Good day, and welcome to the ANGI Homeservices reports Q1 2020 results conference call. At this time, I would like to turn the conference over to Glenn Schiffman, Chief Financial Officer of IAC. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and hope you all are safe. Glenn Schiffman here, and welcome to the ANGI Homeservices First Quarter Earnings Call. Joining me today is Joey Levin, Chairman of ANGI Homeservices and CEO of IAC; and Brandon Ridenour, CEO of ANGI Homeservices. Joey and I will also address any questions you may have on IAC's first quarter results. 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. It is currently available on the Investor Relations section of our 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 call, 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 such 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 both IAC and ANGI Homeservices' first quarter press releases and our reports filed with the SEC. We'll also discuss certain non-GAAP measures, which as a reminder include adjusted EBITDA, which we will 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 website for all comparable GAAP measures and full reconciliations for all material non-GAAP measures. Now, let's jump right in. Joey?

Thanks, Glenn. Welcome, everybody. Glenn and I are sitting here in New York City, six feet apart. We've got Mr. Ridenour on video in Colorado, where we're exchanging hand signals to manage the call. But other than that, the earnings ritual is not much different. We always do this with everybody remote, and so hopefully that goes smoothly today. Normally, I'd like to thank our employees in the quarter when we're doing great work and getting good results. I actually want to thank a different group today, which is our employees who have the benefit right now of working from home, with only minor inconveniences. And the only reason we're all able to operate from the safety of our own homes is because there are a lot of people and a lot of other companies who are putting themselves in harm's way doing the work on the frontlines. And I just want to say that on behalf of all 9,000 IAC employees, we're incredibly grateful to that group of people for making what we do and a lot of other people do possible. Back to IAC, we’re really pleased with how the quarter turned out, given the overall environment. And we're cautiously optimistic about where things go from here. We have a meeting with the CEOs every Monday afternoon, which we've been doing since we started working from home and sheltering in place. It's really interesting to see the tone of the business evolve over that time. The first couple of weeks were a little bit of confusion; the next few weeks were a bit of disappointment; and then in the last two weeks, it seems like there is a lot of optimism among our businesses. It's tougher to be part of IAC right now, seeing the benefit of a multi-business company, and being able to communicate with each other on what's going on and how we're managing through changes in the business. It’s great to see how our leadership is handling that. So we've posted all the numbers; you've got all the numbers. You could see the results and our numbers now through April, and I'm sure that raises some questions, which I'll turn to the operator to get the first question, which we can now start answering. Thank you.

Thank you. We'll take our first question from John Blackledge with Cowen.

Thanks for the question. Hope everyone is doing all right. Broadly for Joey, Glenn, and Brandon, the April trending data across many of the businesses looks better than expected. Given the uncertainty around the pandemic, it would be really helpful if you could walk through kind of the puts and takes on the trajectories for each business as we head through Q2 and into the second half of 2020. Thank you.

Sure, John. Let’s maybe I’ll just look at what the table is we published in the letter and walk you through that. Match, I guess hopefully a lot of you heard the call yesterday with Shar and Gary, where I thought they did an excellent job talking about Match and what's happening and what the outlook looks like. You can see the business is still growing, and we expect that business to continue to grow. Some of the dynamics inside of Match are pretty interesting. We're seeing the female engagement on that platform grow nicely. Some of the trends you see in that business, kind of underlying the financial metrics are things that we've worked hard on with product over many years to get going. Certainly, no one would ever wish this pandemic on anybody, but one silver lining is that Match is seeing some of those metrics that can support the business and product experience start to move in the right direction, notwithstanding some changes in first-time subscribers and things like that. So we're optimistic about Match and the future there, although it won't likely be part of IAC much longer. At ANGI, it's been really interesting to watch. We saw demand come down in the second half of March and at the beginning of April. Then we've seen a lot of that demand come back since then. We don't know if that’s permanent. We don't know if a bunch of pent-up demand that didn’t come through, or jobs that didn’t come through in March and early April as people were sheltering in place, suddenly came through later in April and at the start of May. It’s possibly some of that and possibly that the weather improved at the same time as things were starting to feel a little better. But it could also be that as people are spending more time in their homes and spending less money on other things like vacations, and restaurants, and bars, that they’re putting that money into their homes. It’s possible that that demand comes into our platform in a really interesting way. It’s really hard to make predictions in this business right now. We think that within 43 days we had both a seasonally adjusted all-time high and a three-year low. When you get that kind of volatility in a business in a short period of time, it makes it hard to make any kind of predictions, but we're cautiously optimistic about ANGI right now. I feel we’ll spend some more time, and Brandon will spend some time going through some of the puts and takes around there. In Vimeo, we’ve had a great increase in demand for Vimeo; you saw that in the bookings numbers we shared. You can see that in the revenue acceleration through April. On one hand, it’s really nice to see those numbers coming through, but you worry—is this temporary? The reality is this is a trend that we’ve been expecting for a very long time. We didn’t expect it to come this quickly and this sharply, but this is a trend we’ve been expecting for some time, which is we’ve been advising every small business, every enterprise, and every entity to use video to communicate. That was when they still had a physical presence to communicate as well. Now that the physical presence is temporarily disabled for a lot of businesses, the video presence is the primary presence, and so you see a lot of adoption. Our hope is that as people adopt these tools and realize they are effective for communication that many of those stick and this trend continues even when physical presences return. You still have audiences that you may want to reach that aren’t physically in your geographic reach. I mean, video would be a natural extension of those things. So we’re hoping that that sticks, although I'm not sure it will stick at elevated levels we have right now, given the lack of physical presence for so many businesses. At Dotdash, we've been pleasantly surprised by how well Dotdash is holding up here. The traffic surge isn’t surprising. We’ve seen a big surge in traffic as more people are spending time on devices, but the advertising revenue has held up, particularly the performance revenue. We were talking internally, and I was talking with Neil Vogel as well about this, and he pointed out that many businesses are seeing traffic up 40% and our traffic is up in that same neighborhood. When I first heard the 40%, I was excited, but when I heard everybody else is up 40%, I thought maybe we’re not taking share. The difference is that our traffic is growing in areas with intent. The fundamental intuition of Dotdash is our traffic is about intent. Our audience is trying to get something very specific done on our properties. So our traffic consists of people trying to accomplish discrete goals like learning to cook new things or figuring out what to stock in the pantry. That has demonstrated a level of intent that advertisers want to reach in a moment like this, and you can see that even more in the performance marketing where advertising revenue is specifically related to actions taken and the advertiser pays only when specific actions occur. That’s doing really well right now. The last area I’ll touch on is Applications—the desktop revenue business is very disappointing for us; that continues to decline. I know the business is still profitable and I think it will continue to be profitable, but at a lower level than it has historically been. That was happening way before the pandemic, and the pandemic certainly didn’t help that business. Our mobile application business, which is Mosaic, is doing nicely; it’s holding up in revenue, and growth, and subscribers, and we hope and expect that will continue from here. So that’s a very long answer to your question, John, but hopefully helpful as you think about these businesses and the monthly trends.

And John, I’ll go into a little more detail to help you navigate through the year. Given the uncertainty, the dispersion of outcomes in financial performance is going to be pretty wide this year. So I caution everyone not to run rate the March or April performance. Obviously, we don’t know the length of the quarantine, consumer behavior thereafter, and we don’t know the depth of or the length of the recession that we expect to come in the back half of the year. But jumping into some details to help you, here are a couple of flashpoints. ANGI Homeservices saw demand down in April by 8% for service requests, and 11% for monetized transactions. We expect demand to be down all year, but we expect our ability to monetize that demand to be up. You saw a little bit of that in March; you saw a little bit of that in April where revenue per monetized transaction in the first quarter was up 17%. Where those lines cross—demand down and our ability to monetize that demand, where those lines cross will determine if we grow for the year. We have scenarios where we’re growing, and we have scenarios where we’re not growing in that business. As Brandon will discuss among certain things, we know in that business we’ll continue to innovate, and we think we’ll continue to take share. Regarding EBITDA for the business, we came into the year believing we’re going to create incremental margin, but that margin would be eaten up by $30 million to $50 million of discretionary investments we planned on making. We're still planning on and currently making those $30 million to $50 million discretionary investments; that’s in international and our fixed-price initiative. In all likelihood, given the revenue profile of the business this year, we won't create incremental margin; we will have decremental margin, and again, you need to layer on that $30 million to $50 million. In terms of Vimeo, there’s a lot of noise in the print here. Recall the first quarter of 2019, we sold the hardware business; that was included in the numbers, roughly $2.3 million of revenue in Q1 2019. And then in Q2 in May, we bought the Magisto business, so that’s in our numbers as well. The best way to look at Vimeo is if you strip out the acquisition and look at the true organic growth rate. There you see in some of our disclosures we say, subscribers excluding Magisto grew 10%, accelerating from 8% last quarter; average revenue per user grew 11%, also accelerating. That created 22% organic growth for the quarter. You may recall, I said 19% organic growth at the end of last quarter. In the press release, we showed 59% bookings growth, including Magisto; excluding Magisto, 41% organic bookings growth. Bookings revenue, of course, trails bookings by several quarters. We expect that organic growth rate to inch up but not grow dramatically. In terms of Dotdash, I would point you to that performance marketing revenue of 115%, which speaks to the diversity of the business. Again, a little like ANGI Homeservices, we think the performance-based marketing business, which includes eCommerce and other areas where we are paid for action, not for impressions, we think that’s going to grow all year. We think display will likely shrink all year. I think the 7% is going to get worse as we work through the backlog this quarter. Where those lines cross will determine if we grow this year. As Joey mentioned, we’re optimistic around Dotdash, but we’re still going to make investments in content to continue to capture share against the bigger brands in which we compete and against which we do well. For applications, we said last quarter likely, we’ll hit a low in the second quarter. We still believe that, but it will be a little lower than we expected, given some of the issues we’re working through in the desktop business. Mosaic, as Joey said, will be resilient. If you’re bored at home, if you're working at home, or doing homework at home, we have an app for that. These apps are doing well. The travel-related apps are doing less well, and then emerging and other—we saw step-up growth in February from the acquisition of Care, so you have a bunch of inorganic growth there. If you strip out Care, we shrank year-over-year in February, March, and April, and we’ll shrink year-over-year throughout the rest of the year. That’s kind of a trip around the horn, if you will. I would highlight the way I started this answer, which is uncertainty reigns here. But again, as we’ll talk about throughout this call, we’re certain we’ll keep innovating in every business, we have a flexible expense base, and we will continue to penetrate the large addressable markets in which we compete.

Thank you.

We’ll take our next question from Brad Erickson with Needham & Company.

Hi, guys. Thanks. Just a couple. One for ANGI: maybe just talk about what you're seeing ROI-wise at this stage in the performance marketing channels in particular and just kind of how you balance things between, I guess, a slight drop in demand relative to what I think has been a less competitive advertising environment. And then I have a follow-up.

Sure. This is Brandon. Thanks for the question. We have seen costs come down across, as you guys are all aware, just about every channel. And that's been to our benefit. I think we find ourselves in a very fortunate position as really the only marketplace at scale focused solely on home services. We have several thousand employees that wake up every single day with a singular focus, which is how do we improve the experience for homeowners and provide best-in-class tools for small businesses to reach those homeowners. We saw, as you can imagine, a stress test of our business models unlike anything that we would have ever wanted to see, but nevertheless got to see the results. As demand declined sharply in the back half of March, we observed a couple of things. One, obviously, directly to your question: we saw costs come down across nearly every marketing channel we employ to acquire both service providers and homeowners. Additionally, we saw the resiliency of our business model at Angie's List, which was only modestly affected. In HomeAdvisor and our marketplace segment more broadly, of course, we see immediate effects of lower transactions. However, we also saw dramatic engagement from service providers; those who already use our platform engaged more, but we also attracted and welcomed new service providers who are coming for the benefits of what we believe is the far and away the best ROI toolset to reach homeowners that exists today. April for us was an incredibly strong month from an SP sales standpoint. We brought on more SPs in April than we ever have in the history of the company while also seeing improvements in engagement from the SPs already part of our network. That held up to cushion the dramatic declines in demand substantially. From an overall ROI perspective, the landscape is certainly favorable at the moment, and we haven't really seen that change even though as you can see from our April results, we've seen a pretty strong recovery in overall consumer demand. We're still seeing relatively favorable dynamics from an ad rate standpoint.

Got it. That’s great. And then just any quick update on fixed price? Any milestones you can share? And just talk about any changes or maybe accelerated expansion on the rollout of that as a function of COVID. Thanks.

Yes. There are two things with fixed price: first, we are still investing as we said we would and are on pace that we plan to be on. Without a doubt, when you reduce the top of the funnel 40% or 50%, that’s going to have an impact. But that proved relatively temporary, and in April, we were back on track and saw the biggest weeks in the history of fixed price from a bookings and revenue perspective. So we’re very happy with the trajectory and growth we’re seeing there, which is in line or maybe a bit ahead of our expectations. I think perhaps more importantly: we have expanded into a number of different project categories where the projects are higher value and more complex. What we’ve been able to prove out with certainty is that there is demand from a consumer and homeowner standpoint and willingness to engage with and purchase these projects digitally. Obviously, that’s the starting point. You need to know that there’s a market for these things, and we’ve been able to prove that out. We’re very certain that we can scale a business in these complex, high-value projects. Our work ahead of us here is to master the fulfillment and logistics around actually completing these projects. They are more complex, and because of that, there’s more work to be done to scale in every market across the 400 markets we serve nationwide. Those will continue to be our focus for the remainder of the year, to scale and grow those project types that we launched last year, but also master fulfillment for all of these new higher-value project types we’ve launched this year. If you think about the values we’re talking about, I think the initial set of categories we launched had a TAM of something like $5 billion, while the next set is in the $25 billion plus range. So we’re unlocking a tremendous amount of additional potential GMV by expanding to these new categories and getting the fulfillment right is both important from a financial performance standpoint, but also understandably vital in terms of satisfying customers who are willing to make those purchases.

Great. Thanks.

We’ll take our next question from Cory Carpenter with JPMorgan.

Great. Thanks for the questions. Brandon, I was hoping you could provide some more color on the performance across different categories and geographies in the quarter in April. And then maybe a follow-up to the marketing question, just how you think about the right level of spend as the business starts to recover? Thank you.

Yes. That’s a great question. In mid-March, and I said this before, the day they canceled the NBA season or suspended the season, the next day, sort of the bottom fell out nationwide in effectively every market and every category. I think people were just in shock. That lasted a couple of weeks, and then we began to see a very aggressive, essentially V-shaped recovery, even as lockdowns spread across the country, which I think is interesting. As you would anticipate, there’s a big difference between projects that happen indoors and projects that happen outside, as well as between mandatory projects and discretionary ones. I would say that the biggest impact is in indoor discretionary projects—things like cleaning services or remodeling. Everything else, whether it’s a non-discretionary service that’s indoors or any type of outdoor project, we’ve seen a very strong recovery. All of these are recovering quite well, but certainly, indoor discretionary projects continue to see hesitance among consumers to take on. If there’s an area where we continue to see some drag, it’s there. We’re seeing a couple of things that are really interesting. First, we’ve observed, in terms of the mix of customers coming to our site, a significant shift toward new customers we’ve never served before. We’ve served over 20 years a great deal of households, but we’re seeing more new customer percentage than we have of late. I think it’s really interesting because it suggests perhaps an acceleration in the shift from offline to online. People are as you know and are experiencing staying at home and have fewer alternatives for their time and money. If you’re like me, you have a list of home projects that suddenly became top priority. How long that secular trend lasts? I don’t think any of us know; there’s a lot of uncertainty in that. But for the moment, the home is top of mind, and people are spending time there. There’s more wear and tear, and more desire to improve. As for opportunities to differentiate and lean into that offline to online transition, we believe our marketplaces have always offered an advantage over traditional word-of-mouth referrals, and the way people used to do things, but changing behavior is hard. In a world of social distancing, we believe our platforms offer substantial value to help people get work done safely, securely, and with confidence. We’re quickly introducing new features. We’ve introduced contactless payments, video calling, and the ability for providers to indicate what precautions they take when they come into your house, and so on. We have more to come. We think we can deliver value to homeowners and SPs to help both feel comfortable getting those indoor projects done. That’s a big focus for us for the rest of the year. In terms of channel ROI, this is straightforward—we always manage with a margin requirement in every channel from an ROI standpoint. Current conditions make it easy to lean in. One area where we have held back is TV, but TV rates at least for the moment are extremely favorable. You'll see us lean in there over the balance of Q2 and hopefully the rest of the year if that holds. Otherwise, we always manage based on an ROI target grounded in margin requirements and continue to do so.

Thank you.

Our next question comes from Kunal Madhukar with Deutsche Bank.

Hi. Thanks for taking the question. A bigger picture question. In terms of looking at the portfolio that you have—sorry, looking at the bigger portfolio you have and how you intend to manage it for the long term, how should investors kind of look at milestones that you set? How do we measure you against those milestones? Just trying to understand the portfolio strategy going forward and how one should evaluate things on a time-to-time basis? Thanks.

Thanks, Kunal. It's a great question. We still have to look at IAC or we still look at IAC in pieces, not in the sort of one aggregate revenue or one aggregate earnings. I think that will remain true post-separation from Match. We really do have to answer that question then in pieces. Take ANGI Homeservices, which we believe is in the very earliest stages of its market penetration in a large market. The things we are doing in product right now look like they have the potential to unlock more of that market and bring changed consumer behavior such that it becomes much more natural for consumers and service professionals to transact online to get jobs done. That is what we're looking for in ANGI Homeservices—of course, that comes through increased demand, increased supply, and ultimately increased revenue in that business. But that’s what we're looking for in that business. And we would be disappointed if we can’t build the business multiples bigger than it is right now, by executing against some of the things in our product pipeline. Vimeo is a similar story; I believe everybody needs Vimeo and we'll look at subscribers and growth bookings, ultimately with both driving revenue as the business drivers. Again, if it’s not multiples bigger than it is right now, I believe in Vimeo we’re on a good trajectory. We need to continue that trajectory, continue to innovate in product to make these tools easier for small businesses to use, and facilitate self-enrollment. The current trajectory has to continue with product innovation. If that's true, you could see a business multiples bigger than it is today. Dotdash is a story where both the publisher and aggregate have done well by focusing on the right things—the right content for consumers, the most digestible, freshest content, and the fewest ads. They’ve done a wonderful job on that. But looking at Dotdash, we can also see each component separately— healthcare, finance with Investopedia and The Balance, home, each of which can be multiples bigger than where we are now. Care.com would be another big growth engine; it’s already in there, and while it has about 30 times more market share than its next competitor, it is still a tiny fraction of the market currently handled. It’s much more convenient to book a reliable high-quality caregiver with one click, rather than multiple interactions. That’s what we put in place at ServiceMagic long ago leading to the business we have today. We think this potential exists at Care; it’s a very large growth engine that is really exciting. The last piece outside of those businesses is cash—we’ll have a large pile pro forma for the Match separation. Depending on what happens with this equity sale, we’ll have a substantial pile as well. In markets that seem challenged, we’ve historically been able to put cash to good use. That’s certainly a goal for us during this period, and we should be justly judged on how we do with that cash.

Thanks, Joey.

Next question, please. We’ll take our next question from Jason Helfstein with Oppenheimer.

Thanks. Two questions. One, I just want to dig a little more into ANGI and then I’ll follow up on Care. So, down 2% in April is very impressive, given COVID has scared people from having professionals in their house. I want to focus on the extent that a third of your GMV is coming from discretionary projects, and I imagine people are delaying that. What does that mean for the other two-thirds we’ll call necessary projects? Did that actually grow? If you could, kind of, cohort those two and how you’re thinking about that? And then the second question: how does Care.com avoid liability during COVID? Thanks.

Yes. Thanks, Jason, for the question. Two-thirds are non-discretionary as we've always said, but a big chunk of the discretionary is also outside. People seem comfortable getting outdoor work done. When you boil that down, we entered April at a major deficit, but exited with some strength. Overall, as Joey mentioned earlier, there’s a lot of uncertainty regarding the nature of that strength; you could postulate that it’s delayed demand or pent-up demand from the shock of late March. On the contrary, it could signal a secular boom in home services—given increased time at home. The work that needs to happen is top of mind for homeowners who spend time there. The future is uncertain; we feel confident that we're in a strong financial position, and the financial performance in April is good, given the situation. We think we can make a difference in our current world, at least in the near and medium term, between moving off-line to online and creating features that make a material convenience difference.

Our resilience, Jason, isn’t just discretionary/non-discretionary. We’re in 500 different categories and 400 different markets. We saw a bigger hit in the eye of the storm areas: Pacific Northwest, Northeast, and the northern Midwest. In areas of the country with reduced demand, service providers need us more, and we see that now. As Brandon highlighted, ROI for service providers on our platform is significant, returning 25-30x their dollar spent. Furthermore, our business has a low fixed cost base; variable costs comprise 70-80% of total, allowing us to adjust our expense base if required. However, given our current financial conditions, we would not be adjusting our costs this year.

On Care.com, there’s evolving liability regarding COVID. It’s a regulatory and policy question that is hard to predict. What I can say is one benefit of using our platform is that interactions are limited; you can find someone reliable, and your field of exposure is effectively one-to-one. When systems eventually allow verification around safety—antibody testing and testing for COVID—we'll avail ourselves of those tools. Until then, there’s the inherent reduced exposure from limited interactions. There will be a level of responsibility for decision-making regarding exposure comfort levels. That’s going to be informed by the regulatory environment and government recommendations. Next question?

Thank you. We’ll take our next question from Dan Salmon with BMO Capital Markets.

Thank you. Good morning, everyone. Maybe first for Joey and maybe both Glenn and Brandon as well. Yesterday Shar talked about more use of video tools, increasing female engagement, and that seems like an opportunity for specific product development for Match due to COVID. You’ve both mentioned accelerated shifts in behavioral change. Can you point to areas where you see product opportunities for ANGI or across the IAC businesses? Joey, Vimeo seems obvious; any others would be great to hear.

Sure, Brandon, why don’t you go first on ANGI and video? Then I will address the IAC part and the business.

Two examples we’re excited about: first, we introduced contactless payments this last quarter. This means that any project submitted across the HomeAdvisor marketplace, not just fixed price, can now be paid for—from the consumer to the service provider—through the HomeAdvisor app. This offers convenience that is attractive, especially now, during social distancing. If we can close the loop on a significant number of projects completed in our marketplace, remember our GMV for the entire marketplace is over $10 billion. If we can close transactions successfully, it opens opportunities for different business models and deeper engagement, resulting in longer lifetime value. We couldn’t be more excited about this feature. We also introduced video calling, enabling consumers and service providers to talk via video through our app. Consumers appreciate this for social distancing, and for service providers, it saves trip expenses and time—enabling them to run their business more efficiently. The features were always available; the needs exist. Still, people need a motivator to change behaviors—and the current situation is ensuring that. As they adopt digital features, their behaviors won’t flip back when the situation resolves itself.

I agree with that and can also see it in Vimeo; we’ve seen increases in video tools usage for kid’s channels—15 times increase in sign-ups in kids’ channels. We don’t monetize that, but the channels are reaching audiences. There’s also the increased demand for trainers, gym owners, which have seen a five times increase in demand. That’s a potential opportunity for Vimeo. It shows that across businesses touched by Vimeo, where we can see consumer behavior shifting, it allows our platform to grow steadily. Dotdash uses video as well, but it’s not a fundamental change like a shift from text or pictures to video, rather a supplement.

Regarding the $1.5 billion, I like your choice of words, activate the option. We filed the S-3 to register the $1.5 billion shares we may sell. Those shares will become Match common stock upon separation. People may have been confused as those shares were called Class M, due to transaction mechanics. Those shares won’t be delivered until closing. This filing provides the option, not the obligation, to sell those shares based on market conditions. That sale won't happen until the transaction closes, expected shortly after the shareholder vote on June 25, but we can enter into transactions and agreements to sell shares with potential buyers before closing.

And Dan, I thought of one more minor but fun example. In Bluecrew, where we match employers with employees in light industrial temp labor, we’re able to facilitate employee onboarding through video interviews. Similarly in Care.com, hiring people over video also contributes to the convenience. It makes things safer for both parties, and helps in increasing conversions, allowing families to meet caregivers or employers to meet workers over video and improving optimization over time.

Thank you, everyone.

All right. Next question, operator, please?

Next question comes from Eric Sheridan with UBS.

Thanks so much for taking the question. I want to know, could we double back first to your comments on Dotdash, and the level of success you're seeing in direct response and e-commerce? I wanted to get a little more granularity on what you were seeing and what that might mean in terms of how you align that engagement and monetization inside that part of the company for the long term? And then I know we’re not giving guidance for the full year, but there are a couple of moving pieces this year that we just want to clarify—spin costs, the Care.com acquisition costs, and the endowment piece that you’ve called out before, just to ensure we’re clear on those individual pieces as you look through fiscal year? Thanks everyone.

I'll let Glenn handle the second part. In terms of the Dotdash performance marketing piece, first, there are hundreds of advertisers using those tools on our platform and it’s starting to scale nicely, diversifying nicely. The key is actionable content. For example, learning about brokerage accounts—what they are, how they work, what to do with them. Similarly, once you have that content, we build tools into our platform that help users find the best options based on their specific account needs and project intentions. We provide impartial, fastest information, letting consumers make informed choices. So long as we produce valuable impartial content, consumer intent drives engagement and monetization.

In business separation and acquisition contexts, Care.com’s costs were approximately $40 million, with half being deferred revenue. You saw $13 million of that in the first quarter; we expect a similar amount in the second quarter. The remainder will be split roughly evenly across the third and fourth quarters, heavily weighted toward the third. For spin costs, we estimate around $20 million, with $8 million already accounted for in Q1. The rest will follow suit in the second. The Care costs will be recorded in the Emerging & Other line, while the remainder will be in the corporate line. As for the endowment for the IAC Fellows, that will cost $25 million and also hit the corporate line in Q2.

All right. Next question?

The next question comes from Ross Sandler with Barclays.

Hey, guys. Barry was on TV a couple of weeks ago and mentioned that you’re looking at large deals. Given how the environment for private company financing has changed over the last six months, how are you thinking about large vs. small deal sizes versus buybacks? What companies do you think you’re most interested in? Is it still two-sided marketplaces? And then, second question on spin mechanics: you guys mentioned that the vote should be completed on June 25, and then we go when-issued. Will new shares be trading by the end of the second quarter before June 30? Any clarity on what happens after June 25 would be great. Thanks a lot.

Sure. On deal size, Ross, we’re exploring everything, from small to large, including buybacks. One change is that some big deals could get smaller recently and that may create opportunities. I don’t think there’s a fundamental shift in our capital deployment approach; we haven’t historically been willing to bet the company and won’t do so going forward. However, there may be opportunities to evaluate larger companies if they emerge due to dislocation in the current market.

Regarding the mechanics: as you stated, the shareholder vote is set for the 25th. We expect both securities to conclude by the quarter's end—around June 30. After that, the two stocks will trade separately. The process is complex, but think of it simply. An IAC shareholder who holds one share of IAC will own that same share in July, alongside additional shares of Match based on stock prices. Should we exercise the option to sell the $1.5 billion, the number of Match shares will adjust accordingly. However, everything will depend on stock prices before transactions. I encourage you to look back at the deck we presented in December, which effectively demystified the complicated transaction mechanics.

Thank you.

Next question.

We’ll take our next question from Nick Jones with Citi.

Okay, thank you for taking my question. On Care.com in the shareholder letter, you discussed the opportunity—rapid bookings, video interviews, improved matching. Could you expand on the opportunity and what today’s use case is? It seems like long-term care today, but what does the future use case look like?

Long-term care will remain a focus for Care forever. However, we’re also targeting the 78 million babysitting and short-term child care jobs. That opportunity not only serves as a new revenue source, but also promotes user frequency. If this platform allows for easy access every week for families in need of care, they’ll also turn to us for long-term care solutions. This represents a significant growth opportunity; most families need care at some point, particularly those needing care frequently throughout the year. Current circumstances, such as schools and daycare centers being closed, shift many of the traditional dynamics, presenting us with moments to satisfy increased consumer demand now. Thank you, everyone.

And that does conclude today’s conference. We thank you for your participation. You may now disconnect.