products, but also on 2 different platforms. Fundamentally, it's the same transaction that happens. Pro pays us several hundred dollars for a bundle of leads or contacts with homeowners. So at the end of the day, the sort of business deal isn't that different. But operating it in 2 formats with some inconsistencies and setup on different technical platforms isn't -- was alluded to sort of the way you do it if you're building it from scratch. So we've set out to get on to a single platform so that we can market consistently and run the business consistently, and sell one product to our customers rather than multiple products through multiple sales forces. We have been running a test to understand the efficacy of selling the single product. It is performing better than the leads, almost as well as the ads, and we see a path to ending up on the same product. The same product will be a pro paying several hundred dollars for a bundled leads. So we would expect this to be disruptive commercially or disruptive from the customer experience or, frankly, to our customer base because it's fundamentally the same business deal. And we think that getting it on the same platform will improve our business a great deal. Again, selling one product for customers and marketing into one customer base. In terms of jobs done well, we think this will also enhance the business. Currently, the difference between our Ads and Leads product is it Ads effectively buys a bill of ZIP codes across a single category, whereas Leads are able to specify tasks within a category and specify ZIP codes. What that means is that the Leads product lends itself better to matching than the Ads product. And what we will effectively do is take the Ads product, which is a commitment product, and move it on to the Leads platform as a commitment product, but with the matching features which we think will actually materially enhance jobs done well for that piece of our customer base. So in short, we think we're going to drive commercial efficiency and effectiveness and jobs as well. And at the end of the day, I don't think you asked this, but just to cover it, we -- this is a migration of about the size we've already performed by -- 5 in Europe and are about to perform a sixth by moving the Canadian business to the European platform. So this is a core competency in Angi. And although these things are not simple or easy, this is about as close to BAU as it comes when it comes to doing one of these things.

Thank you, Tom. Operator, next question.

The next question will come from James Kenny with Jefferies.

Can we just get a little bit more detail on the comment that you made around reducing corporate costs post an Angi spin? And what specifically are some of those areas? And how much could we expect in terms of savings over the near, medium and long term?

Sure. I'll start, and Chris can add to this. But the -- we're not putting a number out on it, James. But the -- we'll look at all corporate costs. Everything is on the table in there to figure out what we need in a slimmer IAC that currently provide services for Angi. Some of those costs may go with Angi and some of those costs may go away. And we're -- everything in that context is on the table, and we're just beginning that exercise right now, making sure we preserve the ability to grow at IAC, but do that more efficiently and tightly.

Yes. It's an active analysis. Part of it is also looking at the corporate functions that Angi utilizes and understanding what would -- if the spin happens, what would the needs and level of infrastructure be for that area and those areas post spin. Also historically, when we have spun, some of our people go with the spun company to help build out the functions that don't exist at the spun vehicle as they've relied on corporate. So active analysis that we're going through, and we'll likely be coming back to you next quarter when we're setting out guidance for next year.

Great. And maybe just 1 quick follow-up on just the macro environment that you're seeing within Digital Advertising. Obviously, a very strong quarter in Q3, I'm just curious what you're seeing maybe by vertical or just generally in the macro landscape?

Yes. We talked about October already being a little bit light. But the -- as far as what we can see from the consumer, it seems reasonably healthy right now. When we look at MGM, when we look at Turo, when we look at basket sizes in the Commerce part of Dotdash Meredith, we don't see the consumer, at least consumer that we're generally interacting with, retreating in any meaningful way. It seems relatively stable. But for October, which we think was -- there was a lot of distractions in October.

And then specifically with respect to advertising categories at DDM, the slowdown in Advertising spend was pretty broad-based. We saw in the last couple of weeks of October, ahead of the election. Since then, we've seen categories like retail, technology and health come back solidly. Food and CPG had a strong September, but is coming back more slowly since the election. And then home and travel are both slow, but that's been due to secular slowdowns for a while. So -- and then one other, entertainment and media continues to be very weak as streaming is -- streamers are still broadly trying to find their way. So we expect a number of these to come back in the coming weeks as we ramp up into the holidays. And as we say, the Super Bowl for our food property is Thanksgiving and December, and the team is pushing along. Thanks, James. Operator, next question.

Next question will come from Youssef Squali with Truist.

So a couple of questions. First on the data licensing deal. Can you talk about the contributions of OpenAI to the core? And just generally, what does the pipeline look like, Jeff, with these types of deals? Once you do a deal with one big platform, typically, you do deals with a whole slew of others, we haven't heard of any yet. So maybe just provide some color on that. And then, Joey, on the Angi spin-off, why just float the idea as a potential event at this point? What are you hoping to gauge before you make a final decision, and potentially timing for that?

Sure. I'll start, and Chris can add in some detail on the licensing. Just in terms of what's happening broadly on licensing, the -- you've got a number of term sheets since the OpenAI deal. So there is activity in the market, but we haven't gotten to any others, or at least of any noteworthy scale, to level of transacting or announcing them. But there is active dialogue and different platforms have different perspectives on it. Some respect intellectual property and some aren't there yet and might need some assistance on getting there. And so we'll see how that evolves. But there is certainly a number of active dialogues along those lines. On the question of timing, that's both a tactical issue and a legal issue. When you start to consider you actually have to make a disclosure around that as an 85% shareholder. And that also allows us to start to explore details of that with everybody necessary in the ecosystem or all constituents in that ecosystem to clear out the details. I do think it is highly likely that we get to the conclusion that we will spin Angi, but there are some processes and boxes to check with all constituents to get that done.

Thanks, Joey. And Youssef, with respect to the OpenAI deal, if you look at -- there are 2 parts to that license, one is a fixed component, which we recognize ratably; and the other is a variable component, which will true up at future dates depending on metrics we have there. But right now, we're really representing the -- recognizing the fixed component. If you look at Q3 of '24, we were -- licensing revenue was up about $4.1 million year-over-year. The lion's share of that would be driven by the OpenAI license. So that's, on a quarterly basis, a good proxy for the revenue we're recognizing. And then the variable components will be calculated and recognized in the future. Thanks. Operator, next question.

Next question will come from Ygal Arounian with Citigroup.

Just to follow up on the last question around the licensing. You mentioned in the letter, AI overviews some up in about 20% of queries. Can you expand on that a little bit what you're seeing there trend-wise? What you expect -- how you expect that to play out over time? I know right now, you're not seeing much of an impact to traffic. Do you think that stays that way? And then, Joey, you just mentioned the term sheets -- but in the letter, you also talked about protecting your IP. Maybe can you just expand on that as well.

Sure. In terms of what we're seeing so far, when it's there, we see low mid-digit impact. Sometimes, actually, it's positive. Sometimes it's more than that. Sometimes it's less than that. It really depends by category and our content. But remember that only that entire thing it's rolled out on 20%, but also that's only a subset of our traffic. So when you put all that together, the impact to Dotdash Meredith is minimal. The -- we don't know how the UI evolves and we don't know how penetration evolves. I do penetration will continue to grow. And I expect that we'll continue to feature decently in that penetration because -- meaning in the AI overviews, because our content usually is, me as an unbiased observer, the best. We invest a lot in that content. We make sure that our content is accurate and well sourced. And therefore, it earns its space in AI overviews or elsewhere in terms of users digging deeper and getting into our content. So we think we're in a good place there. We think we are -- have been holding our ground and we do expect to continue to. But that market evolves quickly. And it's something we're keeping a close eye on. And that gets to your second question, which is if traffic -- if people are using our content but not sending us audience or compensating us in some other way, we are going to have to protect our intellectual property and -- to make sure that's the case. So far, that has not been the problem. But if that becomes a problem, we certainly will protect it.

Operator, one more question, please.

And the last question will come from Nick Jones with JMP Securities.

Jeff, on Angi, monetized transactions per service requests continue to improve, but we see kind of service professionals going lower, monetized transactions going lower, albeit slower than service requests. And how should we think about that metric going forward? As you kind of turn the corner for growth, let's say,in 2026, is that a metric that can be stable and continue to grow? Is there a gating factor we should be aware of as we think about kind of the algorithm for growth in this business? And then, Joey, on M&A, are there any learnings kind of from -- the last of valuations really kind of got ahead of everything. Kind of post-election, I think there's folks maybe speculating that the valuations may kind of run a lot higher. Does that kind of mean you're staring down maybe a multiyear period of really struggling to find any M&A? Or are there any learnings from kind of the last time that maybe make it different if that happens this time?

I'll start on the first question. So there's a few components to what you're talking about. Our monetized transactions per SR are going up as we better manage RSRs against the capacity in our system. With the inflection we expect in revenue growth in '26, we also expect monetized transactions to start growing again. The other piece you mentioned is the number of service pros. The fact is our existing base of service pros is effectively outperforming in growth what it used to, because our retention is going up. So if you normalize the acquisition over the last couple of years, you would actually see growth in the service pro base. But because we are taking down low profitability, service pro acquisition, you are seeing a decline. So as we get to -- I think you used the word floor, so I'll use it. As we get to a floor in terms of taking the lapse out of our traffic with moving to consumer choice and consent, and then getting to the right size in terms of our sales force and our acquisition approach with our pro marketing, we will effectively roll out in 2025 and grow again across all these metrics in 2026. So hopefully, I think that answers all the pieces of it, and also explains a little bit of why we see the growth, even though optically you're not seeing it on the face of our metrics.

I think on your other question, what's key in any environment -- I'm probably not telling anyone anything they don't know. But what's key in any environment, whether valuations are down or valuations are creeping up, is having an edge in the things that you're going after. And that's certainly what we have looked for and we'll continue to look for. If we go back to the last big acquisition, biggest acquisition, which was Meredith, while the timing was not ideal and we got some things wrong as it relates to the COVID benefit, that both our business and Meredith's business we're seeing at the time, what has turned out to be true was the strategic value of that transaction. And the only reason that, that has -- that we're doing okay in that transaction right now -- not what we originally hoped for, but the reason that we're doing okay in that transaction right now is because we were able to deliver that strategic operating execution different in that business with bringing in that what was a unmodernized digital business into the modern world, to the point where we could take -- start to take share as a publisher. So we had a meaningful macro headwind on that business, which we underappreciated the potential of that, but the strategic element was essential to the survival and what is now winning and taking share in that category as a digital publisher. So we'll continue to look for an edge. And when we find an edge, that is something that enters the realm of possible, and that's what we continue to look for.

Thank you, everyone. Thank you, operator. I wish everyone a good day, and thank you for your time.

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