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 and Angi Inc’s first 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. Please also refer 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.

Good morning. I am Chris Halpin, CFO of Interactive Corp., and I'd like to welcome you to our first quarter earnings call. I'm joined here today by Joey Levin, CEO of IAC; by Oisin Hanrahan, CEO of Angi; and Neil Vogel, CEO of Dotdash Meredith. With that, I will turn it over to Joey.

Good morning, everybody. Thank you for joining us in what is a very turbulent broader environment. There's a lot of talk right now around forces outside our control like inflation and foreign exchange and the very volatile markets. I want to focus today on forces that are inside our control. The two biggest things impacting IAC that are inside our control are Dotdash Meredith, which is led by Neil Vogel, and Angi, led by Oisin. You will hear from both of them today. I think what you'll hear from both of them is a tremendous amount of confidence in where we are going in our business, and both are at pivotal growth points. Dotdash Meredith is still new having completed the acquisition only recently and is deep in the midst of the integration, so there's a lot to report on that front. At Angi, we are coming off of a 15-month period where we really took on every project we could in terms of changes to grow the business. We have a lot to show for that and we'll talk about it over the course of the call. The last piece which is relevant in this environment is what we're going to do at IAC with our cash and equity position. We talked about that a little in the letter. We view this as a tremendous opportunity for us, and we've been waiting for opportunities like this for many years now. Hopefully, we'll be wise enough to take advantage of it while it lasts. So let's go to questions.

Our first question is from Ross Sandler at Barclays.

Hey, guys. Good morning, everybody. Neil, I just wanted to start with your comments on Meredith and dig a little deeper. You mentioned in the letter that health.com is going through its overhaul. It was a statement about revenue getting back to normal after just one week. That's a lot faster than the timeline that you guys have explained with your legacy Dotdash vertical sites when you did those overhauls. So can you just elaborate a little bit more on what's going on with that? And what's making the revenue recovery much quicker at the Meredith properties? And the second question is just for Joey, kind of high level on what you just ended with, but it seems like you'll have pick up the litter as far as private consumer Internet companies to choose from in the coming quarters. I guess just, can you bring us under the hood and what are the internal groups at IAC getting ready for right now? Which marketplace categories look the most attractive or are you most focused on, or does it just come down to the valuations that you think might present themselves? That's it, guys.

I'll be first. To answer your question regarding health.com, typically when we say we migrate something, it means we take something and we put it on our tech stack and ad stack. As you know, and we've talked about many times, we boast significantly faster sites, significantly fewer assets, and significantly better content. When we make this migration, we pretty much solve the first two problems to make the sites faster with ads that are more performant. I think we said in the letter, the site is about five times faster, and there are about 30% fewer ads with a better type of ad. Typically what has happened in the past is that it takes some time for the markets to realize that the site is better, that there are fewer ads, and that these ads perform better. A few stats I'll give you today, the click-through rate on the ads on health.com are up 60% since we did the migration, and ad rates in the programmatic market are up 50%. What we've seen is that the combination of fewer ads, higher prices, and faster sites has gotten us to a place where we're willing to sacrifice some revenue to make these changes. We have caught up in about a week, which is materially faster than what we've done on our other brands in the past. The two real reasons why this works are because Health.com is a really strong brand and domain on the web, and we believe that the markets have been much more responsive because of the brand strength. We're pretty excited about this. Again, this is just the starting point, but we feel very good about our thesis for buying Meredith.

In terms of opportunities for IAC and where we're prioritizing our capital, I actually don't think there will be opportunities in the private markets first. We have a list of public companies that we look at that we think are compelling products in big markets with great brands that we find interesting, and we'll keep looking at those. Generally, I think there are more opportunities in the public markets. Private markets, as you know, don't necessarily have to embrace the current market reality unless a business runs out of capital. But one thing many of these companies did over the last couple of years, which was smart, was ensure they had enough cash so they don't have to confront the market we're in right now. There could be private opportunities, there could be public opportunities, but we generally see more opportunities in the public market. In terms of prioritizing capital, I'm not going to talk about specific companies or categories, but we generally know how to evaluate and operate those businesses. When we talk about capital allocation, we always consider our existing businesses and new businesses. For our two biggest existing businesses, Dotdash Meredith and Angi, there's a lot happening right now. We're currently integrating Dotdash Meredith, and that is not likely to be a big use of acquisition currency. We also have major transformations happening at Angi. Throughout all of this, we'll do smaller acquisitions throughout the smaller businesses, but we are currently focused on new opportunities and also evaluating against share repurchases.

Great. Our next question will be from John Blackledge at Cowen.

Great. Thanks. Two questions. One for Joey. Joey, I thought the tone from the beginning of the shareholder letter for both Dotdash Meredith and Angi seemed pretty bullish regarding profitability going forward. How confident are you in ramping profits in the two segments through the rest of the year? And should we think about $450 million in EBITDA at Dotdash Meredith for 2023 as a target that you guys still believe in? And then secondly, regarding IAC's buyback authorization, given where the stocks are trading right now, how should we think about share repurchase for either IAC and/or Angi through the rest of the year? Thank you.

Sure. On profitability, we feel very confident in everything that we said. That doesn't mean we are rushing profits at Angi right now. But it does mean that we are improving and have passed peak investment. We feel good about the adjusted EBITDA we believe we can deliver this year for Dotdash Meredith, as well as for the $450 million target. The progress we've made in the few months since we acquired it gives us a lot of confidence in our projections. There is price and volume, and we've made progress on price, evidenced by early traffic performance. However, traffic is somewhat outside of our control because a lot of that traffic comes from third parties. Our early evidence suggests we are creating great content which should lead to increased traffic. As for share repurchases, we always consider share repurchases. It’s something we evaluate throughout every market. I think IAC's market cap was around $6 billion, and we have about $3.5 billion of public securities between Angi and MGM. That leaves us with about $2.5 billion or $3 billion for Dotdash Meredith, Care, Turo, and everything else that generates cash. That is a compelling equation, especially considering the solid EBITDA generation we expect from our businesses.

With respect to Dotdash Meredith profit scaling, the first quarter was tough due to COVID factors last year and demand shifts. But we see promising growth in digital revenue. The completion of the Health.com integration is a major factor for positive performance moving forward. Our expectation is for significant EBITDA growth as we scale up. The digital business has a high margin compared to traditional models, and our sales forces are performing well. Overall, we expect growth for EBITDA above $300 million this year.

Our next question will be from Cory Carpenter at JPMorgan.

Thanks for the question. Oisin, could you recap how the quarter went versus your expectations? Looking forward, is there any change in how you think about growth opportunities for the rest of the year? And Chris, I have two questions for you. As Angi moves past peak investment, is this happening naturally or is this a proactive decision to pull back spending? Any thoughts on the April comparisons? Thanks.

Thanks, Cory. In terms of performance in Q1, we started with a tough situation with Omicron and faced challenges with last year's consumer demand, driven by stimulus checks. However, we are very pleased to be coming out of Q1 with a strong position in April. The overall ads and leads business improves from here, and in services, we've hit peak investment by design. From here, we foresee significant gross profit dollar increases coming from services, aiding overall business profitability. The ads and leads business will benefit from reduced consumer demand as we see an uptick in engagement from service professionals on our platform.

Building on Oisin's point, we anticipated peak investment would occur in March. As the service revenue naturally increases seasonally over the year, we will reverse EBITDA losses. We'll also strive to provide more insights on gross profit at our service business and how it rolls through. In April metrics, we anticipate a smoother comparable than March and maintain a flat guidance for Dotdash. However, Angi's stability in ads and leads suggests we are moving past March's tough comparison and signals the growth will continue through the year.

Our next question is from Justin Patterson at KeyBanc.

Thank you very much. Two questions if I can. Neil, as you executed on the integration and engaged with advertisers, how has the tone of your conversations changed? How should we think about building up sales force productivity in the back half of the year? For Oisin, do you believe rising interest rates could impact your business? Could it become a tailwind as consumers deal with affordability issues and start doing more home projects? Thank you.

I'll take the first one. On the sales side, we talked about the integration of the teams which is largely complete. The word I would choose to describe it is excitement. There's excitement internally and from advertisers, as we can now provide intent-based targeting and contextual targeting at a scale that never been done before. We've seen significant commitment from agencies and clients. We're focusing on performance which makes clients confident in partnership. We feel exceptionally good about where we are now, and while it's hard work, we are on the right path.

In terms of interest rates and the macro environment, normalization of consumer demand will provide a positive relationship between supply and demand for our ads and leads business. As consumer demand settles, we anticipate more engagement from service professionals leading to a more relevant ads and leads business. Higher sales force productivity supports this, and we feel optimistic about our positioning in the current macroeconomic environment.

Our next question is from Jason Helfstein at Oppenheimer.

Thanks. Joey, you highlighted a pressing investment in MGM, I thought it would be worth exploring that further. Given depressed values within online sports betting, how do you envision investments in gaming area outside of MGM? Or do you specifically make the investments through MGM? Thanks.

Both inside and outside MGM are interesting for us. Since our involvement, the online gaming business has grown significantly and is expected to continue that growth trajectory. While the hard part is the margins due to competition, we've learned that iGaming is currently a better business than sports betting. MGM's recent acquisition of a global gaming company showcases our ongoing strategy. We maintain an open dialogue with MGM and will consider opportunities within and outside MGM when they align well with our business strategies.

Our next question is from Brian Fitzgerald at Wells Fargo.

Thanks, guys. Two follow-ups. On Dotdash Meredith’s recovery speed and health.com trajectory, what are the drivers by which advertisers pick up on the benefits of reduced clutter? Does this come through in conversions, brand-lift studies, or is it partly a matter of sales force communications? Second, on Angi, the zero-match service request rate has been declining over the past few quarters. Any thoughts on where you think that zero-match rate can go? Do you expect SEM and SEO benefits from that closure?

On how clients see this, it unfolds in phases. The moment changes are made, we signal very different indicators in programmatic marketplaces. In the case of Health.com, we've seen improvement within a week, indicating strong market response. Some signals reflect client experience through premium deals, which takes longer to manifest in brand studies. Our sales team focuses on improving client education concerning ad performance compared to others. We're making solid progress.

On Angi's zero-match rate and related implications for SEM and SEO, you're correct. We now have a very rich product portfolio among ads, leads, and services. This makes Angi more attractive for SEO and reflects strong year-over-year growth. Our SEO performance is driven by our diversified offerings, and the stronger these offerings are, the better our SEM capabilities are as we can predict which categories to bid on. This leads us towards fewer under-monetized service requests, allowing our algorithm to optimize bidding more effectively.

Our next question is from Eric Sheridan at Goldman Sachs.

Thanks so much for taking the question. If I could just take a step back and think about capital allocation within the firm, considering potential growth opportunities in Dotdash Meredith and Angi, are you accelerating any efforts over the medium to long term, or is it purely down to execution? Also, can we extend this discussion to Care and how you see operations versus applying capital in these areas?

We want to invest in every business, except for search, where we've focused on profit maximization instead of growth. The approach balances short and long term where we reinvest profits for growth. Recent efforts in Angi show we've invested significantly in long-term growth but are now shifting towards a more balanced approach. We're not focused solely on profit maximization, especially in our existing profitable businesses, while still focusing on developing emerging ones.

Every dollar spent on capital can contribute to growth initiatives or incremental margin. The high interest environment with increased discount rates makes capital allocation assessments more important. The strong balance sheet gives us a competitive advantage, and optimizing our portfolio in line with current market trends will enhance shareholder value. Care demonstrates growth potential, and the operations are building a strong foundation for its future.

Our next question will be from Tom Champion at Piper Sandler.

Oisin, could you discuss the monthly metrics regarding service requests down double digits? What drives this and how does it tie into ads and leads revenue stabilization? Chris, you referred to newer opportunities in Care. Could you flesh those out a bit?

In terms of the service requests being down, there are two main drivers. The first is difficult comparables from last year, where service requests were at all-time highs due to lockdowns. The second driver is the Angi rebrand and the shift from Angie's List to Angi. We are now in strong recovery at Angi and back to strong growth, but reducing marketing efforts on the legacy platform led to decreased requests. Despite this, we're achieving higher monetization and successful matches on the service requests we have. Thus, while we have fewer requests overall, we're more efficient in fulfilling them.

On Care, we have seen significant inbound demand for services we can't currently meet. Areas such as out-of-home daycare and senior care are examples where we can't yet satisfy these requests. We are working on adding provider supply to meet this demand. Additionally, we're excited about Instant Book, which will expedite matching service requests. This product is currently in beta, and we are keen to ensure liquidity on both sides of the marketplace to enable faster turnaround times.

Our next question will be from Ygal Arounian at Wedbush.

Good morning, guys. Starting with the commentary on peak investment in services and plans to expand into new categories. Where are you with these plans, and how do they align with your strategy? For Joey, you mentioned Bluecrew and Vivian in your letter. Those seem to be strong areas of business, can you elaborate on them?

We have seen consistent year-over-year growth in services, and we expect that to accelerate further this year, especially with larger projects such as roofing on the rise. As we analyze which categories to invest in, we focus on positive growth rates, optimizing the product flow, and ensuring we are investing where we see strong potential and margin growth. While we are past peak investment in March, we will remain vigilant and responsive to opportunities.

The expansion into new categories remains important for services. However, we are identifying job types and categories with the strongest margins and momentum to focus our investments. Balancing our current offerings with areas we see growth potential is crucial.

Regarding Bluecrew and Vivian, these represent different business models centered on matching employees with employers. Particularly, Vivian targets healthcare staffing, while Bluecrew utilizes an agency model by employing workers. Both make use of dynamic engagement rather than static job listings. We believe the identification of job qualifications and establishing a more efficient hiring process will foster significant growth in both sectors, while enabling flexibility for employees and employers alike.

Our next question will be from Brent Thill at Jefferies.

Given macro headwinds, how do you think the rest of the portfolio will fare, and what elements add defensiveness in a tough macro environment?

Each business may require a tailored assessment in terms of macro influences. For Dotdash Meredith, the last dollars to get cut in a challenging economic environment are typically from good performance ads. Given that our ads perform well, we think we are well protected. On the Angi side, there’s a natural hedge; if consumer demand decreases, interest from service professionals increases. Given that many jobs are nondiscretionary in nature, we retain some level of protection. Care is an emerging business in this sense, and while we did fine during the pandemic, we still need to observe how it behaves in a more conventional market.

Our next question is from Brad Erickson at RBC.

Thanks. A couple of follow-ups on ads and leads within Angi. Could you clarify if you’re currently over-earning or under-earning, and how aggressively would you pursue marketing spend on angi.com once traffic recovers? Regarding roofing, can we say that historical expansion patterns will continue, or are you reducing exploration in that area?

In terms of demand for ads and leads, we still have more consumer demand than Pro supply across many categories. Although we are not yet back to legacy peak spending levels for broad media, we'll adapt and lean in where it makes sense as traffic grows. We are happy with the roofing investments allowing us to accelerate in that space. As for M&A, we're becoming more judicious in our decisions but will remain open to opportunities where appropriate.

Mark Schneider: Thank you all for joining us this morning, and I look forward to discussing more.

Thank you.

Thanks.