IAC InterActive Corp. (IAC) Q3 2022 Earnings Report, Transcript and Summary

Good morning, everyone, and welcome to the IAC and Angi Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Christopher Halpin, Executive Vice President and CFO of IAC. Sir, please go ahead.

Thank you. Good morning, everyone. Christopher Halpin here, and welcome to the IAC and Angi Inc. third quarter earnings call. Joining me today is Joey Levin, CEO of IAC and CEO and Chairman of Angi Inc. Similar to last quarter, supplemental to our quarterly earnings releases, IAC has also published its quarterly shareholder letter. We will not be reading the shareholder letter on this call, and it is currently available on the Investor Relations section of IAC's website. I will shortly turn the call over to Joey to make a few brief introductory remarks, and then we will open it up to Q&A. Before we get to that, I'd like to remind you that during this presentation, we may discuss our outlook and future performance. These forward-looking statements typically may be preceded by words such as we expect, we believe, we anticipate or similar statements. These forward-looking views are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in IAC's and Angi Inc.'s third quarter press releases and our respective filings with the SEC. We'll also discuss certain non-GAAP measures, which as a reminder, include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during the call. I'll also refer you to our press releases, the IAC shareholder letter and, again, to the Investor Relations section of our websites for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. With that, I will hand it over to Joey.

Thanks, Chris. Welcome, everybody, and welcome back to our simplified earnings call format. As Chris said, I am very pleased to be here in two different capacities: CEO of IAC and now, CEO of Angi. I'm running Angi right now because given the performance of the business, we all agreed it was time to make a change. I love the opportunity for this business, and I want to make sure we nail it. I've only been in the seat 30 days, so I'll have more to share in February, but the big strategic vision has not changed. We're here to bring homeowners and service professionals together. We're here to make that process more consistent, more reliable and less hassle. That means we will continue to offer a mix of advertising, leads and services, but some things will change. And the thesis, the theme around change is simplicity and balance. The exposure and presence of services in the organization is going to be more balanced. I think we've overcomplicated the product, not just in services, but I think we've overcomplicated the product a bit. And I think we need to simplify both for homeowners and for service professionals. And I think we're also going to be more disciplined on expenses. Our OpEx growth the last few years has outpaced our gross profit growth, and only part of that is marketing related to the rebrand. I think we can get back to a much better balance there. We also have a lot of talent in this organization. And I think everyone is ready to be energized and uplifted and focused on delighting the customer. I've spent time in New York. I've spent time in Denver. I've spent time in Indianapolis. And I've met a lot of people who are really excited about delighting the customer, and I think we have a tremendous opportunity to do that better than we've done in the past. As far as the rest of IAC, we have work to do at Dotdash Meredith, but nothing we've seen yet has undercut the fundamental thesis. And I know you all have a lot of questions, so let's get to them. I just will ask your forgiveness in advance if I won't be able to answer all your Angi questions right now as I work into the details of the business and nail down the concrete plan. If I can't answer it now, I will have an answer by February when we're together again. Mark, let's start with the first question.

Okay. Thank you. Operator, let's go to the questions.

[Operator Instructions] And our first question today comes from Eric Sheridan from Goldman Sachs. Please go ahead with your question.

Thanks so much for taking the questions, and I hope everyone on the team is well. Joey, I want to come back to your sort of comments there to kick off the call. I think with the changes in Angi, I wanted to maybe hone in on two issues. Number one, why do you and the Board think you're the right person to run that business at this point in time, considering you're already running IAC on a day-to-day basis? So maybe going a little bit deeper on the decision process there and why you feel you're the right person to take over that challenge at this point in time, number one. And then number two, as you referenced, there's a lot of ambition and a lot of market opportunity at Angi. And as you said in the letter, we've been through a lot of CEOs over the last half decade. How should we be thinking about your broader business philosophy? Is Angi going to be run for growth? Is it going to be run for a balance of growth and profits? How should we be thinking about you striking the right balance there to amplify returns when measured against the market opportunity? Thanks so much.

Thanks, Eric. In terms of why me, and I guess I can weave in the answer to your second question in that. First, I've been involved in this business in one way or another for a very long time. I know the things we've done have worked. I know the things we've done that haven't worked. And so I have, I'd say, a significant working knowledge of the category, the product, the customers. Second, some of the fundamental things that we need to accomplish at Angi are very consistent with things we've accomplished at other businesses, how to handle search, how to handle monetization, things to optimize for in conversion. And I think that experience is going to be very relevant to Angi here that would be to other Internet businesses. Third, I believe in this business. I think it's important to have a leader who believes in the business. And I have believed in this business for a very long time, and I know that we can create enormous value here. We also have to move quickly. I think that we've made some recent mistake that we need to fix. And I don't want to say I'm the CEO of convenience, but I did happen to be available very quickly to do this. And I think that, that allows us to make the change that we want to make faster than a longer process. And the last thing is, and this gets to your second question, is I think the organization needs to be more disciplined. And disciplined means balancing the short term and the long term. Any leader, I think, can optimize for the short term. And any leader, I think, can optimize for the long term. I think the right manager, the best managers and the right operating philosophy is to be balancing the short term and the long term. I think we have to deliver for 2023, and I think we have to deliver more profit for 2023, and I think we're totally capable of doing that. But I also think we have to focus on the long term and make sure that what we're doing for our customers, our homeowners and our service professionals is something that's going to keep them around working with us for a very long time, and we have to balance those things. I think that is totally possible to do. I think we perhaps drifted from some of that balance in short and long term. I think we drifted in some of that balance from profit and growth. And I think that we can run this business in a much more balanced way, which will be healthy for everybody in that Angi ecosystem.

Great. Thanks Joey.

Thank you, Eric.

Our next question comes from John Blackledge from Cowen. Please go ahead with your question.

Great. Thanks. Two questions. First on Dotdash Meredith's Digital revenue. Could you just discuss the ad trends in 3Q that led to the ad declines, particularly around brand versus performance and also key verticals? And then what did you see in October that lead you to believe that Digital revenue could be flat in the first half and then turning positive in the back half of the year? And then just second question on the EBITDA, if you can unpack the new guide of $240 million to $250 million kind of bridges from the $300 million. Is it all revenue shortfall? And then thanks for the color on the '23 rev trajectory. Just any thoughts on EBITDA in '23 perhaps framing and EBITDA margin range would be helpful? Thank you.

Thanks, John. It's Chris. So we and spent, real time in the letter trying to frame this out, which I'll refer to as we go through it. There are two dynamics to Dotdash Meredith digital revenue that are just key overhangs on our performance this year. And that ties both to third quarter trends, what we're seeing now and where we are on Dotdash EBITDA to your second question. The first is the integration and those specifically that migration of the Meredith digital properties to the Dotdash platform. And then the second is macro and overall ad market. I'll take those one at a time. On the migration, we said in the last quarter. We were we were overly aggressive on our expected timing of the migrations - as a reminder, to those who are newer to the story. This is the acquired properties. Meredith was about two-thirds of the size of Dotdash, in a serial fashion, moving those properties over to the Dotdash platform. And that means much faster site speeds, reduced ad inventory, and eliminating old content and producing better content. And we'll go - I'm sure into more depth on this call. Those delays, pushed us from an expected completion, say around the 4th of July of all the sites to - of all the major sites to where we are now, which was we completed the migrations, by the end of September, early October. Two things happen. One, because the sites were not migrated, we could not drive the traffic increases we expect from migrated sites as early and capture as much of that in this year as we expected. The second is we were not able to run as we call it the Dotdash playbook and integrate performance marketing and e-commerce into the Meredith sites. And all - the additional revenue sources that we expect to drive that was one overhang from migration challenges. The second is, our expectation was that the early migrations would be very comparable to the later migrations, in terms of complexity, ad serving et cetera. That's true with historical performance, unfortunately, and this has been - a challenging journey through the summer, thankfully, heavily behind us. But it was, we found that with some of the larger related sites, there were idiosyncrasies to ad serving to surfing activities that lead to underperformance and we had to make tweaks. In the case of our lifestyle sites, we saw, you know, we needed to constantly update the ad performance at the ad serving performance, which we're now on the other side of and for example, in food and recipes, we've continued to need to optimize our ad load relative to pricing uplift, those are just things that happen when you move a lot of properties. And Dotdash Meredith management is - feels very good that where we are in early November, with 90 plus percent of the sites and all of the big sites migrated. Those challenges are behind us. But those were definitely drags on q3 performance. Additionally, we just had some sort of break and fixes on ad serving on e-commerce integrations. And those were drags, as you'll see in the Q, on performance marketing in the quarter. The market overhang, we talked about this previously, May, June, July, we saw rapid decline in ad demand from retail CPG and home as well as some smaller subcategories. That continued through the summer, but we actually saw a couple categories, including retail come back and back-to-school. And while they're not back to last year levels, we've seen strength. Unfortunately, we've seen other categories beauty, tech, telco really soften year-over-year. So it's a choppy ad market. So what we'd say broadly as your question on brand versus performance, there's not a lot of brand in the Dotdash portfolio there was some in Meredith. But all - everything about the playbook is moving our pitch to advertisers and our reporting to performance. But the ad market is choppy we'd expect brands to be weak next year. And it will only - the current market will only accelerate per performance and ROI and clarity. But we don't have a significant brand portion in our portfolio. In terms of the EBITDA decline, it is all driven relative to the $300 million we were initially put out after the first quarter it's all driven by digital revenue declines. Print is solid, expenses are in good shape, and corporate expenses are in a good spot post combination. The margins, the incremental margins on digital revenue, we've always said are very high, as well as on e-commerce, et cetera. We expected to have the migrations go more smoothly than we did, especially over Q3. And we expected a more solid ad market, not a great ad market, but a more solid ad market in this quarter. And, we've now accepting a choppy one through the rest of the year. So that is - that is the dynamics, when we look forward to '23. We talked in the letter, October, traffic volumes are down about 5%. A big chunk of that is just going back to go forward on the big sites we've recently migrated. We expect to continue to improve that we also expect to take share on the ad sales side. We said we'd love to get back to flat in the first part of the first half of '23. And just more specific to our own opportunities grow for the entire year. In terms of numbers, we're in the midst of business planning, and we'll be coming back to you on the next earnings call with greater clarity on our plan for the '23 financial year. Thank you.

Thank you.

And our next question comes from Cory Carpenter from JPMorgan. Please go ahead with your question.

Thanks for the questions. Joey wanted to ask for an update on what you're seeing in the macro environment across the portfolio, maybe both on the consumer and the enterprise side, and how this informs your outlook into the holiday season. And then secondly, on Angi, just hoping you could give us an update on where you're at - with a roofing turnaround, and how this could impact growth for the rest of the year? Thank you.

Sure, mostly what we can see is the consumers still spending. I mean the clearest things that you see in travel, which I think has been well covered. We see Turo and MGM doing phenomenally well. As we're that's direct spending, but also where we see in Dotdash Meredith consumer spending through e-commerce performance marketing type stuff is that they're still spending on good. Now some of that spend has shifted from certain kinds of goods to other kinds of goods, but still spending. I mean, people aren't opening crypto accounts anymore so that that kind of thing is come back. But the general spending is still happening as far as we can see really, everywhere. On the consumer side, there's, some things in Angi that make it a little bit harder to read in terms of how we're adjusting our marketing demand. I would say that the demand has lightened at Angi generally, but again, there's a bunch of noise in that both when looking at comparable, sort of exceptionally high comparables in the prior year, and specific changes we're making around our marketing. So, it's an imperfect picture, but I'd say still reasonably strong on the on the consumer side. On the enterprise side, you heard Chris said on advertising. And what we've talked about generally on advertising, we think spending certainly people are pausing right now. There is when there's uncertainty in ad markets, people hold their spend. That is I think that once whether we settle into a high market or a low market, I expect spending to come back on advertising, but it's the uncertainty piece that I think is driving a pullback in ad spend. And we can see that across other of our businesses too. On Care, it is interesting, in that we're seeing utilization go up on the consumer side for sorry, as it relates to our enterprise business in Care. We're seeing utilization among employees go up which is a good thing for our business. And that should long term be a good thing for enterprises, because the enterprises will realize that the consumers really or their employees really liked this product. And so hopefully that should translate to growing enterprise strength in terms of new sales. But that is, I'd say, in agreeable we can see from our picture. Your second question was Angi growth and Angi roofing. We went from in Angi roofing just sort of fixing some fundamentals to a - literal hurricane came through and hit - all of our main offices actually in Florida. That's actually I mean, that's a terrible thing in general. It's a reasonably good thing for roofing in the sense that we happen to have a lot of people and a lot of capabilities to deal with roofs that were damaged by the hurricane in that area. So we saw a huge surge in demand that of course tapers and then we have to work on fulfilling that. We're still working through some of our fulfillment issues there, making sure we've nailed down materials, making sure we've nailed down labor. We've scaled up labor meaningfully. And now we need to make sure we can put all that together and deliver on fulfillment. I think that is net, a good thing for that business. And how we execute that I think we need to prove over the next couple of quarters. But having a significant increase in demand over a short period of time is for sure, a good thing for that business for now. I don't think it's a material change to Angi overall or the business overall. But just as it relates to this moment in time, I think - the hurricane hitting where it did for that business was a positive.

And Cory one thing I'd added for the group on roofing. Relative to the timing of the storm at the end of the month of September, essentially, you know, the patterns were the last 10 days or so very little activity in the roofing, in terms of actual installation or orders as people A) managed their own safety, but B) held off doing any activities until they understood what the roof would look like after the storm. And then following that two week period where, you know, there were much bigger priorities then in those markets than organizing a roof reconstruction, just baseline health and safety activities going on. So the from a revenue perspective of the hurricane would be a headwind in both September and October, there's now a very large backlog that Joey spoke about, and that will be worked out through the next say, four plus months. And it's really just around fulfillment, and staffing.

I think that - Cory I think that covered all your questions.

Yes, thank you both. Thank you.

Great, next question, please.

And our next question comes from Brent Thill from Jefferies. Please go ahead with your question.

Hi, good morning, guys. This is David on for Brent, thanks for taking the questions. Two, if I may, for the first question. Could you maybe just talk a little bit about the sale of Bluecrew to EmployBridge, maybe any color you can provide on the cash receipt and the equity you have of the combined company on that would be helpful? And then second, I want to - ask on capital allocation. Do you guys have any updates on how you guys are thinking about assets in the public market versus maybe the private markets? And maybe we saw that you guys bought some MGM and bought back some stock during the quarter any color and how you kind of thought about pairing the two would be helpful? Thanks guys.

Sure, it's Chris. I'll start on Bluecrew and then hand to Joey on capital allocation. We have sold the business into EmployBridge, which is the industry leader in light staffing proceeds were about $50 million in cash and then equity in the pro forma company, where we are a minority shareholder with a Board seat. We're very excited about the combination of combining EmployBridge's scale with Bluecrew's technology software and client base. And then also we were investing heavily in that business as we disclosed in the letter had an EBITDA loss of $26 million on an LTM basis, which you can pro forma out following closing. With that I will hand it over Joey.

Yes, well I'll just add that I think that Bluecrew/EmployBridge combination is a really interesting one, and it'll be it'll be fun to see that should vision executed on a bigger scale. Capital allocation, we are always, as you know, looking at what to do with our cash and evaluating external opportunities against the internal opportunities, the landscape of things we consider hasn't changed. So we prioritize our internal businesses both through the P&L and through tack on M&A where we think we have a significant advantage. And then we look externally. And of course, we look at share repurchases, and there's a big surface area for share repurchases for us right now, in the sense of there's IAC, there's Angi, there's MGM to some expense. And there's Turo to some extent, all these things are things that we evaluate very regularly. And we'll continue to evaluate regularly. We're not going to make a prediction right now or a proclamation right now on which ones will buy and when or whether, but we'll just tell you that we continue to evaluate that very regularly. And that's a very important part of our capital allocation process. I think generally speaking in public markets, are pretty attractive right now. I think that you can buy things - that have risk where you can get a significant reward for taking that risk. And I think that's pretty interesting. I think the private markets are still not there yet. And they've always lagged. And they'll continue to lag. And eventually there will be an adjustment. You probably don't want to be a private company who needs capital right now. But if you are a private company who doesn't need capital, that's a lovely place to be right now, because you get to make up your valuation. And nobody else gets to do that right now. But - if there's, opportunities I think they're more likely public, but who knows? We'll continue to look at both. And that's kind of how we've always been and we'll continue to be on capital allocation. Thanks, David. Let's do next question.

Our next question comes from Ross Sandler from Barclays. Please go ahead with your question.

Hi, guys, just a couple of follow ups on Dotdash Meredith, so on the growth rates for next year, how much is baked in terms of the digital ad market, industry growth into your forecast? So if the ad market continues to tank, how much sensitivity do we have around that forecast? And if we look at the Meredith properties, it seems like most folio will be kind of in that 10% traffic growth zone, based on that chart and in the letter. And I know you're shifting some of the ad sales from - programmatic to premium and performance, as you mentioned, so could use bridge like traffic to revenue and kind of what kind of monetization you're baking in to that forecast? Thanks a lot.

Yes, sure Ross. Thank you. In terms of growth rates and tying the industry, we said in the letter that we expect to get back to flat in the first half and then growing for the full year without improvement in the ad market. And that confidence and - this ties to your second question, as well of the linkage between traffic and revenue. That confidence ties to some specific factors to Dotdash Meredith, the integration and where we are. One is that, the migration was a challenging journey. But we are predominantly on the other side of it heavily on the other side of it, and feel like the drags that occur the integration related drags that occurred on volumes on ads serving et cetera will lead to easier comps year-over-year. The second is that we expect to grow sessions on the migrated sites now that we can run the Dotdash playbook, which at the end of the day, audience times price is the revenue model on the advertising side. So we expect consumption and audience to increase as we push these sites forward, and they perform better with faster sites, fewer ads and improve content. The third is that Neon team view just core opportunities to like-to-like improve CPMs across the portfolio, as we move the Meredith sites onto the platform and in have better ad serving technology, have better pricing models, et cetera and just certain conventions that we can impose. And then finally, is e-commerce and performance marketing, where the Meredith sites have trailed. I think - the Neon team, have been dying to get their hands on those Meredith properties and brand names to do the Dotdash performance marketing playbook and we can go from there. Overall, we are we're not saying we're on the ad market, especially in the first half of the year. And so, we're focused on our knitting, improving our sales, driving the consumption increases. And we're really in that fine tuning mode of content ad serving e-commerce on the Meredith sites. I think that's it. Thanks Ross, operator next question.

Our next question comes from Jason Helfstein from Oppenheimer. Please go ahead with your question.

Thanks, everybody. Joey, can you just talk about the shortfall, the last call at 12 months or 18 months at services versus leads? And what have you learned that gives you confidence in the current strategy, as opposed to kind of making us another pivot? Thanks.

Sure, Jason, I guess the services we mentioned in the letter, we've done $1 billion in services revenue, that is a tremendous amount of revenue to do in this category is not a lot of service professionals have gotten to that sort of for volume. We did that across a lot of tasks. And we did that across a lot of geographies. What we learned in that process was there's some areas and types of tasks that we think can do very well. And there's some that are harder to complete. What we also learned in that is that there's, customer experiences that work out really well for customers, and some that work out less well. And we are now taking that learning and honing down to what we think is a great consumer experience. That consumer experience melds when done perfectly melds very well with the ads and leads experience. Meaning a homeowner comes in, a homeowner makes a choice, a homeowner understands, the choice clearly between one path and the other and get the job done on the way they want to get a job done. I talked about for a very long time, the fact that consumers in this category can be very different and can have very different needs. There's a consumer who says, I just want you to do all the work, Angi, and there's a consumer who says I want to do all the work myself, because I don't trust anybody else to do it. And when I say do the work, I don't mean lay down the tiles I mean, find the person who's going to do the work and negotiate with them and figure out price and decide how to evaluate whether they're capable or not. We have those consumers and those consumers are very passionate about which one of those paths they want to pursue. And I think that we now having served a lot of services can do a better job honing, which customer should go down which path and help them make that decision. That's probably the biggest learning. And that's also likely to be the biggest change in terms of how we present those opportunities to homeowners and how we present those opportunities to pros. I think, I guess embedded also in your question is how what's the outlook for both of those businesses? Both of those businesses have substantial upside relative to where we are, it is possible that in services, we readjust what we're doing there in a way to start from a different area to grow again. And we're working through that as it relates to our 2023 plan. But we are I believe both of those businesses have are very good businesses can very much serve homeowners and service professionals and can grow substantially from where they are over time. Does that answer your question, Jason? So there, I'm going to assume yes, we'll go to the next one.

Our next question comes from Dan Kurnos from The Benchmark Company. Please go ahead with your question.

Great, thanks good morning Joey, if I could just stick with more structural I mean I think we've gotten enough data now to suggest that in general, monetizable queries and actions across network sites are just way down. So forgetting the macro for a second, I know you said you don't think there's anything structurally wrong at DDM, which obviously, you know we've generally agreed with, but there has clearly been a shift in recent times to retail media. And I'm just wondering how you're kind of viewing sort of intermediaries versus direct to what's becoming increasingly digitally native organic traffic as it impacts DDM? And then on Angi, you kind of just answered this question, but I mean for what it's worth, local even saying that home improvement is up like mid-teens as a category right now. So just structurally how you're thinking of growing ads and leads as a share of a pie which seems to be one of the few bright spots in - a rather messy macro backdrop? Thanks.

I'm not sure I understood the first question, but I'm going to try, which is I think that the digital media properties had an absolute torrent of traffic or just floods of traffic in 2020, 2021, and that has abated. I think that was the first question, but I'm not positive. Is that so...

I can - I'll rephrase it this way, Joey. So like I think there's kind of a view out there that digitally native brands, Amazon, everyone, they're kind of taking share just through organic direct traffic rather than consumers utilizing intermediary sites. And I'm not obviously implying that Dotdash really has more of the network bucket, but just trying to understand how you think structurally about that shift?

Yes, so I don't - we don't see that, and I think we see the exact opposite of that, which is, number one, that consumers are looking for intermediaries to help make these decisions and those intermediaries are adding value. And that's validated by the behavior we're seeing on the people who want the end result of that traffic, meaning the folks who are paying for our e-commerce traffic or performance marketing traffic. And increasingly eager to engage with that audience as we're helping them make decisions and define intent. So that is not a trend that - I mean, obviously, you worry about Amazon in any capacity and the big tech giants have lots of leverage to pull in all kinds of areas. But generally, we think that we're in a good place there, relative to homeowners and the partners on the other side. I just forgot the second question.

The performance in the overall home segment?

Yes, sorry okay. Ads and leads is a, I believe, a very good business and a very long-term business. I think that, number one, it's generally - we've talked about this before, it's reasonably hedged in this market in the sense that as demand comes down, interest among service professionals for our product goes up that's a good thing. That's probably the opposite of the services business, which is in an excessive demand environment. The services business is a very important solution. And so, those things are somewhat opposite. But I love the ads and leads business and the services business and believe both have significant growth from here. Was there something more specific in the question?

Sorry, Joe, I think I could probably follow-up. It was really more just around market share given real strength in kind of local and some other channels we're hearing - home improvement?

Yes, got it. Okay yes. Look, that one is, I think we've got work to do on share, and that's something I'm very focused on making sure that we fix.

Yes - and I think that Dan, it speaks to Joey's comment about the need to focus more beyond services where there are attractive market opportunities available to Angi in ads and leads, and that can be driven through real focus and prioritization given what we see in the broader market.

Got it, that's very helpful, thanks guys.

Thanks, next question.

Our next question comes from Justin Patterson from KeyBanc. Please go ahead with your question.

Great, thank you very much and good morning. Sticking with just the Angi business, could you talk about the confidence level in terms of fixing traffic acquisition? This hasn't been the first time, but there's been, challenges with that. I realize it's now one brand in there, but talk about just some of the levers you have to improve that over the coming quarters and how we should think about that time line? Thank you.

Yes, this is an area where I have a lot of confidence. And you're right, Justin, we've made some mistakes on here in the past. I think that the mistakes have been actually kind of similar. So in the case going back a while where we combined Angie's List and HomeAdvisor, a lot of stuff changing traffic in that and mapped some things that weren't happening underneath the surface. I think that the rebrand was a similar story, which is we did the rebrand. That was a massive shift in traffic and brand exposure, and that a lot of small things got consumed in the story of the big thing. And I'm really focused on the small things, which is what matter in generating traffic. And I think if we execute against the small things, we ought to deliver significantly in traffic. The reason I believe that is I've seen us do it in other places, and this now has very, very high priority in the organization. If you talk to anybody who's interacted with me at Angi over the last few weeks, they will tell you that same thing back, which is we are focused on fixing this and we are doing all the things necessary in the organization to make sure that we are getting the traffic back. We have - the things that win in traffic long-term, it's having - obviously, having the best content and having the best experience. We've seen this over and over again in search engines. Sometimes they get it wrong for a while. Hopefully, long-term, they get it right and we can we can deliver getting it right. The things that matter for getting it right in this category are we have full listings of service professionals. We have ratings and reviews on service professionals. We have closed-loop reviews. We know whether a service professional and a homeowner actually worked together and whether they met and so we can use that as an extra verifying step. We have cost guide. We actually know what was paid in many cases directly. And that cost data is really important. And the last thing is we allow the consumer to take the action - on our site, which means that combination of things combined with the reliable and trusted brands, ought to be winning in search, but we've given up ground there. And we've given up ground because we've held some of those things back. We've given up ground because we haven't totally focused on the fundamentals. We've given up ground, because I think sometimes we've focused on some shiny objects that we didn't need to. This is very much blocking and tackling. We have a great new leader here who's focused on execution. We've started to pick a few examples just to prove out the thesis, and we've proven that out with a tiny handful of examples. Now we just need to scale it and systematize the scaling of that, which is something that we know how to do. And that we will get done and I'd be very surprised and disappointed if we can't fix that over time. The other thing that's a factor, and sorry to go on here, but I'm passionate about this topic and I think we have a lot of opportunity here, is we've let conversion decline in some areas, too. I think a good business doesn't let conversion decline really in any area over time. Everything we should be doing should be driving up conversion over time. And there should be themes and disciplines focused on driving up conversion. I've been, as I've gotten into some of the details, I've seen some declines in conversion that I didn't really expect to see. And I believe that most of what I've seen is fixable with focus. And when you get those things going up, then again, all the other channels start to flow through. So again, sorry for the long-winded, but I feel very good about our opportunities there. Thank you, next question.

Great, thank you.

Our next question comes from [Logan Wright] from RBC. Please go ahead with your question. Mr. Wright is it possible your phone is on mute.

Let's go to the next one come back to Logan.

Our next question comes from Tom Champion from Piper Sandler. Please go ahead with your question.

Thanks good morning. Joey, the letter highlights the sum of the parts. And it seems like, clearly, there's a disconnect with the assets in totality and where the stock is trading. What do you think is the primary source of the, disconnect and what kind of addresses that ultimately? And maybe one more. If you could just update us a little bit on Vivian and some of the investments made since the capital raise? Thank you.

Sure. I think the primary source of the, disconnect is execution. And then the other source of the disconnect is as is the case in any sum of the parts, what people are focused on is the ability to access the parts, and there's probably a perceived time or gap between now and ability to access the parts. That's something I've talked about a lot, that doesn't really worry me and everything that we have. We maintain that optionality that option has value. The value of that option doesn't really decline. And so, we don't feel real pressure to exercise those options. But the thing that we have done in realizing value on those things over time is we have certainly demonstrated an ability and willingness to exercise those options in tax-efficient ways. Right now, that's not a high priority focus for us. The focus for us is execution against all of our businesses. And then those options will become available or more exercisable over time. And that usually shrinks the discount. The discount is, as you know, something that I've talked about a lot and that I find interesting and an opportunity. And the bigger the discount is, the more exciting the opportunity is there. Second question was Vivian capital raise.

Vivian before, Vivian activities, what we've been doing, performance?

Vivian is doing great. I mean there are two things going very well for Vivian. One, it's in a tremendous market, which is that healthcare market and healthcare labor is a significant supply-demand imbalance, and we are serving that. And I think we're serving that very well. We are also delivering a, I'll say, bespoke product for the category, meaning most of the platforms that have most of the share are delivering generic products that cover lots of categories. What Vivian is doing very well is nailing a category specifically, and this has started as travel nurses and it's going broader to more healthcare. But the thing that it accomplishes is it serves the jobseeker with exactly the data that they need in that category, and it serves the employer with exactly the data that they need in that category. And being in that position is, as I say, a good place to be in a market where there's, a lot of employers looking for workers there.

And the only thing I'd add relative to the sum of the parts and the stub or non-public value pieces, Dotdash is a major element of value there. It has been a disruptive year through the migration as well as the advertising downdraft. We really tried to provide insight and color on the performance and dynamics there and bifurcate what is integration merger-related versus macro, and we will look to continue to do that. But we also believe across Care, Vivian, Turo and elsewhere, there are tremendous value sources in the IAC family that the market is not recognizing.

Thanks, we will take one more question.

Yes, operator one last question/

And our final question today comes from Youssef Squali from SunTrust. Please go ahead with your question.

Great, thank you. That's Truist not SunTrust. So a couple of questions maybe Joey, can you maybe just contextualize where you are with Dotdash Meredith relative to your initial expectations, both operationally and obviously, the $450 million segment EBITDA for next year is now off the table. But how far are you behind your initial expectations? And then in the letter on Angi, I think you talked about your intention of being more balanced. I'm assuming that means between services and ads and leads. Practically, what does that mean? Are we just talking about the marketing spend and conversion that you've talked about in addressing a question that was asked earlier or is there something else beyond just the go-to-market strategy with marketing? Thank you.

Sure. I'll do them in reverse order. The balance of services versus ads and leads actually runs all throughout the organization. So first, just how we expose the various products to consumers and when we expose the various products to consumers that will change and be more balanced. Second is how it exists inside the organization. Right now or historically, I'd say, decisions were made to prioritize services in all kinds of organizational decisions, and that will be more balanced. The - organization was operated in a way that was, I would say, services first. And I'd say, going forward, it's services is very important, and services is a great service for homeowners, but it will be services, ads and leads and it will be homeowner first in terms of how to think about our operations and how to think about the customer experience. The second question was Dotdash Meredith and how far behind we are. I think realistically, we're probably one to 1.5 maybe years behind schedule. I think there's one, the delays that we've talked about extensively in the integration that was probably in aggregate a six-month delay. And then I think that the ad market on top of that has certainly not helped. And I think just generally being delayed in the integration led to exposure of more issues that needed to be addressed. So, I think in aggregate has put us on maybe that - roughly that time line. Again, not -- I really don't think there's a single thing that we've seen yet that says the fundamental thesis is flawed. But the surrounding environment is a tough one, and that's made all this slower and harder for us and self-inflicted wounds over the last six months have added to that, too.

Thanks, Joey.

Thanks Youssef. Well, thank you all for joining us this quarter. And look forward to talking to you next quarter when, hopefully, we'll have a lot more to share.

And ladies and gentlemen, that will conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.